There is a strong demand for liquidation services. Due to constantly changes in legislation in many countries (for example, the implementation of controlled foreign companies rules), shareholders and beneficiaries decide to optimize the corporate structure of their international business. Sometimes maintaining companies become non-profitable. When a decision to liquidate a company is made, it is necessary to consider the tax consequences for participants and any controlling persons of the company. In some cases, it is possible to significantly reduce the tax burden when acquiring company assets or to transfer assets of a liquidated foreign company without tax consequences. This is where it becomes useful to have experts who will provide relevant and effective advice on such issues. In each jurisdiction, procedures and deadlines for the liquidation may vary, therefore, at the request of the client, we give detailed information on each country of interest.
Despite these differences, there are two main options for liquidation of a legal entity: compulsory and voluntary.
In the first case, the decision to liquidate is taken by the state body and the company is deleted from the register. At the same time, the owner of the company reserves the right to restore the company within several years. It is important to note that we do not recommend this option, since the owners of the company can later expect unpleasant surprises, such as claims from foreign tax authorities and visa refusals. In addition, if the company has assets, then local authorities can confiscate it. Voluntary liquidation of the company is a decision made by shareholders. The process of liquidation is carried out by the appointed liquidator. The role of the liquidator is extremely important. His duties include determining the assets and liabilities of the company, distributing assets, repaying debts, as well as preparing and submitting all the necessary documents. The liquidation is often essential in tax planning and the optimization of the corporate structure.
Before deciding on liquidation, it is advisable to consult with tax specialists who will review the corporate structure of your international business and provide recommendations.