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Amendment to the “Capital Raise” Bylaw

The Cabinet has approved the amendment to the executive bylaw of the Direct Taxation Law regarding capital raise.

 

The Cabinet has approved the amendment to the executive bylaw of the Direct Taxation Law regarding capital raise.

Based on this bylaw, companies may raise capital through the revaluation of their assets. This kind of capital raise is available every five years, and the companies can only raise capital based on this method just one year after the revaluation of their assets.  Hence, companies may benefit from tax exemptions only every five years for each asset class. Based on the relative law and bylaws, if a company, for example, raises capital via “land valuation”, it may not be authorized to raise capital based on ‘land valuation” for the next five years; while it can be done via other asset classes, for instance via long term investment or machinery and equipment.

This is a great opportunity for the companies for financing.