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European Union (Cross-Border Conversions, Mergers and Divisions) Regulations 2023

Ireland finally transposed the EU Mobility Directive into national law in May 2023 with the European Union (Cross-Border Conversions, Mergers and Divisions) Regulations 2023 (Regulations). Our Corporate Governance team looks at how the Regulations will benefit limited liability companies in other EU Member States who are looking to establish and operate a company in Ireland and vice versa.

The European Union (Cross-Border Conversions, Mergers and Divisions) Regulations 2023 (Regulations) will benefit limited liability companies in other EU Member States who are looking to establish and operate a company in Ireland and vice versa. The Regulations do not however apply to any regulated financial services entity that is subject to resolution powers under the EU Bank Recovery and Resolution Directive (BRRD), thus excluding banks and significant investment firms, nor do they apply to certain collective investment undertakings.

The Regulations enable certain limited liability companies to effectively relocate from one EEA state to another, by way of:

  • Conversion
  • Division, or
  • Merger.

The Regulations provide specific measures relating to each of these cross-border operations aiming to ensure that the relevant transaction is not artificial or abusive. The Regulations also ensure that the interests of employees, members and creditors are protected.

Overview of the three different cross-border operations

The Regulations have repealed and replaced the previous regulations which governed cross-border mergers and have introduced the concepts of cross-border conversions and divisions.

A separate comprehensive set of rules will apply to each of the operations with slight deviations in each case. In summary, the characteristics of the newly introduced conversions and divisions are:

  • Cross-border conversions enable limited companies to change their legal form from one EEA state into a similar form in another EEA state (ie to relocate to that other EEA state).
  • Cross-border divisions enable a limited company to transfer all of its assets and liabilities to two or more companies in a full division, or transfer part of its assets and liabilities to one or more companies in the case of partial division or division by separation.
  • Cross-border mergers can take three forms: mergers by absorption, mergers by formation of a new company and mergers by acquisition. The Regulations update the pre-existing cross-border merger rules. Further protections for employees, creditors and members are introduced which are not within the previous cross-border rules. Any cross-border merger procedure where the draft terms were delivered to the CRO prior to 24 May 2023 may however continue under the old regime.

The Regulations introduce new rules at the initial stages of the relevant cross-border operation or process with the aim of deterring abuse of the process. As with the previous cross-border merger regime, the High Court will be the competent authority in Ireland which will ultimately sanction the operation in question.

As mentioned, banks, large investment firms and certain collective investment undertakings are out of the scope of the Regulations, but insurers and other categories of regulated firm could, in theory, make use of the processes outlined. Where an Irish-regulated financial entity seeks to convert (relocate its headquarters), merge or divide, the Central Bank must be notified of the proposal well in advance, and its response but be made known to the High Court.

It is unclear how the Central Bank would otherwise engage with an applicant, what rights it would have to block or amend the restructuring proposal and whether it could or would in practice continue to supervise any such entity post-relocation. The role of the Central Bank where a regulated entity in another EEA member state seeks to convert, merge or divide into Ireland is even less clear.

Any proposed restructuring under the new Regulations involving a regulated financial entity will therefore require careful analysis from a financial regulatory perspective, and potential engagement with the Central Bank, ahead of any project plan being prepared.


The introduction of a harmonised framework for cross-border conversions will afford new opportunities for non-Irish EEA registered companies to relocate to Ireland in a more streamlined and efficient manner than is currently available. Its application to regulated financial entities will require careful analysis in advance however as the interplay between the conversion regime and the regulatory regime is not spelled out in detail.

For further updates on the Regulations and expert guidance on relocating to Ireland, contact a member of our Corporate Governance team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

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