Contribution of securities to a Holding in Morocco

Contribution of securities to a Holding in Morocco

What is a Holding?

The notion of holding company has not been mentioned at all on the legal level, neither at the level of law 17-95 on the public limited company SA, nor at the level of law 05-96 on the limited liability company SARL and other forms of companies. There is therefore no legal definition of the holding company. Indeed, with regard to the legal form, the holding company can take several forms, whether it is the public limited company SA, the limited liability company SARL or other legal forms.

Therefore, the Holding is a company which holds several participations of a variety of companies, after having grouped them together, and of which it controls the control.

What is the real valuation of a holding company?

The constitution of a Holding by way of contribution of securities consists in evaluating all the securities held by a person in one or more companies in order to identify their real values. This operation also makes it possible to bring out a capital gain or loss-plus, the taxation of which is subject to a tax deferment which consists in the capital gain realized on the securities contributed not being taxable when it is event, but during the subsequent assignment.

What are the advantages of a holding company?

The objective really sought through the implementation of this provision, is to encourage recourse to the constitution of Holdings, whose system presents a solution for a mode of organization and management of the group more efficient thanks to the concentration management power in the hands of the consolidating company.

Apart from the tax advantage of creating a holding company in Morocco, we can list other advantages in relation to finance. Indeed, investors tend to find the Holding a choice that seems to them to be the most adequate in terms of financing, for several reasons. First of all, the Holding brings together several companies, which makes it easier to apply for financing from the bank. In addition, dividends serve as a means of financing borrowings when they occur. Also, it is possible to use cash pooling or centralization of cash, which is a technique that consists of grouping the cash of each subsidiary into a single account, that of the Holding.

What about the legal plan? in fact, just as there are facilities in terms of negotiations with the bank for a holding company, there are also points in advance at the legal level, all the more so when it comes to agreements to negotiate, thanks to the weight of the Holding, a group of companies in one. On the other hand, “a parent company” allows for the proper management of business transfers. But not only ! when there is a dilution of capital, control of the entire group remains under control.

Exemption under conditions:

As a result, it was introduced under article 161 ter-III of the CGI, the exemption of the net capital gain realized following the said contribution of all the elements of the assets and liabilities of their company to a company subject to the IS. And this, subject to the respect of several conditions namely:

Full contribution of all securities held by the natural person (partial contribution is not permitted) in one or more companies

The equity securities contributed must be assessed by a contribution auditor determining the real value of the securities at the time of the contribution, hence the need to proceed with the valuation of the company in question at using recognized evaluation methods

The natural person who has contributed all of his capital securities undertakes in the deed of contribution to pay income tax on the net capital gain resulting from the transaction. contribution, during the subsequent partial or total sale, repurchase, reimbursement or cancellation of the securities received in return for the contribution operation.

For the company receiving the contribution, the net capital gain resulting from the sale of the aforementioned capital securities after the expiry of the 4-year period is determined by the difference between the sale price and the value of the securities at the time of the contribution.

Failure to comply with these conditions results in the taxation of the capital gain recorded following the operation of the contribution, without prejudice to the application of the penalties provided for by the provisions of article 208 of the C.G.I.

Certified Chartered Accountant DPLE – Chartered Accountant Tangier Tetouan Morocco

Statutory Auditor – Statutory Auditor

Fes Avenue, Corner Ibn Toufail
Tangier, Morocco, 90000.
info@aafir.ma
Website: www.aafir.ma