M&A Hungary

ENTREPRENEUR EYE: Company seller myths

ENTREPRENEUR EYE: Company seller myths May be just mental compensation for falling enterprise values in this crisis, but I again come across company seller fallacies, that had been on the wane. Here is a handful , for this festive issue of M&A Hungary, to help to observe your companies through anti-fog glasses in the new year.

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How to build on the withdrawal of a multinational

STS Group Zrt., one of Hungary?s leading designers and builders of renewable energy power plants, bought up Datacon Hungary Kft. back in August. It purchased its 100% stake from the Netherlands-based listed company BE Semiconductor Industries N.V. ("BESI"). We spoke to chairman and CEO Tamás Gyepes about the background to the deal, and their plans for the future.read more »

How to build on the withdrawal of a multinational

Closing Deals

At the end of 2009 the number of newly announced deals fell a bit, most of the bigger transactions came to the closing stage. The regional M&A activity also came to a halt.read more »

Closing Deals

Alternatives for management option

The provision of management option is a commonly used tool in the United States and in Western Europe to incentivise the management. The option creates an incentive for the management to increase the shareholder value of the company as, through the option, the management is also granted part of the increased enterprise value of the company. The management option and similar incentives schemes are not, however, commonly used in Hungary. While, on one hand, this can be attributed to the relative underdevelopment of the Hungarian capital markets and company culture, on the other hand, it is attributable to the unfavourable tax regime applicable to such schemes. This article aims to give a summary on the detrimental tax rules relating to the option schemes and the available alternatives.read more »

Alternatives for management option

STRATEGY CORNER: Strength in weakness - the underdog bites back

During this year?s holiday in the ?uplands? of lake Balaton, we acquired a couple of mongrel puppies: Folti and Zsömi. Our four-legged friends are ?twins? with short fur and medium built. Real, house-guarding village dogs. In barking, Folti carries the palm, but after the first weeks? rivalries, Zsömi became garden-guard no. 1, the dominant male. This gains significance at feeding time, when Zsömi chooses plate first and switches them at will, with which Folti complies.read more »

STRATEGY CORNER: Strength in weakness - the underdog bites back

TRANSACTION TAX: Controlled Foreign Companies

Recently (as reported in M&A Hungary in recent months) Hungary has tightened its Controlled Foreign Companies (CFC) legislations. This article seeks to explore the history and approaches to CFC taken by different countries, the type of CFC regulations that exists and the challenges regulators face in enforcing them.read more »

TRANSACTION TAX: Controlled Foreign Companies

Withholding tax 2010 penalises offshore companies in order to balance the state budget. Should we pay 30% now, or possibly less at some time in the future?

The new Act on Corporate Tax, passed on 9 November, broadens the range of entities liable to pay corporate tax. Joining the ranks of taxable entities will be companies and organisations that receive royalties, interest or service fees from a Hungarian-based organisation. However, those organisations that can be proven to have their registered head office in a country that has a double-taxation treaty with Hungary, will not be made subject to the tax.read more »

Withholding tax 2010 penalises offshore companies in order to balance the state budget. Should we pay 30% now, or possibly less at some time in the future?