Guidance sets out the SFO’s expectations for investigations but leaves open questions, particularly for cross-border investigations.

By Stuart Alford QC, Nathan H. Seltzer, Christopher M. Ting, and Harriet Slater

On 6 August 2019, the UK Serious Fraud Office (SFO) issued its much-anticipated Corporate Cooperation Guidance (the Guidance) outlining, in substantial detail, the steps that the SFO expects corporations to undertake in order to be eligible for cooperation credit when the SFO makes charging decisions, including in relation to whether a deferred prosecution agreement would be appropriate in lieu of full criminal prosecution.

In many respects, the Guidance is unsurprising and provides the types of investigative best practices that sophisticated companies and their advisers are already familiar with – particularly companies familiar with US regulators’ expectations regarding cooperation credit.

Cross-border migration of German real estate companies is generally possible, however its admissibility must be determined on a case-by-case basis.

By Christian Thiele

International real estate investors continue to favour German real estate, however, the same does not always apply to German real estate companies. International real estate investors, for instance, often find German capital maintenance rules too strict because such rules, inter alia, complicate the withdrawal of liquidity and the cross-collateralization of financing taken out by other portfolio companies. In addition, real estate companies that are permanently established in Germany may be subject to German trade tax, which hinders many business plans. Some international real estate investors who invest through the Netherlands or Luxembourg prefer, for convenience purposes, entities established under those legal systems. Therefore, investors consistently question whether a cross-border migration of German real estate companies is possible. In this context, real estate investors must distinguish between a mere transfer of the administrative seat, i.e., the place where the essential day-to-day decisions are made, and a transfer of the company’s statutory seat, i.e., a conversion of a German company into a foreign company.

Cross-border merger

German law does not provide specific rules for cross-border migration. Pursuant to sections 122a seqq. of the German Transformation Act, merging a German entity into another entity established under the laws of an EU Member State is possible. However, as a cross-border merger usually cannot be implemented without triggering real estate transfer tax, this procedure is usually not relevant in practice.