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Copyright © 2013 - 2017. Tai Pan Management Services Ltd.,  Reg. No 1942748 Registered in Hong Kong. At 65-67 Bonham Strand East, Hong Kong

TAIPAN MANAGEMENT SERVICES LIMITED TAX PLANNING, RESIDENCY & ADVISORY SERVICES
COMPANY FORMATION SERVICES

OUR RE-DOMICILIATION GUIDE

The purpose of this guide/FAQ is to assist clients in understanding the purpose of corporate re-domiciliation, the advantages and disadvantages, and to give an indication of the costs involved.  

To avoid repetition, the terms “outgoing” to refer to the existing jurisdiction from which the company is to be re-domiciled, and “incoming” to refer to the jurisdiction into which the company wishes to be re-domiciled.


RE-DOMICILIATION OF COMPANIES BETWEEN JURISDICTIONS

Tai Pan Management Services Ltd., can assist you to re-domicile (continue) your company in another jurisdiction e.g. BVI to RAK, Gibraltar to Belize, Cyprus to Dominica etc.

WHAT DOES RE-DOMICILIATION MEAN?

Much in the way that a company can change its registered office/registered agent within the same jurisdiction, it can also “move” to a new jurisdiction.  Corporate re-domiciliation is the process by which a company moves its ‘domicile’ (or place of incorporation) from one jurisdiction to another by changing the country under whose laws it is registered or incorporated, whilst maintaining the same legal identity. The ease with which re-domiciliation may take place has increased in recent years.  

Not all countries allow re-domiciliation.  Those that do, tend to be Commonwealth “common Law” (as opposed to Civil law jurisdictions).  Notable exceptions are Austria, Hungary, Latvia, Luxembourg, & Liechtenstein which are civil law but do permit re-domiciliation and conversely UK, Singapore, Hong Kong which are common law but do not generally allow re-domiciliation in or out.



WHY SHOULD I WANT TO RE-DOMICILE?

There can be many reasons.  Companies’ may re-domicile for a variety of reasons including:

a) To take advantage of more favourable tax laws.
b) To take advantage of less stringent regulatory provisions;
c) To align their place of registration with their shareholder base;
d) To access specialist capital markets.  



FROM AND TO WHICH COUNTRIES CAN A COMPANY BE RE-DOMICILED?

Much in the way that a company can change its registered office/registered agent within the same jurisdiction, it can also “move” to a new jurisdiction.  Corporate re-domiciliation is the process by which a company moves its ‘domicile’ (or place of incorporation) from one jurisdiction to another by changing the country under whose laws it is registered or incorporated, whilst maintaining the same legal identity. The ease with which re-domiciliation may take place has increased in recent years.  

Not all countries allow re-domiciliation.  Those that do, tend to be Commonwealth “common Law” (as opposed to Civil law jurisdictions).  Notable exceptions are Austria, Hungary, Latvia, Luxembourg, & Liechtenstein which are civil law but do permit re-domiciliation and conversely UK, Singapore, Hong Kong which are common law but do not generally allow re-domiciliation in or out.

Countries/jurisdictions from which re-domiciliation is generally possible.  



Andorra

Anguilla

Antigua and Barbuda

Aruba

Austria

Bahamas

Bahrain

Barbados

Belgium

Belize

Bermuda

British Virgin Islands

Brunei

Cayman Islands


Cook Islands

Costa Rica

Cyprus

Dominica

Gibraltar

Grenada

Guernsey

Hungary

Ireland

Isle of Man

Israel

Jersey

Latvia

Lebanon



Liberia

Liechtenstein

Luxembourg

Macao

Malaysia (Labuan)

Maldives

Malta

Marshall Islands

Mauritius

Montserrat

Nauru

Netherlands Antilles

Panama

Philippines



Portugal (Madeira)

Samoa

Seychelles

St Kitts and Nevis

St Lucia

St Vincent Grenadines

Switzerland

Turks and Caicos Islands

UAE (Dubai, RAK)

Uruguay

US Virgin Islands

USA (Delaware)

Vanuatu

Countries/jurisdictions from which re-domiciliation is not possible.

Hong Kong

United Kingdom

Singapore                                      

 … together with most “civil law” countries

 To re-domicile, both the existing jurisdiction (where the company is currently registered) and the target jurisdiction (where the company is to be ‘continued’) must be on both country’s lists of countries where re-domiciliation IS possible.  There are certain countries (UK, Hong Kong, Singapore) that one might expect to allow re-domiciliation, but don’t.

In such cases other solutions must be found.  



WHAT IS REQUIRED TO RE-DOMICILE?

There are two separate parts to re-domiciliation:  

    The outgoing jurisdiction: -

  1. The outgoing company must be fully up to-date (where, for example, accounts are required these must be filed up to date together with any outstanding annual returns etc.).
  2. There must be no on-going legal process against the outgoing company.   
  3. Various documents need to be filed with and obtained from the outgoing registry e.g. resolutions and consent to re-domicile etc.
  4. A certificate of good standing and certificate of incumbency must be obtained in every case.  

     The incoming jurisdiction:-

The requirements of the incoming jurisdiction vary wildly.  As a minimum, a resolution to re-domicile and a Certificate of Good standing (CoGS) may suffice.  Other jurisdictions require detailed information, certificates of solvency etc., all of which are expensive and time consuming to obtain.  In broad terms; Belize, The Marshall Islands and The Seychelles are the least demanding and consequently the cheapest, whereas Dubai/RAK, Cyprus, Mauritius, and the BVI are more expensive.




WHAT ARE THE ADVANTAGES OF RE-DOMICILIATION?

The advantages are subjective and often involve the balancing of the additional costs of re-domiciling against the inconvenience (and costs) of not doing so.

As an example Mr. X formed a Gibraltar company in 2004. He has established bank accounts for this company and the company has a number of commercial contracts.  For various reasons Mr. X wishes to re-domicile the company to the Seychelles.  

    If he re-domiciles, he will pay certain costs, but:

  1. The company continues its legal existence with effect from the original incorporation date – 2004 in this example. … It can quite properly continue to state “in business/incorporated for over 10 years” for example.
  2. Websites can remain “as is” with only minor changes to privacy policies and T&C.
  3. All of the company’s legal contracts remain valid; although notification of the change of jurisdiction may be required to counter-parties.
  4. Bank accounts may remain in place, as it is still the same company.  However, please note that banks will almost certainly require a full set of documents pertaining to the incoming jurisdiction. Some banks are easier to deal with than others – it is therefore wise to ask the bank informally before proceeding with re-domiciliation.

By contrast, Mr. Y also has a company registered in Gibraltar and wishes to transfer/continue his business in Belize.   He has no contracts and his bank accounts are (relatively) easily replaced.  In such a case he might be better advised to register a company (perhaps with the same name) in Belize, establish new banking relationships, and simply arrange for the Gibraltar Company to be struck off.



COSTS OF RE-DOMICILIATION

These vary according to jurisdiction.  The cheapest being Belize, Seychelles and the Marshall Islands, where the re-domiciliation process will generally cost less than US $1,000 / €750, to which must be added

Other jurisdictions e.g. Mauritius, BVI the Emirates (RAK etc) and Cyprus, although ending up with the same thing, require considerably more work and are thus much more expensive (up to around €4,500 in the case of the Emirates/RAK and Cyprus). The existence of a unique feature (eg VAT registration in the case of Cyprus, or a beneficial tax treaty could well make the more expensive option more attractive.

Our own fee will be quoted once we know the “to” and “from” jurisdictions together with any possible complications.



SHOULD I RE-DOMICILE?
OR
SIMPLY CREATE A NEW COMPANY WITH THE SAME NAME ELSEWHERE?

This will depend entirely on the circumstances of the existing company and the following factors will probably decide this.  

If one or more of the above factors are applicable it is probably worth considering re-domiciling the company.  

If not, it will probably be more cost effective to simply close the “old” company and establish a new one in a more congenial jurisdiction, with the same, or different name depending on circumstances.




WHAT IF MY EXISTING OR CHOSEN JURISDICTION DOES NOT ACCEPT RE-DOMICILIATION?

You may wish to contact us for advice, but, assuming the unanimity of the shareholders, the simplest method would be to create a new company (NewCo) in the chosen jurisdiction.  NewCo would then acquire 100% of the issued shares of the existing company (OldCo).  Assets would be transferred from OldCo to NewCo over time and NewCo would also take on all new business.

After a suitable period and after all assets had been transferred to NewCo and creditors had been paid, OldCo could be struck off or otherwise dissolved.

The above would necessarily require the consent and agreement of all shareholders. It would also be necessary to properly document the transfer/sale of assets.

 




GLOSSARY: -

Certificate of good standing – a registry issued document that confirms that the company is fully up to date in its filings.  In some cases this document will also confirm the directors and shareholders, thus obviating the need for a Certificate of incumbency.

Certificate of incumbency – this document is normally issued by the company secretary/registered agents and confirms the current directors and shareholders.

 




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