In terms of industries, China enterprises' overseas M&A activities continue to focus on three major industries: energy, mining and public utilities. In 2009, M&A transactions became more concentrated, and the total volume and value proportion of M&A transactions further increased, rising to 40% and 93% respectively. In 2009, China's M&A transactions in the mining and metal industries were about US$ 65,438+0,665,438+0 billion, accounting for 27% of the total transactions in this industry in the world. 58% of China enterprises' energy and mineral M&A took place in Australia and Canada, and the transaction amount was about US$ 9.3 billion, accounting for 92% of all cross-border transactions and 65% of the total M&A of China enterprises in that year. From the investment area, North American enterprises are the first choice for M&A investors in China. From 2003 to 2009, there were about 65,438+006 transactions of M&A enterprises in China, accounting for 24% of all announced transactions and 28% of the total overseas M&A investment. M&A is one of the important ways for enterprises to integrate resources and achieve rapid expansion. Merger and acquisition is conducive to the adjustment of industrial structure, can effectively reduce the transaction costs of enterprises, and at the same time produce economies of scale and synergistic effects, thus enhancing the core competitiveness of enterprises. In cross-border mergers and acquisitions, from the perspective of asset transfer methods, commonly used mergers and acquisitions mainly include equity mergers and acquisitions and asset mergers and acquisitions. Equity M&A refers to the M&A behavior in which investors acquire the equity of the target company by purchasing the equity of the shareholders of the target company or subscribing for the capital increase of the target company. Asset M&A refers to the M&A behavior of investors to buy valuable assets (such as real estate, intangible assets, machinery and equipment, etc.) of the target company. ) and manage assets, so as to obtain the profitability of the target company and achieve the effect similar to equity M&A. ..
In the mode of operation, asset mergers and acquisitions usually need to do due diligence on each asset and transfer the ownership of each asset. The procedure of asset merger and acquisition is relatively complicated and takes a long time. The procedure of equity merger and acquisition is relatively simple, which does not involve asset evaluation and does not need to go through the formalities of asset transfer, so the time required is relatively short.
In terms of investigation procedures, equity mergers and acquisitions need to conduct detailed investigations on all aspects of the enterprise, from the qualifications of the enterprise subject to the assets, liabilities, employment, taxation, insurance and qualifications of the enterprise, so as to prevent the risks of mergers and acquisitions to the greatest extent. Asset M&A generally only involves the property right investigation of trading assets, and does not need to conduct a detailed investigation of enterprises. From this point of view, the risk of asset M&A is relatively low.
From the transaction nature, the transaction nature of equity mergers and acquisitions is essentially equity transfer or capital increase, and the acquirer becomes the shareholder of the target company through mergers and acquisitions and obtains the equity of the target company. The transaction nature of asset merger and acquisition is general asset sale, which generally only involves the contractual rights and obligations of buyers and sellers.
From the perspective of transaction risk, as a shareholder of the target enterprise, equity merger needs to bear all kinds of legal risks existing in the target enterprise before the merger, such as liabilities, legal disputes, related tax disputes, financial risks and so on. Although M&A enterprises will conduct detailed financial due diligence and legal due diligence on the target enterprise before the merger, in practice, the acquirer may still not know all the potential risks of the target enterprise. In asset merger and acquisition, the creditor's rights and debts are borne by the enterprise that sells the assets, and the acquirer does not have to bear any responsibility for the creditor's rights and debts of the target enterprise itself. From this perspective, asset merger and acquisition can effectively avoid various problems and risks involved in the target enterprise. In asset merger and acquisition, the acquirer only needs to investigate the potential risks of the asset itself, and the risks of the asset itself can usually be inquired by the regulatory authorities and other relevant government departments, which is highly controllable. Tax expenditure is an important part of enterprise cost, and tax burden is an important factor to consider whether to adopt equity merger or asset merger. As far as domestic mergers and acquisitions are concerned, equity mergers and acquisitions usually only involve income tax and stamp duty, while asset mergers and acquisitions often involve business tax, value-added tax, land value-added tax, deed tax, urban maintenance and construction tax and education surcharge. Although in many cases, the tax burden of equity mergers and acquisitions is indeed less than that of asset mergers and acquisitions, in some cases, especially in the real estate field, the tax burden of equity mergers and acquisitions is often higher than that of asset mergers and acquisitions.
As far as overseas mergers and acquisitions are concerned, the situation is more complicated, and it is necessary to comprehensively consider the tax laws of the country where the target company is located, the host country of investment and the relevant third countries, as well as relevant international tax treaties. Cross-border mergers and acquisitions of enterprises are generally divided into three stages in chronological order: before, during and after. Before M&A, enterprises should first understand and be familiar with the investment environment of destination countries or regions, especially the legal environment and tax system. Secondly, we should fully understand and investigate the objectives of M&A, which directly affects the construction of the whole M&A framework. If M&A needs financing, then the enterprise needs to consider the legal provisions and specific operations of the investment destination countries or regions on interest expenses, interest remittance, equity financing and bond financing ratio involved in capital weakening, as well as the tax burden of interest withholding tax, so as to ensure that interest expenses can be deducted before income tax and reduce the tax rate of interest withholding tax, so as to reduce the overall tax burden of the company. In the process of M&A transaction, enterprises need to determine the subject of M&A first. For example, if a China enterprise plans to merge with an American company, it can choose to merge with one of its three companies in China, the United States and Hongkong. If it is finally decided to use an American company to acquire the target American company, whether China enterprises directly control their own American companies or adopt intermediate holding companies for mergers and acquisitions, and how many intermediate holding companies are involved, etc., will have an important impact on the company's operation and tax arrangements. Secondly, enterprises need to choose the way of merger and acquisition. As mentioned above, generally speaking, there are two ways of enterprise M&A: equity M&A and asset M&A, so the tax expenditure involved in choosing equity M&A or asset M&A is different. The process of M&A transaction itself often causes the seller's tax obligation. Usually, buyers tend to acquire assets, and sellers tend to acquire shares. After the implementation of M&A, enterprises need to consider how to reorganize enterprises from the perspective of taxation, make the company operate better, and how to legally reduce tax costs and reduce the tax burden of the company.
It can be seen that the whole process will involve tax issues, whether before, during or after mergers and acquisitions and company operations. The discussion of tax issues needs to be combined with the overall operation and management of enterprises, rather than simply tax analysis. The design of tax structure is to reduce the overall tax burden of enterprises by analyzing different merger and acquisition schemes, mainly including the tax burden in transaction implementation, the tax burden in daily operation and the tax burden in the process of investment withdrawal. It is usually necessary to combine the interests of buyers and sellers to design the tax structure. In the process of operating and withdrawing from investment, in order to reduce the tax burden when the income is repatriated to the home country, overseas holding companies are generally used to invest. Generally speaking, holding companies will be established in countries with relatively low withholding tax rates on dividends, interests and royalties.