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A Closer Look at Legal Entity Rationalisation

1 May 2012

Given the current economic challenges, many companies are continuing their efforts to control expenses, trim their operating cost base and improve their tax positions. One solution that is gaining corporate attention is legal entity rationalisation (LER). This is a process applied by multinational entities to overhaul the group structure with the use of companies, sub-groups and branches to provide the most efficient structure. Taxand UK examines the LER process being used by multinationals that can lead to cost savings, a simpler legal entity structure and reduced tax risks.

The end result can lead to cost savings, a simpler legal entity structure, reduced risk and more time to pursue value-added business initiatives.

Taxand UK discusses the issue of Legal Entity Rationalisation in greater detail

Taxand's Take

As with all corporate planning, achieving any successful outcome can only come about by identifying the desired benefits, assessing the costs, making the decision and then implementing the new structure. The overall goal should be significant cost savings and an optimised legal entity structure that is more aligned with the business. With a better understanding of what is involved in the LER process, intuitive companies can not only simplify governance and administration structures, but recognise significant financial and tax benefits.

Your Taxand contact for further queries is:
Andrew Gavan
T. +44 207 663 0406

Taxand's Take Author