Recently, the goals and priorities of the corporate restructuring have noticeably shifted from the possibility of obtaining additional tax benefits toward protecting the interests of owners and investors, told reporters Vasil Kisil & Partners' Senior Associate Ivan Yurchenko during a press breakfast that took place on March 20, 2012 in firm's headquarters.

"Unfortunately, Ukrainian legislation does not provide for a civilized way to structure the relationship between the investors, or to effectively protect the rights of shareholders. Limitations of the Ukrainian legislation that applies to the conclusion of shareholder agreements make Ukrainian businesses interested in attracting foreign investment, or in selling the business, seek solutions to such problems outside the country. Another big reason that drives shareholders and investors to undertake a restructuring is to ensure the confidentiality of ownership and the option to protect their rights in fair trial ", - said Ivan.

Mr Yurchenko emphasised that a restructuring is a complex procedure that requires careful analysis, expertise and experience. An unprofessionally carried out restructuring, including the implementation of artificial structures, may be challenged by state regulatory agencies, which would threaten the continuing viability of the business.

According to Ivan, when undertaking a restructuring, serious attention should be paid to the choice of jurisdiction, namely, one should examine its corporate and tax law to assess the level of protection of property rights and the tax burden. It is important not to err in the choice of the foreign secretary of the company, since more often than not it will hold a formal right of ownership and management of the restructured business.

Ownership of land and special permits, special tax regimes and the presence of minority shareholders may require the implementation of special structures and should be subject to a separate analysis.

Mr Yurchenko also emphasized the significance of the communication component in the restructuring project since obviously these on-going processes will attract attention, at least that of the hired management and employees, government and tax authorities.

In conclusion of the press breakfast, Ivan noted that corporate restructuring may be an appropriate step for medium-sized companies as well, if the value of their assets / turnover reaches several million U.S. dollars. In addition to protecting property rights, corporate restructuring will make external financing more accessible and will facilitate entry into new markets.

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Tel.: +380 44 581 7777

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About the Firm

Established in 1992, Vasil Kisil & Partners is a Ukrainian law firm that delivers integrated legal advice in banking & finance, mergers & acquisitions, capital markets, antitrust, competition and trade, dispute resolution, tax law, energy and natural resources law, intellectual property law, labor and employment law, real estate and construction law, as well as PPP, concessions and infrastructure law.

The firm`s clients include such world-known companies as Alpcot Agro, Africa-Israel Group, Astellas Pharma, BASF, Bayer Consumer, BNP Paribas, British American Tobacco, Central European Media Enterprises, Coca Cola, Credit Agricole Group, Danone, Dell Inc., Du Pont, Energy Standard Group, Eurosport, Google, IKB Deutsche Industriebank, LG Electronics, Leroy Merlin Ukraine, Lukoil, Metso Automation Oy, Moody’s, Mott MacDonald Limited, NCH Capital, Novacke chemicke zavody, Opel, Philips, Pioneer, Red Bull, Russian Standard Bank, St. Sophia Homes, SEB AB, SEB Group, Swedbank AB, Seven Hills, Shell, Standard Charted Bank, Tchibo, UniCredit Group, Vanco International / Vanco Energy, Volkswagen, VympelCom, YouTube.