A multinational group comprising various entities with distinct shareholders from multiple countries such as India, UAE, US, UK, Singapore, lacked a designated ultimate holding company. A potential venture capitalist was willing to invest in the multinational group, subject to specific conditions. One such condition stipulates that the multinational group must form an ultimate parent holding, rather than having individual shareholders. Further, all the non-compliances in the Indian entity should be regularised prior to funding. Timelines for regularisation appeared to stretch beyond a year.
The Indian company sought our expertise to establish a new entity in a suitable jurisdiction that would serve as the overarching holding company for the entire group. Further, consolidate all the entities under this holding company in a tax efficient and regulatory compliant mechanism.
Key Challenges:
- Consolidation of group companies at holding level: Evaluating the regulations in all countries within the multinational group to streamline the group companies at the holding level, aiming for both cost-effectiveness and tax efficiency.
- Consolidation Mechanics: The client was seeking information on potential consolidation options in each country, considering tax implications, and was looking for guidance to identify the most advantageous choice.
- Significant Non-compliance: The Indian entity faced the burden of non-compliance with statutory obligations and essential filings under regulations such as FEMA, Companies Act, 2013, and Labour Law.
- Effective cost: Preforming a Cash flow analysis to ascertain the effective cost of creating a holding company for the multinational group.
We conducted an analysis to determine the most tax-efficient method and assess the tax implications in different jurisdictions they were carrying out their business in. This encompassed the forming of the holding company and the seamless integration of other entities within the ideal group structure.
