In the M&A arena, the word "interest" is often the real driver behind the controlling rights transaction. Behind the seemingly glamorous "acquisition drama", there are often layers of "silent agreements". Especially in the acquisition of controlling rights, those "invisible people" who are unwilling to show up but want to control the power have been lurking in the gray area of equity holding for many years.
But this gray area is gradually being illuminated by the searchlight of supervision and taxation. Especially with the launch of the fourth phase of the Golden Tax and the gradual normalization of equity penetration, many holding arrangements that were once "hidden in the corner" have begun to usher in the moment of liquidation. Therefore, a new proposition is placed before entrepreneurs and investors: How to transfer equity holding from underground to above ground? From the tax blind spot to compliance sunshine?
At this crossroads of transformation, Goheal has accompanied many listed companies to complete the "sunshine" operation of the controlling rights structure. Today, we will take you into this capital gray area with blurred boundaries, risks and opportunities, and talk about the advanced paths from "invisible holding" to "transparent holding".
American Goheal M&A Group
1. Proxy holding is not just a fig leaf, but also a "transaction lubricant"
Many people misunderstand equity holding and only regard it as a "fig leaf" to cover up the actual controller. But the truth is far more complicated than this. In mergers and acquisitions, proxy holding is often a strategic arrangement to achieve cross-border equity docking, avoid sensitive identities, balance the interests of multiple parties, and even set up a "buffer" for transactions.
For example, Goheal once managed a project in which industrial capital acquired the controlling rights of a Hong Kong-listed company. Because the buyer's parent company involves state-owned capital background, in order to avoid the constraints of the approval rhythm, the SPV company was established as a merger and acquisition vehicle by senior executives in the early stage. After the project enters the mature stage, it will gradually "restore shareholding" through internal structural adjustments.
Similar scenarios are also common in the A-share market, especially in the transfer of controlling rights combined with agreement transfer and voting rights delegation, proxy holding has almost become a "default means". The question is - once it is penetrated, who will pay for the tax account of the proxy holding?
2. What kind of serial bombs are hidden under the tax blind spot?
Proxy holding itself is not an illegal act, but it is most afraid of being "penetrated". Once it is discovered and characterized as "actual equity change" by tax, regulatory, court and other institutions, it will trigger a series of tax events - personal income tax, corporate income tax, stamp duty, land value-added tax, equity assessment tax payment... Each of them can shake the stability of the entire acquisition chain.
What's more troublesome is that this kind of "tax payment" is often traced back, which not only disrupts the original arrangement, but also catches the acquirer off guard. In several practical cases where Goheal participated, we have seen the following "minefields":
1.) The proxy holder concealed and failed to report, and the actual controller was identified as tax evasion due to "non-compliant proxy holding";
2.) After the acquisition was completed, due to tax penetration identification, tens of millions of taxes were additionally paid;
3.) The information disclosure of listed companies did not reflect the real controlling relationship in a timely manner, causing fluctuations in the secondary market;
4.) The fair value was not assessed during the process of proxy holding, triggering tax base revaluation and tax payment.
In other words, the concealment of proxy holding was once an advantage; but in the era of "data is supervision", this advantage is quietly turning into the biggest risk.
3. "Sunshine" does not mean "openness", it is an institutional reshuffle
Then the question is - how to transform calmly? How to smoothly introduce the complex proxy holding structure in the past into the track of "sunshine"?
This is not a simple structural reorganization, but a "systematic migration" with tax, legal and capital trust.
In this regard, Goheal has explored a "three-step transformation path":
The first step is to legally confirm the relationship: by signing a standardized proxy holding agreement, supplementing the historical shareholding path, and clarifying the capital flow, ensure that the proxy holding relationship is legally traceable and can be proved.
The second step is tax assessment planning: entrust a third-party assessment agency to revalue the equity value, reasonably plan the timing and path of "equity restoration" or "equity transfer", and make full use of policy dividends such as deferred taxation and special restructuring tax exemptions.
The third step is penetrating disclosure and structural optimization: in accordance with regulatory requirements, actively disclose the real holding structure to the China Securities Regulatory Commission, exchanges, and tax authorities, and design subsequent governance structures (such as family trusts and employee stock ownership platforms) to form a dual compliance barrier of "penetration and isolation".
These operations sound full of terminology, but for entrepreneurs, their essence is one sentence: turn the once sneaky capital arrangements into institutional tools with rules to follow.
This is exactly the strategic core of "Capital Sunshine 2.0" that Goheal has repeatedly called for in recent years - not to prohibit proxy holding, but to guide proxy holding from "black box operation" to "structural design", so that it can be transformed from a capital risk source to a governance toolbox.
4. Who will be the next "penetration prey"? The warning signal has been lit
Don't think that "proxy holding" can still be safe for a while. With the advent of regulatory technologies such as the fourth phase of the Golden Tax, actual controller penetration, big data comparison, and "one person, multiple households", those M&A teams that are still using "shadow proxy holding", "bridge account" and "shareholder nominee" routines are likely to be captured by the "data network" inch by inch.
We once assisted a real estate company founder in completing the "invisible shareholding" restoration and reorganization because he used the same proxy holding channel in multiple PE projects and was investigated by the tax bureau for "suspected evasion of shareholding information disclosure". Although he was not held accountable in the end, he could only "cut meat and clear out" at a higher cost than expected, which can be regarded as a warning sample under proxy holding penetration.
At the same time, the regulatory logic has also shifted from "characterizing by facts" to "judging by behavior": as long as you exercise control, as long as you conceal in information disclosure, even if you are not a major shareholder on the books, you may be identified as the actual controller, and then trigger a series of penalties such as information disclosure accountability, insider trading, and false statements in information disclosure.
At this moment, if you don't hurry up to make it sunny, it will really become "sunshine" after penetration - not only will it be bright, but there will also be thunder and lightning.
5. The future of proxy holding: from "avoiding supervision" to "helping governance"?
Back to the question itself, why do we talk about "sunshine"?
Because proxy holding is no longer a tool for "hiding people", but can be redefined as an institutional arrangement of "incentive structure", "governance tool" and "merger buffer layer".
For example, in the case of Goheal's participation in the competition for the controlling rights of a pharmaceutical company, the original shareholder concealed the actual controlling intention through the employee proxy holding platform. However, in the process of sunshine transformation, we assisted them in transforming the original proxy holding structure into a dual-wheel governance structure of "employee stock ownership platform + family trust", which not only stabilized the team, but also clarified the governance logic to the regulators, and exempted the high tax burden through a special restructuring path, achieving a "win-win-win" result.
Goheal Group
This is what we call "capital transparency 2.0": not to eliminate gray tools, but to reshape the use logic of gray tools, so that it has institutional legitimacy and compliance boundaries in the sun.
Conclusion: In the "deep waters" of controlling stake acquisitions, is your proxy holding structure ready to welcome the sun?
Sunshine is not scary, but what is scary is that the structure is unable to cope with it after it is exposed. Controlling stake acquisitions have entered the "deep water game" stage, the lights of supervision are getting brighter and brighter, and the tax scans are getting more detailed. Those structural arrangements that hope to "hide for a while" may be waiting for the moment to be penetrated.
The question is: Does your company have hidden shareholders or non-compliant proxy holding? If sunshine is launched, is your tax burden controllable? How to design a structure that complies with regulations and ensures the safety of control?
Welcome to leave a message in the comment area for discussion. Goheal is willing to work with you to play the most complex capital game in the most sunny way in the new era of controlling rights acquisition.
[About Goheal] Goheal is a leading investment holding company focusing on global mergers and acquisitions, focusing on the three core business areas of listed company control acquisition, listed company mergers and acquisitions and restructuring, and listed company capital operation. With its profound professional strength and rich experience, it provides enterprises with full life cycle services from mergers and acquisitions to restructuring and capital operation, aiming to maximize corporate value and achieve long-term benefit growth.
