The COVID-19 condition has changed various aspects of our lives. For some corporations, restructuring is an inevitable step to help them stay financially healthy and sustainable.
Restructuring in a positive way
Restructuring does not necessarily mean streamlining and laying-off though. It can mean strengthening revenue streams by, for example, putting a stronger focus on e-commerce, refining the roles and responsibilities of the staff, carrying out diversification, outsourcing certain ancillary functions (such as bookkeeping and data processing) to achieve efficiency, or introducing new products to cater for the market trends.
Creating a flexible corporate structure
A company may also take this opportunity to consider restructuring its corporate structure. Having a suitable corporate structure (for example, wisely using overseas companies and setting up special purpose/business vehicles) can achieve tax efficiency and risks allocation. In the long run, it will also facilitate management and future diversification or spin-offs.
Actions to take now
No doubt there will be legal, tax, employment and corporate issues to resolve in the restructuring process. Careful planning, close coordination and opening up to options are all key to success. The efforts will however be rewarded in the long run and will help your company react quickly to different market conditions in the future.
Mabel Leung
Director
Legal and Compliance Services
- (852) 3528 0292
- mabelleung@hkmanagers.com
Please feel free to contact us to see how we may assist you.