CORPORATE | Legislative Decree no. 88/2025 on cross-border transaction and demerger by spin-off enters into force

On 8 July 2025, Legislative Decree No. 88/2025 entered into force, introducing supplementary and corrective provisions to Legislative Decree No. 19/2023, which implements Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 (the Decree). The Decree introduces key refinements to the legal framework governing cross-border conversions, mergers and demergers, as well as demergers by spin-off (scissioni mediante scorporo).

The Decree, drawing from early case-law experiences and interpretative principles developed by professional legal doctrine, clarifies and simplifies the procedural steps for cross-border transactions. Notably, the Decree identifies the specific documentation needed to certify any outstanding liabilities owed to public authorities by Italian companies transferring their registered office abroad. Furthermore, it distinguishes the procedural steps applicable to transactions involving non-EU companies from those involving entities within the EU.

As for domestic demergers by spin-off, the Decree addresses some of the concerns raised by the previous legislative framework regarding, in particular (i) the possibility to transfer the entire assets of the demerging company to one or more beneficiaries or (ii) whether the beneficiary must be a newly incorporated entity or may also be a pre-existing company.

As for the first issue, the Decree explicitly provides that a demerger by spin-off may also be carried out by allocating the entire assets of the demerged company to one or more beneficiary companies, with the corresponding issuance of shares/quotas by the beneficiary in favor of the demerging company, as consideration for the transferred assets. In fact, unlike a full demerger (scissione totale), in a total demerger by spin-off, the demerged company continues to exist, albeit with a revised corporate purpose centered around holding equity interests in the beneficiary company or companies.

As for the second item, the Decree expressly clarifies that the beneficiary of a demerger by spin-off may be an existing company, and not exclusively a newly incorporated one. In fact, since the main characteristic of the demerger by spin-off is the allocation of shares or quotas of the beneficiary company to the demerging company itself, there is no substantive legal reason to exclude pre-existing companies as potential beneficiaries.

Newsletter n. 109 – July 2025