Exit Structuring and Tax Considerations
Tax planning is not a finishing touch. It is not something you hand off to your accountant in the weeks before signing. And it is not something that can be corrected after the fact.
Every exit we work on involves tax structuring. Every single one. Because left unaddressed, the cost is not a rounding error. In most cases, it is significant.
Your Structure Today Determines Your Outcome Tomorrow
The entity you operate in right now is not neutral. It has direct consequences for how your exit proceeds are taxed, and by the time you are sitting across the table from a buyer, the window to change it has likely closed.
Founders operating as sole proprietors or through the wrong corporate structure often discover this at the worst possible moment: after negotiating a strong headline number, only to find a disproportionate share of it was never really theirs. The deal was good. The preparation was not.
This is not about aggressive structures or offshore arrangements. It is about understanding the rules early enough to use them properly.
The International Relocation Question
One of the more common questions we hear from founders preparing for an exit: can relocating to a lower-tax jurisdiction, Dubai, Cyprus, somewhere similar, meaningfully reduce the tax on a sale?
The honest answer is that it depends, and the conditions are more demanding than most founders expect.
Tax authorities generally do not look only at where you reside at the time of a sale. They look at where the business was established, where it operated, and where tax obligations were historically created. A founder who has built and run a business in one country for several years cannot simply relocate a quarter before closing and expect a clean result. Many jurisdictions levy an exit tax precisely to address this.
International tax planning can be structured legitimately. But it requires relocating well in advance, in most cases, years before an exit. Establishing genuine tax residency in the new country across housing, banking, and social infrastructure, and demonstrating a real break from the prior jurisdiction. It is a considered life decision, not a transactional adjustment.
Buyers, particularly those operating in the same jurisdiction as the seller, will examine entity structure carefully. Arrangements that introduce VAT exposure or regulatory uncertainty can affect both the terms of a deal and the quality of buyer interest.
One practical note: if relocation is genuinely on the table, spend meaningful time in the place before committing. A tax outcome achieved at the cost of years spent somewhere that does not suit you is not straightforwardly a gain.
Where Mistakes Are Made
The most consequential mistake is simply waiting too long. Once a process is underway, structural options narrow considerably. A buyer in due diligence will not pause for a holding company reorganization.
The second is treating a conversation as a plan. Tax structuring for an exit should produce documented advice and implementation support — not a summary of a call. The advisor involved at the planning stage should remain available through execution.
The intersection of corporate tax, personal income tax, and deal structure is technical and jurisdiction-specific. It is not an area where general guidance travels well.
How Van Driel Capital Supports their Clients
Van Driel Capital is not a tax advisory firm. We do not provide rulings or jurisdiction-specific structuring advice.
What we do is ensure that every founder we work with has spoken to the right professionals before anything is signed. We maintain a network of advisors who specialize in exit-related tax structuring, people who understand deal mechanics, not only tax compliance, and we make those introductions at the appropriate point in the process.
The strongest deal outcomes we have seen combine well-negotiated terms with thoughtful preparation on the tax side. One without the other leaves value behind.
This piece is for informational purposes only and does not constitute tax or legal advice. Founders should consult a qualified advisor for guidance specific to their situation and jurisdiction.
