Company acquisition matters
Company owners enjoy highly business-friendly and favourable possibilities of taxation in Hungary, in comparison with those provided by EU law; accordingly, there is an opportunity to realise significant company transactions yielding considerably higher revenues, compared to other EU member states, once they are properly planned and subjected to comprehensive and prudent legal and financial reviews. Fiduciary asset management may represent an effective and flexible tool also in this process.
In the past few years, the legislator has passed a number of laws that grant favourable terms of taxation in respect of assets entrusted to fiduciary asset management.
Beyond the fact that the transfer into asset management is free of duties and VAT, this legal form may offer an ideal tax environment for the liquidation of high-value real estate or business shares.
In the context of company acquisitions and associated legal situations, contract delivery may not take place with immediate effect, while the deposit applied by the parties as a security against delayed performance cannot be implemented for physical or legal causes. In the event of complicated sale and purchase transactions involving real estate or even undertakings (for instance, office buildings sold inclusive of multiple tenants), or large size properties or assets that may be geographically scattered or in constant motion (e.g., vehicle fleets), the inspection and assessment of assets may take a long time, even months; consequently, the contracting parties may easily be put at a disadvantage in respect of contract delivery.
In such pending legal situations, fiduciary asset management may represent a reassuring solution to both parties, whereby an asset manager that is independent of both parties assumes ownership of the subject matter of the transaction. Subsequently, the fiduciary asset manager will manage the entrusted asset to the best of their knowledge, even with the involvement of experts, if necessary, with an ownership approach and maximum care, as long as required so by the parties’ interest.
Portum Trust Co.’s own law office and years of experience in asset management ensure reassuring professional implementation of acquisition cases, offering optimal solutions in every respect, along with a complete administrative background and maximum discretion.
You may also be interested in this
Fiduciary asset management and taxation
Fiduciary asset management represents one of the ideal legal institutions in the event you wish to ensure that your assets are safe and also rest assured about their taxation – in certain cases, fiduciary asset management may offer fairly favourable tax conditions.
See moreWhat can be involved in fiduciary asset management?
Highly popular in English-speaking countries for long years, the institution of “trust”, i.e. fiduciary asset management was made available by Hungarian law to clients in 2014. Although a growing number of people understand the concept of fiduciary asset management and benefit from the possibilities provided by fiduciary asset management, a lot of topics or issues still arise on our clients’ part, which indicate that they have little information on the subject.
See moreWhat is fiduciary asset management?
Borrowed from the law of English-speaking countries and available since 2014 in Hungary, fiduciary asset management has centuries-old traditions. The idea is to provide an option for the settlor to think through the future of his/her assets consciously, in detail, focusing on their long term future – whether such assets be an undertaking owned by the family for multiple generations, or a holiday cottage, a business share in a particularly prosperous enterprise, or any other moveable or immoveable property or right. (In Hungary, agricultural lands are an exclusive exception from fiduciary asset management.)
See moreAsset protection
Of the many benefits of fiduciary asset management, one of the most important ones is the ability to protect certain assets effectively and over a long period from potential external dangers – such as third persons or business risks.
See moreWhat can be included in a fiduciary asset management contract?
Assignment of a fiduciary asset management company may be necessary in a number of cases. Such a step may be taken when the goal is to avoid cumbersome succession rules or the concomitant, often complicated probate procedures – with special regard to cases where the inheritance is an asset (such as a majority business share or equity stake) where even months spent with a probate procedure may result in serious losses in pecuniary or other values, or where the liquidation of a business owned is being considered, or prior to an upcoming marriage.
See moreThe role of fiduciary asset management in case of company mergers and acquisitions
Liquidation of a business undertaking represents a frequent case. However, when a party changes their mind while the transaction terms are being met or a circumstance arises that prompts them to cancel the transaction, it entails immense risks. If, on top of that, a longer period elapses between the agreement and its implementation, even the moment of ownership title transfer may become questionable, which may in numerous cases result in a situation where it is too late for the seller and too early for the buyer to control the undertaking.
See more