The domicile of the company is defined as the place of company incorporation, the legal address of the company. A legal entity may be domiciled in the country where it is registered or in the country where it is located. The legislation of many jurisdictions allows changing the place of registration of a company without its liquidation, including “transferring” its domicile to the territory of another state. The main provisions of the domicile are regulated by the Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters and the Code of Private International Law.
Redomiciliation of an offshore company (change of the company’s jurisdiction) – is a procedure of changing its legal address from one jurisdiction to another while maintaining its organizational-legal status and corporate structure. This way, the company ceases to exist as a legal entity in the place of initial registration and continues its activities in another country in accordance with the laws of this new jurisdiction. The reasons for re-domiciliation can be different. As a rule, it is a desire to change the tax legislation to a more favorable one in a new jurisdiction, it is also an entry into new capital markets, avoiding too strict regulatory norms and increased transparency, and a wish to link the shareholder base with the place of registration, etc.
Here’s a list of countries where redomiciliation is allowed:
British Virgin Islands (BVI)
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Private Financial Services has been providing redomiciliation services for many years
The list of required documents and requirements may vary, depending on the chosen state. In most cases, companies need to have the following documents to initiate redomiciliation procedure
The company’s resolution to redomicile
Notification of the competent authority in the state of incorporation that the company will be redomiciliated
Application for redomiciliation of business to the competent authority in the country of redomicile.
An up-to-date set of corporate documents
Due diligence documents on ultimate beneficial owners, shareholders, directors, and secretary of the company.
Certificate of good standing, confirmation letters certifying the solvency of the organization and the absence of criminal and administrative cases against it
Authorization of the competent authority of the new jurisdiction for redomiciliation
The Most Frequent Questions About Redomiciliation Procedure
What will happen to the corporate bank account?
After moving to a new jurisdiction, in most cases, the bank account remains with the company without changes. However, some banks provide special conditions for maintaining bank accounts for companies changing jurisdiction.
What will happen to the tax status of a company?
Moving a business to a new jurisdiction does not change the organization’s tax status. To change the tax status of the company it needs to comply with the substance conditions in force in the selected country.
What are the terms of redomiciliation procedure?
On average, redomiciliation takes 3 to 6 months. The exact dates depend on the chosen country.
What will happen to existing agreements and contracts?
If you notify your counterparties in the manner prescribed by the agreement, then, as a rule, agreements and contracts remain in force.
Will the company registration number change?
After the redomiciliation procedure completion, the company will receive a new registration number.
What Else is Important?
It is important to note that when changing the jurisdiction of a company, it is necessary that both the current jurisdiction and the future one allow redomiciliation in their legislation. As a rule, such a possibility is present in the legislation of classical offshore companies and is quite often used. Redomiciliation of foreign companies to Europe is mostly possible if they meet the requirements of an “international company” (they are a commercial corporate organization; they carry out activities on the territory of several countries).
An example of a redomicile between BVI (British Virgin Islands) and the UAE.
An offshore company registered in BVI can be re-domiciliated to another jurisdiction, for example, the UAE, by accepting the appropriate resolution of the director or shareholders of the company. However, an offshore company will not cease to exist inside the BVI until it notifies the Registrar of Companies about it. In order to carry out the procedure of re-domiciliation from BVI, the company must be in Good Standing (i.e., in an active state with all annual fees and duties paid) and the company must submit a certain package of documents to the Registrar of Companies in the BVI.
Furthermore, it will be needed to provide a Certificate of Incorporation of the company, Articles of Association, Certificate of Good Standing, as well as the conclusion of a BVI lawyer that this company is not prohibited from redomicile from BVI to the UAE.
To get detailed information on redomiciliation procedures from BVI to the UAE, or from any other country, please contact our specialists!
In some cases a company will not be allowed to transfer to another jurisdiction, specifically: when the company is in the process of liquidation or a subject to bankruptcy proceedings; when a bankruptcy trustee or liquidator was appointed; also in cases where the company has entered into negotiations with creditors that have not yet been completed, or when an application has been submitted to the court for forced liquidation or for declaring the company bankrupt.
Thus, the re-domiciliation procedure is one of the international tax planning tools that allow you to resolve several issues related to an offshore company and makes it more convenient to use in accordance with the ultimate goals of the owner.
The international company Private Financial Services has been engaged in consulting since 1998 and provides a full range of services related to the registration, support and redomiciliation of legal entities around the world.
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