Summary
Summary
- Asset vs share sale is the first structuring decision in every market, and buyers and sellers usually want opposite answers.
- UK TUPE and the EU Acquired Rights Directive move employees on existing terms in a business transfer.
- Foreign investment screening (CFIUS, UK NSIA, EU screening, FIRB) can apply well below merger control thresholds.
- Singapore has no general capital gains tax and 0.2% stamp duty on share transfers.
01 · Research
Executive Summary
Cross-border M&A introduces significant complexity around legal structure, tax treatment, and employment law. Understanding regional norms is critical to pricing a deal correctly and avoiding post-close liabilities. These notes provide a high-level overview of key considerations for digital asset transactions in Australia, the United States, the United Kingdom, Singapore, and the European Union.
02 · Research
Australia
| Topic | Note |
|---|---|
| Structure | Asset sales are common for smaller deals to allow buyers to cherry-pick assets and avoid assuming liabilities. Share sales are typical for larger, more established businesses. |
| Employment | Employee entitlements (annual leave, long service leave) typically transfer to the buyer in a share sale. In an asset sale, employees are terminated and re-hired, crystallizing entitlements. |
| Tax | Stamp duty can apply to share sales in some states, though it has been abolished for non-land assets in most. GST (Goods and Services Tax) is a key consideration in asset sales. |
| Working Capital | A normalized working capital target is standard, with a post-closing adjustment mechanism. Disputes often arise over the definition of "cash-like" and "debt-like" items. |
03 · Research
United States
| Topic | Note |
|---|---|
| Structure | Asset sales are often preferred by buyers for the tax step-up in basis, allowing for higher depreciation deductions post-close. Sellers often prefer stock sales for preferential capital gains tax treatment. The choice is a key negotiation point. |
| RWI | Representations & Warranties Insurance (RWI) is common in deals over $20M, reducing the need for large seller escrows. |
| Employment | "At-will" employment is the norm in most states, simplifying employee transfers compared to other jurisdictions. However, state-specific labor laws are complex. |
| Escrow | Escrows for indemnity claims are standard, typically 10-15% of the enterprise value for a period of 12-18 months. |
04 · Research
United Kingdom
| Topic | Note |
|---|---|
| Employment (TUPE) | The Transfer of Undertakings (Protection of Employment) regulations automatically transfer employees on their existing terms in a business sale. Failure to consult properly can lead to significant penalties. |
| Structure | Share sales are overwhelmingly the most common structure for profitable businesses. Asset sales are more complex due to TUPE and VAT (Value Added Tax) considerations. |
| Escrow | Escrow / retention accounts are standard practice to cover warranty and indemnity claims, with amounts and duration similar to US norms. |
| Tax | Business Asset Disposal Relief (formerly Entrepreneurs' Relief) reduces capital gains tax for qualifying sellers on up to GBP 1M of lifetime gains. The rate rose from 10% to 14% in April 2025 and to 18% from April 2026, so timing matters. |
05 · Research
Singapore
| Topic | Note |
|---|---|
| Tax | Singapore is a low-tax jurisdiction with no general capital gains tax, making it an attractive location for both buyers and sellers. Share transfer stamp duty is low (0.2%). |
| Structure | Share sales are the standard for established companies. The legal framework is based on English common law, making it familiar to international parties. |
| Employment | Employment law is relatively straightforward. In a share sale, employment contracts continue uninterrupted. In an asset sale, employees must be terminated and re-offered employment. |
06 · Research
EU (General)
| Topic | Note |
|---|---|
| Employment | Similar to the UK's TUPE, the Acquired Rights Directive provides strong employee protections across the EU during business transfers. Country-specific implementation varies. |
| IP | Intellectual property assignment formalities can be complex. Ensuring a clean chain of title for IP is a critical diligence stream. |
| VAT | Value Added Tax rules for asset sales are complex and vary by country. Structuring the deal as a "transfer of a going concern" (TOGC) can mitigate VAT liabilities. |
| Data Privacy | GDPR compliance is a major diligence item. Fines for non-compliance can be substantial, and buyers will scrutinize data handling practices. |
07 · Research
Foreign Investment Screening
Separate from merger control, most major markets now screen foreign buyers of sensitive businesses. Digital assets touching data, communications, defence, AI or critical infrastructure are frequently in scope, even on small deals.
| Market | Regime | What to know |
|---|---|---|
| United States | CFIUS | Mandatory filings for certain critical technology and sensitive personal data businesses; voluntary filings elsewhere. |
| United Kingdom | National Security and Investment Act 2021 | Mandatory notification in 17 sectors, including AI, data infrastructure and communications. Completing a notifiable deal without approval makes it void. |
| European Union | Regulation (EU) 2019/452 plus national regimes | Member states run their own screens; the EU framework coordinates them. |
| Australia | FIRB | Foreign buyers may need approval; lower thresholds apply to national security businesses. |
| Singapore | Significant Investments Review Act 2024 | Applies to designated entities; most private digital businesses are outside it. |
Merger control timelines are covered in Time-to-Close Decay.
08 · Research
Market Comparison at a Glance
| Topic | US | UK | EU | Australia | Singapore |
|---|---|---|---|---|---|
| Usual structure for profitable businesses | Varies (tax-driven) | Share sale | Share sale | Share sale (larger deals) | Share sale |
| Employee transfer in asset sale | Re-hire | Automatic (TUPE) | Automatic (ARD) | Re-hire | Re-hire |
| Warranty insurance usage | Common above $20M | Common | Growing | Growing | Growing |
| General capital gains tax | Yes | Yes | Varies by country | Yes | No |
09 · Research
Cross-Border Checklist
- Holding structureDecide where the buying entity sits before LOI. It drives tax, screening and financing.
- Data transfersGDPR and UK GDPR restrict moving personal data outside the region; plan transfer mechanisms early.
- Currency and funds flowAgree the deal currency and who bears FX movement between signing and close.
- Governing lawChoose a governing law and dispute forum both sides can enforce.
- Local advisersUse counsel and tax advisers in each jurisdiction. These notes are a starting point, not advice.
10 · Research
Work with Acquiry
Acquiry runs buy-side and sell-side mandates for digital businesses. We are not limited to the sectors or markets covered here: any sector, any market, bring it to us anyway. Start a mandate (opens in a new tab).
Reference
Frequently asked questions
Should I sell my business as an asset sale or share sale?
Sellers usually prefer a share sale for a cleaner exit and tax treatment; buyers often prefer asset sales to pick assets and, in the US, get a tax step-up. The answer depends on jurisdiction and tax position.
What is TUPE?
UK regulations that automatically transfer employees to the buyer on their existing terms when a business or part of it is sold. Failure to inform and consult can lead to penalties.
Does foreign investment screening apply to small deals?
It can. Regimes like the UK NSIA and CFIUS are triggered by sector and control, not only deal size, so small AI, data or communications businesses can be in scope.
Is there capital gains tax in Singapore?
There is no general capital gains tax in Singapore, and stamp duty on share transfers is 0.2%.
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About the analyst
Joash Boyton
Founder and Managing Director, Acquiry · Melbourne, Australia · Global coverage
Joash Boyton is the Founder and Managing Director of Acquiry, a specialist M&A advisory firm focused on the acquisition and sale of businesses. He executes buy-side and sell-side mandates from USD $1M to $500M across technology, SaaS, fintech, payments, gaming, blockchain and emerging verticals, and is not limited to them. Any sector, any market.