Legal and regulatory framework

Types of transaction

What types of transactions are classified as ‘corporate reorganisations’ in your jurisdiction?

In Ireland, the types of transactions that would typically classify as 'corporate reorganisations' are those that involve the transfer of companies, businesses or assets between related group entities, demergers and spin-out transactions, and corporate re-domiciliations. Such transactions typically involve one or more of the following legal steps to achieve the relevant business objective: share or asset transfers (including the assignment of intellectual property rights); share-for-share transactions; share-for-undertaking transactions; share capital reductions or reorganisations; mergers; divisions; voluntary strike-offs; and liquidations.

Corporate reorganisations are executed for a wide variety of purposes, including:

  • as a precursor to the sale of all or part of a business to a third party;
  • by way of a post-acquisition integration of an acquired business;
  • as a precursor to a stock market listing (which may be combined with an initial public offering) of the shares of the holding company, where a pre-listing restructuring of the group may be advisable from a financial or valuation perspective, or would assist the group in complying with its post-listing compliance obligations;
  • to effect the demerger or spin-out of a business, or part of a business, to a new holding company or to the existing shareholders, including in conjunction with a stock market listing, which may be combined with an initial public offering, of the shares of the new holding company;
  • to effect a corporate re-domiciliation, whereby the holding company of a group is replaced with a holding company incorporated in another jurisdiction, which may either be an inbound re-domiciliation to Ireland or an outbound re-domiciliation from Ireland;
  • in response to new or anticipated legal and regulatory changes (including tax changes) that will impact the business of the group;
  • to facilitate a proposed expansion of the business of the group into new geographic or commercial markets;
  • for treasury, accounting or tax purposes, including to facilitate the repatriation of cash to the ultimate parent company or its shareholders;
  • to achieve operational or administrative efficiencies within the group’s business by combining business streams, eliminating duplicative or dormant legal entities; and
  • as a reaction to macroeconomic events, such as the financial crisis of 2008-2011, Brexit, etc.
Rate of reorganisations

Has the number of corporate reorganisations in your jurisdiction increased or decreased this year compared with previous years? If so, why?

Despite the covid-19 pandemic, corporate reorganisation activity involving Irish companies continued to increase in 2020. This was primarily due to the following factors:

  • multinational groups, primarily in the technology sector, seeking to restructure their international operations in response to or in anticipation of changes to Irish, EU and international tax laws and sentiment, in many cases involving a migration of business functions from another jurisdiction or an increase in a group’s existing activities in Ireland;
  • the effect, and continuing uncertainty surrounding the precise form, of Brexit during 2020, in particular among international financial services groups (principally insurance companies and banks) and life sciences companies currently operating in the EU on the basis of regulatory licences and authorisations granted in the United Kingdom, which ceased to have pan-European recognition after Brexit; and
  • post-acquisition integration activity following on from global M&A activity, particularly driven by transactions involving technology companies headquartered in the United States with significant operations in Ireland.
Jurisdiction-specific drivers

Are there any jurisdiction-specific drivers for undertaking a corporate reorganisation?

While corporate reorganisations involving Irish companies are typically driven by transactional or other commercial activity, changes to laws and regulations also influence restructuring activity.

Changes or anticipated changes to Irish, EU and international tax law (resulting in many instances from the Base Erosion and Profit Sharing initiative undertaken by the Organisation for Economic Cooperation and Development (OECD)) have been, and continue to be, drivers of corporate reorganisation activity involving Irish companies, where multinational groups are seeking to restructure their global operations to meet the evolving requirements of cross-border tax rules.

The impact of Brexit has been, and continues to be, a driver of corporate reorganisation activity, whereby international financial services groups (principally insurance companies and banks), previously operating in the EU on the basis of regulatory licences granted in the UK, have restructured their operations such that they are now regulated from Ireland (to protect their pan-­European regulatory status). UK life sciences companies holding European Medicines Agency authorisations have had to restructure their organisations in the same way. However, on a broader basis, outside the regulated sectors, the effects of Brexit following the ending of the Withdrawal Agreement between the EU and the UK continue to be assessed across the spectrum of UK-based international companies that carry on business in the EU and companies that are planning to expand operations into the EU. In this regard, Ireland, with its competitive corporate tax rate (together with other factors, such as its highly educated workforce and being the only remaining natural English-speaking country in the EU) has been a destination of choice for companies looking to migrate operations from the UK to an EU jurisdiction or otherwise establish new operations in the EU.

The Companies Act 2014 (the 2014 Act) entered into effect on 1 June 2015 and consolidated and modernised existing Irish company law. The 2014 Act introduced flexibilities in existing corporate procedures as well as new restructuring mechanics, which facilitate the implementation of certain types of reorganisation transactions. These include:

  • a new domestic merger regime, which, for the first time, permits legal mergers between two Irish private companies (whereby one company survives and the other is dissolved without entering liquidation), supplementing the cross-border merger regime introduced by the European Communities (Cross-Border Mergers) Regulations 2008 (the Cross-Border Merger Regulations), which allows for the merger of Irish limited liability companies with limited companies from other EU member states;
  • a new domestic division process whereby, for the first time, a formal division of an Irish company into two newly formed companies can be effected (with the dividing company being dissolved without entering liquidation);
  • a new validation process for certain restricted transactions called ‘the summary approval procedure’, which now permits a limited company to reduce its share capital without court approval (and, in the process, create distributable profits that may be necessary to legally effect cash repatriation by way of dividend or the distribution or transfer of assets intra-group);
  • the permitted use of the summary approval procedure to approve a tripartite share-for-undertaking type transaction by way of effecting a reduction in capital or undistributable reserves of the transferor company, thus enabling such a transaction to be implemented where the transferor does not have sufficient distributable profits to do so otherwise; and
  • the removal of the requirement for unlimited liability companies to have distributable profits to pay dividends or make other distributions.

How are corporate reorganisations typically structured in your jurisdiction?

This depends on the underlying purpose or aim of the reorganisation. Most intra-group reorganisations involve share or asset transfers (including the assignment of intellectual property rights), share transfers, share-for-share transactions, share-for-undertaking transactions, share capital reductions or reorganisations, mergers, divisions, voluntary strike-offs and liquidations. Most often, a series of these steps will need to be undertaken to achieve the desired objectives of the broader reorganisation.

Demergers and spin-out transactions typically involve the packaging of the relevant demerger business assets under a new ‘spinco’ that is wholly owned by the existing parent. The demerger is then effected either by directly distributing the shares of the spinco to the shareholders of the parent, effecting a tripartite share-for-undertaking type transaction by way of effecting a reduction in capital or undistributable reserves of the transferor company, or by means of a statutory scheme of arrangement. A statutory scheme of arrangement requires the approval of a majority number of parent shareholders representing at least 75 per cent in value of the shares represented in person or by proxy at a general meeting of the parent, together with a court sanction of the scheme.

Other types of transactions that could, for various reasons, form part of corporate reorganisations, would be:

  • a conversion of the legal entity type (for example, a conversion of a limited liability company into an unlimited liability company to avail of certain advantages that form of legal entity is allowed under Irish law);
  • a transfer of the place of management and control to or from Ireland for tax planning purposes; and
  • the establishment by a foreign company of branch operations in Ireland.


In many cases, corporate reorganisations involving Irish companies will also have components involving affiliates incorporated or domiciled in other jurisdictions, meaning non-Irish law will have a bearing on the form of restructuring being undertaken and will have to be considered in conjunction with non-Irish legal and tax counsel.

Laws and regulations

What are the key laws and regulations to consider when undertaking a corporate reorganisation?

The provisions of the 2014 Act, which has consolidated Irish company law, is the primary piece of legislation that needs to be considered as part of any reorganisation. The 2014 Act is the primary source of law that contains the rules pertaining to the making of dividends and other distributions, capital reductions, the financial assistance prohibition (and exceptions thereto) and the process for effecting statutory mergers, divisions and schemes of arrangement. The 2014 Act is also the primary source of the now codified directors’ fiduciary duties and rules for the preparation of individual and group statutory financial statements.

The Cross-Border Merger Regulations apply to cross-border mergers between Irish and other EU incorporated companies.

In the case of a business transfer, the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (the TUPE Regulations) will be of particular importance when employees are part of the relevant business.

Additionally, there is a considerable amount of Irish legislation and regulation that could potentially have an impact when planning a corporate reorganisation, depending on the nature of the reorganisation itself, the industry sector of the group and the specific activities carried on by the relevant Irish company. The most common example is in the case of a company holding a regulatory authorisation or licence to carry on its activities in Ireland (for example, a company carrying on banking, insurance or other financial services activities), the underlying legislation may require the consent of the licensing authority (which, in the case of a financial services company, would be the Central Bank of Ireland) to be provided before the corporate reorganisation can be implemented.  Data privacy law considerations, including implications under the General Data Protection Regulation (GDPR), have increasingly become a factor in various forms of corporate reorganisations.

Irish tax and stamp duty legislation will also need to be considered as part of the analysis in determining the tax implications of any proposed reorganisation.

National authorities

What are the key national authorities to be conscious of when undertaking a corporate reorganisation?

The key national authorities are:

  • the Central Bank of Ireland. Where a company holds an authorisation to carry on a financial services business from the Central Bank of Ireland, consent from that authority may sometimes be required in advance of implement the restructuring;
  • the Government Grant Authorities. In certain circumstances, the terms of grant aid funding provided by government grant aiding bodies such as Industrial Development Authority (IDA) or Enterprise Ireland may require a consent to be obtained before certain corporate reorganisations can be implemented;
  • the High Court. Under the Companies Act 2014, a court order may be required to sanction certain restricted transactions that form part of reorganisations, such as mergers, divisions, schemes of arrangement and share capital reductions;
  • the Companies Registration Office. Most reorganisations involving Irish companies will require certain filings to be made at the Irish Companies Registration Office (CRO), including details of any variation of share capital, the passing of any special shareholder resolutions and revisions to the constitution of the company; and
  • the Registrar of Beneficial Ownership. Following the coming into effect of the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (which implemented the EU’s 4th Anti-Money Laundering Directive), all Irish companies are now required to make filings with the Register of Beneficial Ownership (RBO) in respect of individuals who are considered to be beneficial owners of the company. Equivalent obligations exist in other EU member states as well as in the UK. In some instances, a corporate reorganisation may result in a requirement for an Irish company to make an updated filing with the RBO where there is a change in the company’s beneficial owners.

Law stated date

Correct on

Please state the date on which the law stated here is accurate.

February 2021.