Corporate & Corporate recovery, restructuring & insolvency

Corporate re-domiciliation

The Government is consulting on the proposed introduction of a corporate re-domiciliation regime in the UK. What are the proposals and how do they compare to the current rules?



Public consultation

The Government is consulting on the proposed introduction of a corporate re-domiciliation regime in the UK. The proposals would allow a company incorporated in another jurisdiction which permits re-domiciliation to transfer its place of incorporation to the UK whilst retaining its same legal identity.

Many other jurisdictions already allow legal re-domiciliation. Indeed, in some jurisdictions, a company will be deemed to have become a local company, if it is managed and controlled from there, regardless of where it was incorporated.

The current rules

The UK follows the “incorporation theory” of legal domicile. This means that, even if an overseas company is managed and controlled from England, it does not (and cannot) become an English company for legal purposes. Equally, an English company which is managed and controlled from another jurisdiction remains legally an English company – although it can be tax resident in that other jurisdiction.

Thus, if an overseas entity wishes to do business as a company incorporated in England, it must establish (or acquire) an English company, and then transfer its business to that company. Or, if it wants to cease to operate as an English company, and instead run its business as an entity incorporated elsewhere, it must transfer its business out to an overseas entity. Clearly, this will mean a significant commercial burden to assign assets and liabilities, and in some cases such assignment may even be prohibited.

The government’s proposals

The proposed re-domiciliation regime, however, would allow legal continuity (no significant changes need be made to the company’s corporate history, management structure, assets, intellectual and other property rights, contracts, regulatory approvals) and significantly reduce the administrative burden of relocating.

The government intends this to maintain the UK’s reputation as a competitive financial and business centre, to promote financial growth and to attract incoming businesses. Although it isn’t yet clear which sectors and industries are most likely to benefit, the proposal is designed with the object of attracting a wide range of companies and there is unlikely to be any financial threshold requirement.

To ensure consistent application of corporate governance, transparency and accountability rules, the government proposes eligibility criteria such as authorisation from departing country, directors of good standing, solvency, and a report outlining the full legal and economic impact of the transfer. The government also intends to have an overall discretion regarding security risks contrary to the public interest.

Interested in relocating?

For further information about relocating your business to the UK, please contact Sharon Fryer or Ragavan Arunachalm.





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Sharon Fryer

Partner - Head of Commercial Services


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