The Government confirmed earlier this year that it intends to introduce a
UK corporate re-domiciliation regime.
Currently, to achieve UK domicile a foreign company needs to incorporate a new company as a holding company and complete a ‘share for share’ swap. However, the holding company is considered a new legal entity which creates complex tax and legal issues.
Main benefits of the proposed new scheme:
- Allowing a company to change its country of incorporation to the UK but maintain its legal identity as a corporate body, which means that no property, stock or assets need to be transferred.
- Potential to significantly reduce the complexity involved in the process of relocating to the UK.
- Giving companies maximum continuity over business operations when redomiciling and substantially reducing administrative complexity compared to other routes of relocating and incorporating in the UK.
- Modernising the UK’s legal framework and bring the UK in line with a number of jurisdictions such as Canada, Singapore, New Zealand, Switzerland, Belgium, Luxembourg, Malta, Jersey and a number of US states.
Outbound re-domiciliation
- Outbound re-domiciliation is also being considered.
- This would allow for a UK company to leave the UK to become a foreign incorporated entity.
- This would increase the attractiveness of a UK regime to overseas companies who may wish to have flexibility to move to or from the UK in the future.
The proposals relate to corporate migration and not just the movement of tax residence from one jurisdiction, which can in many cases already be moved into/out of the UK by moving the company’s place of central management and control.
What’s next?
A significant majority of respondents supported the Government’s proposals for a re-domiciliation regime.
Currently there is no indication as to timing of the implementation of the proposed new regime and further consultation is expected in due course.
DMH Stallard LLP is a highly regarded UK law firm and our
Corporate Team is a key element of the firm. The companies and businesses coming to the London markets often have an
international presence and we are experienced in the jurisdictional issues that have to be addressed whilst working with lawyers from outside the UK.
For further advice and information, or if we can be of assistance regarding any other corporate matter, please
contact Giedre Doig.