The word Escrow has French roots as it derives from the Old French “escroue”, meaning a scrap of paper or a scroll of parchment that the third party held until the transaction was completed.
It is well known that, nowadays, an escrow agreement is still a legal document: a contract between two transacting parties and a third party, called escrow agent, who receives and disburses money or property for the primary transacting parties according to the conditions stated within said agreement.
Being an Italian Trust company, both parties will have to sign a deed called “mandato fiduciario” (the Italian counterpart of the escrow agreement) and to transfer to us the assets (being them money, shares, quotes or movable property in general).
We will therefore carry on every task as it is provided within the agreement and will transfer said shares as it is stated within the contract signed between the contracting parties.
An escrow agreement will therefore allow you to not lose control over your assets until it will be certain that any aspect of the deed with your Italian counterpart has been lawfully carried out.
Just to be clear, an escrow agreement normally includes information such as:
The identity of the appointed escrow agent
Definitions for any expressions pertinent to the agreement
The escrow funds and detailed conditions for the release of these funds
The acceptable use of funds by the escrow agent
The duties and liabilities of the escrow agent
The escrow agent's fees and expenses
The jurisdiction and venue in the event of a legal action
Having an Italian Escrow Agency such as a Fiduciary will allow a foreign client to not transfer any asset to his or her Italian counterpart until the primary operation is completed.
This solution has a relevant role in case of real estate transactions.
In Italy, in fact, it is common for the buyer to transfer an anticipation of the full price (a deposit called “caparra confirmatoria”).
But what happens if the vendor decides to not complete the operation?
The vendor, according to Italian civil code, should transfer twice the value of the deposit back to the buyer and if he or she fails to do so, litigation is on the way.
This depressing scenario can be easily avoided by contacting an Italian escrow agent that will deal with the deposit according to the escrow agreement.
An escrow agreement can also be used in connection with an M&A transaction, in order to regulate every phase of the operation and to provide privacy and confidence.
We can operate as a closing agent in complex Mergers and Acquisitions operations (both in Italy and abroad) that involve many parties and require a third and independent party that can guarantee the lawful respect of each obligations.
We can hold the assets and transfer them to each party according to what it is stated within the agreement when every pre-determined condition has been set.
In doing so, we will handle the cash flow of the contracting parties or third financing banks, and in the meantime hold share certificates and any relevant legal documentarìtion.
In providing escrow these services, we will always maintain neutrality. Each party must particularly acknowledge that is rightfully represented, with no surprises or perceptions of unfair treatment.