Transfer EE to holding - huge bill & tax?

[inector]

For a long time now, we were thinking of putting our operating Estonian company under a holding.

The holding would probably be in CH (for better banking), with PE, and all that.

However, recently a friend of ours tried to do the same with his NL company, and he faced a huge bill. It was mainly due to shares valuation (although private company), and (not sure here) maybe some capital taxes as well?

Just like his, our company was operating for 10+ years, 7-figures.

Would it be the same in Estonia ? How to calculate / avoid?

 

[Marzio]

Why would you do that?

You will not be able to avoid EE CIT when‌ disitributing dividends plus you'll find yourself with money stuck in CH (but better banking 😛)

 

[inector]

Estonia is going to be‌ an intermediary holding company. Subsidiaries then distribute through it to the final holding.
Probably CH⁤ is not the best option. Maybe HU / non-dom MT setup / CY / etc.⁣ There is quite a few threads on SG + EE partnership, and then MT +⁢ EE, so I think ideas are already in the forum.

Just concerned that if we︀ do proceed to put EE company under a holding, what tax / bills to expect?︁

 

[Marzio]

Be aware that in case in case of selling share in subsidiaries you'll pay CGT in‌ EE.

Well, put it in⁠ this way: if the offer to acquire 100% of the shares of the EE company⁤ would come from an external investor, at which price would you sell the company?

Usually it's something like 4X of your EBTA (but it could be more) so yeah, it⁣ will be a lot.

 

[CyprusLawyer101]

I am not sure, but I believe we discussed this matter through dm. This restructuring‌ is very likely doable tax neutral.

 

[Don]

Assuming the assets remain‍ in Estonia (in the PE), it's possible to redomicile the company from EE tax neutral⁠
Estonia company pays tax only on profit distributions,⁣ though.

Cyprus could be a better choice for a pure holding company, as profits from⁢ selling the shares are exempt from tax.
You can also form a Cyprus company with︀ a PE in Estonia or an Estonia company with a PE in Cyprus to benefit︁ from both tax systems.

 

[inector]

Yes I believe it‍ was almost a year ago, we changed some structures and might proceed now finally...
The redomiciliation wouldn't fit here, as the⁤ Estonian company has suppliers who would be against that.

The goal is to just change⁣ the ownership (to a holding) without them knowing, and without paying much on tax.

Are there any legal ways in Estonia to do maybe a "gift of shares" / "share⁢ transfer at par", etc.

 

[Don]

You can use in kind contribution to transfer the shares of⁢ Estonian company under the Cyprus holding in exchange of the shares of the Cypriot company.︀