Mobility regulations in Ireland: Enhanced migration framework and expanded cross border restructuring options for EEA companies
Yvonne O’Byrne & Linda Schaefer
by Yvonne O'Byrne & Linda Schaefer
For companies with EEA operations, the European Union (Cross-Border Conversions, Mergers and Divisions) Regulations 2023 (Mobility Regulations) continue to present an expanse of restructuring and migration options across the EEA, thereby positively impacting M&A activity into 2025.
By way of recap, in May 2023 the Mobility Regulations transposed EU Directive (EU) 2019/2121 (Mobility Directive) into Irish law with significant enhancement of the mechanisms available for corporate migrations across the Irish and EEA[1] legal landscape.
Despite their recent transposition, there has been a notable uptick in the use of the Mobility Regulations, which enable limited liability companies to effectively relocate from one EEA state to another, by way of cross-border conversions, divisions or mergers.
Why the need for change
While a broad framework for cross-border mergers was in place prior to the Mobility Directive, transactions were impeded by a lack of harmonisation and administrative burden. The Mobility Directive, as transposed by the Mobility Regulations, implements a harmonised system for improved cross-border mobility without the requirement for companies to understand divergent legislation in other EEA states.
What is involved in a Conversion, Division or Merger?
Conversion A conversion enables a limited liability company in one EEA country to convert its existing legal form into the equivalent legal form under the laws of another EEA country without dissolution.
DivisionA division enables a company in one EEA country to transfer or divide its assets and liabilities between two or more companies within the EEA. Cross-border divisions can take three forms: full division, partial division or division by separation or hive down.
MergerThe Mobility Directive amended the existing merger framework, providing enhanced protections for employees, shareholders and creditors, and varying the merger by acquisition procedure to no longer require the issuance of new shares.
A cross-border merger enables two or more companies to combine into a single company, at least one of which must be an Irish company, and one must be another EEA company. As with domestic (Irish) mergers, three types of cross-border mergers continue to exist: merger by formation of a new company, merger by absorption and merger by acquisition.
Conclusion
Overall, the Mobility Directive is a welcome development encouraging non-EEA companies to relocate to Ireland and offering flexibility for Irish companies to restructure within the EEA.
Navigation however of these time critical processes requires careful planning and advice from legal, tax, accounting and financial advisors. For further guidance or advice, please contact the Beauchamps LLP team. See here for our full article.
[1] The Regulations anticipate that they will be extended to include the wider EEA and not merely the EU, hence reference is made to the EEA throughout this article.
Yvonne is a Partner in the firm's Corporate, Commercial and M&A group. Yvonne specialises in corporate advisory and M&A, financial services regulation, risk, compliance and privacy. Yvonne has extensive experience advising clients in cross-border transactions including having worked with Irish, Australian and global companies across a wide range of industries including the banking, insurance, engineering, education and healthcare/medtech sectors. Contact Yvonne.
Linda is a Solicitor in the firm's Corporate, Commercial and M&A group. With considerable experience in corporate, commercial and company law, Linda advises international and domestic companies, as well as public sector bodies, on all aspects of corporate law and governance. Linda has acted as associate lecturer in law and worked in the corporate and commercial teams of IFLR 1000 top tier firms in Ireland and Germany.
With over 30 practice and sector areas, Beauchamps LLP is one of Ireland's most progressive corporate law firms, and has supported Irish businesses for nearly 220 years.
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