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Any border crossing ­– whether in-bound to the United States or outbound from the United States –requires careful consideration of tax consequences.  When structuring a merger, acquisition or other strategic partnering arrangement, a company should consult tax counsel in the relevant jurisdictions from the very outset of the transaction.  For example, one of the most important decisions in structuring an acquisition or divestiture is whether the transaction will be a stock or asset deal.  In addition, some M&A transactions may be structured as tax free in the United States, depending on what may appear to be minor differences in how the transaction is structured.  If non-U.S. acquirers expect to receive a dividend stream from the U.S. target, the transaction should be properly structured to deal with withholding tax requirements.  Ignorance or neglect of these issues can have serious tax consequences that can not only impact the parent company but also the entire group of companies.  We have counseled numerous clients at the outset of their businesses, and as they expand their operations through the formation of new legal entities, acquire other companies, or enter into strategic partnering arrangements with other market participants. Most clients have the most flexibility, and the legal solutions tend to be the least costly early on; on occasion we see transactions derail or value lost due to lack of planning or early advice.


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