HOW TO INVEST IN ITALY Company structures and M&A schemes Roberto Luzi Crivellini International Investment forum Shanghai, 21.10. 2013
How to invest in Italy
Jun 23, 2015
a brief presentation of the reasons to invest in Italy, and the ways to do it
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HOW TO INVEST IN ITALYCompany structures and M&A schemes
Roberto Luzi Crivellini
International Investment forum
Shanghai, 21.10. 2013
Company Structures and M&A in Italy
CHINA AND ITALY4000+ BLN EUROS INVESTED IN CHINA INTHE LAST 10 YEARSITALY THIRD EUROPEAN PARTNER: 2000+COMPANIES WITH HQ IN CHINA– 600MANUFACTURING PLANTSIN 2009 CHINA WAS THE ONLY MARKETWHERE ITALIAN EXPORTS HAVE GROWN
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Company Structures and M&A in Italy
Chinese invested companies in Italy
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Company Structures and M&A in Italy
Business model
66 GREENFIELD
67 MERGERS AND ACQUISTIONS
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the right time
strong Yuan / weak Euro
credit crunch: EU enterprises very keen on investors in equity / acquisitions
weak domestic market: key for EU companies is to export overseas, especially to China
The right spot
the right people
Similar business schemes and mentality
Mostly family enterprises
Emotional negotiation + importance of good personal relationship
… but please do not forget the lu shi !
why do I need a MoU ?
Not binding, but fundamental to lay down the milestones of the future co-operation
Will guide the parties in the future negotiation
Can be used for interpretation of future contractual agreements
Step by Step approach
Sale / Distribution /License / Technology transfer
Newco/ Rep Office
Joint Venture Agreements
Acquisitions / Merger
sale / distribution/ license
+network of agents/brokersno upfront costsno deep knowledge of local regulations needed
-distributor controls the marketno direct marketinglow brand awareness
Acquisitions / Merger
Representative office
combined with distribution from China
light structure/low costs
allows networking and client management
no legal personality
Joint Venture
majority = key issue: how to keep and control local management
minority = usually combined with shareholders’ agreements for exclusive purchase/distribution of products from chinese investor (real asset=network)
Good news:
Rather easy and cheap process
Can be done via proxy
Nothing to compare to a WFOE or JV or REP office incorporation in China!
Limited Liabilities Companies
Società a responsabilità limitata (S.r.l.)
Società per Azioni (S.p.A)
© Yingke Law Firm. All rights reserved.Company Structures and M&A in Italy
Company Structures and M&A in Italy
limited liability companies
• minimum capital required (25% upon registration)
• incorporation by notary deed• capital contributions in kind need to
be certified by an external expert• filing of annual balance required
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Company Structures and M&A in Italy
società a responsabilità limitata (s.r.l.)
most suitable solution for newcos
minimum registered capital €10.000,00
very flexible articles of association
strong role of shareholders
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Company Structures and M&A in Italy
società a responsabilità limitata (s.r.l.)
Shareholders’ meeting
Director / Board of directors (can be not resident)
auditor (statutory auditors above € 120.000,00)
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Company Structures and M&A in Italy
società per azioni (s.p.a.)most suitable for bigger projects
can issue bonds, other special debt titles and provide for dedicated funds re. to specific projects
AoA less flexible (shareholders’ agreement available)
minimum registered capital € 120.000,00)
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Company Structures and M&A in Italy
98% of Italian companies are Small – Medium Enterprises
M&A can be a win –win solution, with limited investments
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Company Structures and M&A in Italy
Acquisition of a company
asset purchase
shares purchase
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Company Structures and M&A in Italy
Asset purchase
most favorable for buyer, who can amortize the value of the assets in the balance of his company
less favorable for seller, who pays 27,5% on capital gain
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Company Structures and M&A in Italy
Shares purchase
most favorable for seller, only 5% on capital gain is applied
less favorable for buyer, who can’t amortize the purchase price
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Company Structures and M&A in Italy
Structure of the acquisition
1) shares purchase
2) buyer mergers his company with target (can be reverse)
3) then amortizes the value of target’s assets (tax rate is 12 to 16%)
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Company Structures and M&A in Italy
reverse merger
before
newco target
after
target
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Company Structures and M&A in Italy
Not only the 4 Fs…
Renewable Energies
Hi-Tech / Industrial machinery
Design – Fashion
Wine and food
Tourism
Real Estate
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