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Corporate & Commercial Corporate & Commercial

Mergers & Acquisitions

Although our assistance in this space is more typically in relation to Gibraltar subsidiaries within Groups being merged or acquired, Gibraltar’s domestic regime (against the backdrop of our jurisdiction’s right touch regulation approach) affords substantial flexibility in the pursuance of M&A work, allowing for innovative and practical solutions that can often be tailor-made to the requirements of a particular deal. In addition, we have seen clients avail themselves of the ease of re-domiciliation into and out of Gibraltar as a bridge between the traditionally considered onshore and offshore worlds, as well as a method allowing for subsequent merger whether into or out of Gibraltar,

Typically, M&A matters involve varying levels of legal and tax due diligence (which are inevitably fact-dependent) and we are very well-versed in handling this correspondingly depending on the intricacies, risks and interests involved. Another common feature is the need for deft navigation of our unlawful financial assistance provisions (given their breadth of application, and which can arise in circumstances where shares in a Gibraltar entity are being purchased) and in which we are also highly experienced, having addressed and worked through these in a myriad of different scenarios and guises – we also have access to and are able to coordinate assistance by independent accountants, whom are needed to issue a form of report as part of the requisite ‘whitewashing’ of financial assistance that would be otherwise unlawful.

With the continuing growth and market prominence of our gaming, insurance (and, more recently, fintech and funds) industries, which are primarily UK facing and continuing to flourish in the post-Brexit world given continuing direct market access to the UK (including in relation to UK financial services) and bolstered by a UK/Gibraltar double-tax treaty, Gibraltar is well positioned as a robust, compliant yet dynamic jurisdiction with a keen appreciation (including politically) to the ever-increasing need for corporations to have real substance, but with no formal substance rules presently required (which can offer greater latitude in the manner in which substance is established, rather than simply becoming a ‘form over substance’ exercise).

By way of very general overview, Gibraltar’s key attractions include a primarily territorial tax system (save for with respect to net intercompany interest income exceeding £100,000 per annum or royalty income), a low headline tax rate of 12.5% (with a potentially effective tax rate of nil), no capital gains tax, a legal system based on common law, double tax treaties with the UK and Spain (with more in the pipeline), a well-established trust and foundations offering, and a fully EU law compliant and well-regulated jurisdiction.

Notable examples of our work in this area include:

  • a cross-border merger into Gibraltar (pursued under the EU cross-border mergers Directive) of a Cypriot and a Gibraltar subsidiary of a subsea engineering, construction and services company serving the offshore energy industry.
  • an intra-group Gibraltar court-sanctioned scheme of arrangement allowing for the merger of two Gibraltar entities by the parent’s absorption of its subsidiary without its liquidation, such as to avoid (by way of deferral and transference to the resulting merged entity) the crystallising of a pure accounting loss in a manner acceptable under international accounting standards.
  • providing extensive and technical Gibraltar legal and tax advisory assistance in connection with a business combination of a SPAC with a leading technology and investment group in the digital assets sector.
  • undertaking comprehensive due diligence and affording Gibraltar legal advisory assistance in the acquisition by way of merger of substantial interests in a bitcoin mining group by an information technology company

 

Mergers & Acquisitions Team

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