Introduction to Corporate Cross-Border Transfers, Reorganizations, and Inversions Part 3. “The Anti-Inversion Rules- It’s Not Just for Large Multinational Corporations Anymore”

Introduction to Corporate Cross-Border Transfers, Reorganizations, and Inversions Part 3. “The Anti-Inversion Rules- It’s Not Just for Large Multinational Corporations Anymore”

Tax Law
By Anthony Diosdi IntroductionUnder current law, a U.S. corporation may reincorporate in a foreign jurisdiction and thereby replace the U.S. parent corporation of a multinational corporate group with a foreign parent corporation. These transactions are commonly referred to as inversion transactions. Inversion transactions may take many different forms, including stock inversions, asset inversions, and various combinations of and variations on the two. Most of the best known transactions to date have been stock inversions. In one example of a stock inversion, a U.S. corporation forms a foreign corporation, which in turn forms a domestic merger subsidiary. The domestic merger subsidiary then merges into the U.S. corporation, with the U.S. corporation surviving, now as a subsidiary of the new foreign corporation. The U.S. corporation’s shareholders receive shares of the foreign corporation…
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