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Currently, relocating a company to the UK typically involves winding up the existing entity, setting up a new UK company, transferring assets and contracts, and potentially incurring significant tax costs. Corporate re-domiciliation offers a much simpler alternative that avoids these steps and preserves the company’s continuity. For larger companies, publicly listed companies, or those in regulated sectors, the costs and complexity of the current process can make a move to the UK impractical. It has been suggested that companies using a re-domiciliation regime could save 50–90% of the costs associated with the current process.
Following a public consultation in 2021, the UK Government established an Independent Expert Panel to develop detailed proposals for a re-domiciliation framework. The Panel’s Report was published in October 2024, and the Government subsequently published a further consultation document in March 2026 setting out its proposed framework for implementation.
Inward-Only Regime
A notable feature of the Government’s proposals is that the regime will only allow companies to move into the UK — not out of it. This departs from the Panel’s recommendation for a two-way system. The Government has concluded that the risks of allowing UK companies to relocate abroad outweigh the benefits of increased flexibility. Companies wishing to move their incorporation out of the UK would continue to use existing methods, such as setting up a new company in the chosen country and transferring assets from the UK entity. It is worth noting that Australia, Singapore and Hong Kong all operate inward-only regimes, so this is not a novel approach.
Eligibility Criteria
To re-domicile to the UK, a foreign company would need to qualify as a “body corporate” under the Companies Act 2006 — broadly, this means it must be a legally recognised corporate entity. The company must also be solvent (i.e. able to pay its debts) and intend to carry on business after re-domiciliation.
Importantly, the Government agrees with the Panel that there should be no minimum size requirements, no obligation to demonstrate a particular level of business activity in the UK, and no minimum trading period. In other words, the eligibility criteria will mirror those that apply when registering a new UK company. The applicant would also have flexibility to choose whether it becomes a private or public UK company upon re-domiciliation.
Effect of Re-domiciliation
Once re-domiciled, the company would be treated as a company incorporated under the Companies Act 2006, and it would keep its existing legal identity. All of the company’s property, rights, liabilities, contracts, debts and other obligations would carry over seamlessly. Any ongoing legal proceedings would also continue, with the re-domiciled company stepping into the shoes of the original entity.
Potential Demand and Benefits
Research indicates that much of the demand is likely to come from multinational groups looking to restructure, predominantly by moving intermediate holding companies (i.e. companies that sit between a parent and its operating subsidiaries) to the UK. The regime may also be particularly attractive to financial services businesses, such as those wishing to take advantage of the UK’s competitive tax regimes for asset holding companies and captive insurance companies (companies set up within a group to insure the group’s own risks).
Companies are likely to be attracted from countries that already permit outward re-domiciliation, including the US, Canada, New Zealand, and various offshore financial centres such as Luxembourg, Switzerland, Jersey, Guernsey, the Isle of Man, the Cayman Islands, Bermuda and the BVI. The introduction of the OECD’s global minimum corporate tax rate of 15% (which reduces the tax advantages of incorporating in low-tax jurisdictions) and increasing reputational concerns associated with offshore incorporation are expected to drive further demand.
Implementation and Next Steps
Bringing the regime into effect will require new legislation – specifically, changes to both company law and tax law. The operational side of the regime will be managed by Companies House. The Government has acknowledged that this will take time to deliver, but has committed to moving as quickly as possible, recognising that companies are already waiting to relocate to the UK once the regime is available. This reflects the high level of interest that we have seen from our clients in connection with these proposals.
Practical Implications for Corporate Clients
For boards considering re-domiciliation, there are a number of practical points to bear in mind when planning a move.
- First, regarding timeline and preparation, companies should be aware that the overall timeline will largely depend on the outward re-domiciliation process in the country they are leaving. By way of example, processing an application in Singapore may take around two months from submission, whereas in the Cayman Islands the process could take approximately two years.
- Second, boards will need to consider passing certain shareholder resolutions before the move takes effect, so that the company complies with UK legal requirements from day one. This is especially important for publicly listed companies, where calling a shareholder meeting can be expensive and time-consuming. If the company waits until after re-domiciliation to obtain these approvals, it risks breaching UK requirements or being unable to take certain actions. Key areas where advance shareholder approval is likely to be needed include authorising directors to issue new shares, waiving existing shareholders’ rights to be offered new shares first (known as pre-emption rights), approving executive pay policies and authorising share buybacks.
- Third, from a directors’ duties perspective, the standard duties that UK law imposes on company directors (set out in sections 170–181 of the Companies Act 2006) will apply from the moment of re-domiciliation. Any actions or decisions taken while a person serves as a director of the re-domiciled company will be governed by UK law, whereas conduct before re-domiciliation will continue to be assessed under the law of the previous country of incorporation.
- Fourth, the proposed directors must each provide a solvency statement no more than 15 days before the date of the application.
- Fifth, in relation to accounting and distributable reserves, re-domiciled companies will need to comply with UK accounting standards. A transition period of four years from the date of re-domiciliation is proposed for switching to UK GAAP (Generally Accepted Accounting Practice) or UK-adopted international accounting standards. On distributable reserves (i.e. the profits available to pay dividends), the usual UK rules will apply in full. However, there will be a helpful concession: directors may treat profits and losses arising before re-domiciliation as realised (or unrealised, in the case of losses) where they are unable to determine their status after making reasonable enquiries.
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 or your usual solicitor in the corporate team.
