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The Forthcoming Introduction of a UK Corporate Re-domiciliation Regime
Dixcart has been approached by many clients wanting to redomicile their companies from other jurisdictions to the UK.
Re-domiciliation is the process by which a company moves its domicile from one country to another by changing the country under whose laws it is registered.
Changes Being Put in Place to be able to Re-domicile a Company to the UK
Currently, as of February 2022, it is not possible to redomicile a company to the UK, which has meant that Groups wishing to move business to the UK have had to undertake re-organisations, often crystallising liabilities.
All this is likely to change in the near future.
The UK Government is determined to strengthen the UK’s position as a global business hub with an open and competitive free market. The UK Government therefore intends to make it possible for companies to move their domicile, and to relocate to the UK, bringing it in line with other common law countries such as; Canada, New Zealand, Australia, Singapore and a number of US States.
Why is the UK Attractive to Corporates?
Clients are attracted to the UK as the UK is a leading destination for investment and business. It has world class regulatory systems, robust corporate law and governance, as well as a competitive corporate tax system especially for holding companies. Please see our Information Note The UK – A Truly Excellent Holding Company Regime.
A Need to Enhance Reputation
Some Groups with companies incorporated, for historic reasons in offshore jurisdictions, all be it legitimately, have suffered reputational damage by being cited in the Panama and Pandora papers. As a result many are keen to redomicile to protect themselves from reputational damage.
Benefits of Re-domiciliation
The act of re-domiciliation enables a company to maximise continuity of its operations while enabling it to shift its place of incorporation. This enables its corporate history, intellectual and other property rights, contracts and regulatory approvals to remain intact, despite the companies re-domiciliation.
What Happens Next?
The UK Government have just completed an initial consultation and legislation for the introduction of a UK Corporate Re-domiciliation Regime is expected within the next year.