Question

A rash of UK-originated biotechnology companies have listed on the US Nasdaq exchange in the last few years. Which of the following options may be most appropriate for a company wishing to do the same: putting in place a UK holding company or a US holding company?

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Answer

Typically a UK biotechnology development business will be established legally as a single UK limited company it will be UK tax resident and will have received direct equity investment from either UK EU or US venture capital firms. There is usually no investor or bank debt. The equity typically consists of tiers of preferred equity issued at each funding round which pay out to shareholders on a last in first out basis.

The company has zero or minimal revenues and may be hugely loss-making as...