IP consolidation for a software group before a funding round

The brief

A software group had developed its platform through contractors engaged by three different group companies across four countries. Nobody could produce a clean chain of title. An IP box claim was being made by an entity that had neither funded nor directed the development.

• Chain of title had to be reconstructed and assigned properly before diligence, not during it.
• The nexus fraction had to be evidenced per asset from real expenditure records.
• Moving IP would trigger exit taxation somewhere; the cost had to be quantified before the decision.
• DEMPE functions had to genuinely follow the IP, which meant moving people, not just contracts.

How it was built, in order

1. 01
   Title audit

   Every contractor engagement reviewed; missing assignments identified and re-executed with consideration and dates recorded.

2. 02
   Exit tax quantified

   Cost of moving each asset out of its current owner calculated before any decision, and one asset deliberately left where it was.

3. 03
   Owner chosen on substance

   Cyprus selected because the core engineering team could realistically be based there, not because of the headline rate.

4. 04
   People moved with the IP

   Eight engineers relocated or hired locally so DEMPE functions genuinely sat with the owner.

5. 05
   Nexus tracking implemented

   Per-asset R&D expenditure tracking put in place from the first day of the new structure, distinguishing related from unrelated outsourcing.

6. 06
   Transfer pricing file

   Royalty rates benchmarked and documented so the licences would survive both diligence and a future audit.