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Dealing with crisis through M&A

14 Oct 2014

The EU membership of Cyprus entailed the implementation of the Merger Directive. The objective of this directive is to remove fiscal obstacles to cross-border reorganisations relating to companies situated in two or more Member States. Taxand Cyprus highlights how mergers and acquisitions can help companies during difficult economic times. 

The objective of companies engaging in mergers and acquisitions is generally to create a more powerful and stable structure of companies. Through proper planning companies can also achieve very favorable results in terms of reduction of risk and tax efficiency. M&A can also be used for expansions into new markets, with new prospects, while internal reorganisations can restructure the internal activities of a business for greater efficiency and significant cost savings. Similar outcomes can also result from a joint venture.

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Taxand's Take

Multinationals and national corporations should consider the new directive if operating in Cyprus to ensure that any planned mergers or acquisitions within the jurisdiction fulfil objectives.

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Chris Damianou

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