Buse Heberer Fromm successfully advises a Cross-Border Conversion of a Dutch B.V. into a GmbH

Buse Heberer Fromm advised IMW Immobilien SE in what appears to be the first successful relocation of a corporation’s residence from another EU country to Germany while preserving continuity of its legal identity (“Cross-Border Conversion”). The relocation was carried out on the basis of the “Vale” decision of the European Court of Justice (ECJ). The Berlin-based IMW Immobilien SE manages, through its subsidiary, real estate assets with a fair market value in the three-figure million euro range. Until now, the cross-border conversion of a company preserving continuity of its legal identity was not possible under the German Reorganization of Companies Act. The reason for this was that up until now only German legal forms qualified for such a reorganization – in contrast to Tax Law. With the “Vale” decision dated July 17, 2012 (Rs. C-378/10), the ECJ has now made the “cross-border conversion” possible, based on the freedom of establishment laid out in Articles 49, 54 TFEU. This means that it is now possible for a corporation from another EU country to not only migrate its residence to Germany and convert into a GmbH, but also to retain continuity of its legal identity throughout the conversion. The Higher Regional Court of Nuremberg had previously considered that cross-border conversions are generally permitted with its decision dated June 19, 2013 (12 W 520/13), relying on case law of the ECJ. At the beginning of 2015, Buse Heberer Fromm has been able to achieve registration of such a conversion with the Municipal Court Berlin Charlottenburg, apparently the first instance in Germany.

Consultants Buse Heberer Fromm Attorneys-at-Law Tax Consultants PartG mbB:

Hartmut Fromm (Corporate Law / M&A; Berlin); Daniel Weiner (Corporate Law / Tax Law / M&A; Berlin), Gerrit Herlyn (Corporate Law; Berlin), Raimund Grüter (Tax Law; Berlin).

Background

IMW Immobilien SE keeps a real estate portfolio with a market value in the three-figure million euro range through its subsidiary Valbonne Real Estate 3 GmbH, formerly a Dutch B.V. The registered office (statutory seat) of the fully consolidated subsidiary was transferred, by relocation, to the residence of the other group companies of the IMW Immobilien SE in Berlin, preserving continuity of its legal identity throughout the conversion.

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Tags: #cross-border conversion

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