Redomiciliation
Redomiciliation is the transfer of the company’s seat from one jurisdiction to another. In our world of constantly changing legislation, many non-resident companies opt to relocate their existing company to jurisdictions with less demanding requirements or better tax planning opportunities.
Redomiciliation
While it may be simpler to shut down a company and start a new one elsewhere, often the existing company’s portfolio presents for many business people considerable value. Redomiciliation allows the company to keep its asset portfolio, existing name, bank account, corporate structure and business contracts. Only the company’s registered address will be changed to a different country.
As for redomiciliation in Europe, only a few member states support such relocation. The most flexible to redomicile to are:
Cyprus
Cyprus is one of the most favourable European environment to start or set up a company or business, and so, it is referred to as the gateway of the European common market due to the favourable tax policies, economy and other foreign investment laws.
- Cyprus has signed agreements on double taxation with 60 countries;
- the financial statements in Cyprus are submitted in accordance with international standards;
- Cyprus has one of the lowest corporate tax rates in Europe;
- many categories of expenses can be referred to prime cost.
Gibraltar
The status of Gibraltar is specific territory. It entered into European Union within the UK, its citizens are British citizens and European citizens, but it is not part of the European Union Single Customs Area, Gibraltar is an independent jurisdiction, has its own tax system and currency.
- information about shareholders and banking operations is disclosed only by court order;
- corporate income tax is levied only on income from activities in Gibraltar;
- 0% tax rate on incoming dividends and capital gains;
- no VAT.
The necessity to redomicile a company may arise from due to one or several reasons:
- adverse changes have been made to the laws of a country of a company’s incorporation;
- a company intends to choose more favorable Jurisdiction (transparent);
- a company is registered in a jurisdiction which is included into a particular countries or territories blacklists;
- costs of annual maintenance of a company have essentially increased.
Advantages of redomiciliation
For reasons stated above business may from time to time decide to liquidate a company incorporated in one jurisdiction and incorporate new one in another jurisdiction with consequent transfer of assets, rights, liabilities, etc.
As it was mentioned previously, redomiciliation has some features that turn to advantages while comparing this procedure with liquidation of one company and incorporation of new one, for example:
- Saving of company’s assets and rights without its transfer from liquidated company to newly incorporated company;
- If permitted by bank, it is possible to continue carrying out business activity with use of the existing bank account;
- The reputation formed during company’s activity and its market positions will be affected less than in case of liquidation and formation of a new company.
General information about redomiciliation procedure
The transfer of domicile of company from one jurisdiction to another requires registration acts as in the original jurisdiction, so in the new one. It is important that legislation of both jurisdictions must permit redomiciliation. Such permit must be confirmed on the stage of search of jurisdiction redomiciliation to which is planned.
The majority of offshore jurisdictions (such as BVI, Seychelles, Panama, Belize and others) permit redomiciliation. Generally, redomiciliation procedure includes application to the Registrars of both jurisdictions by submitting documents to them . The list of such documents, requirements to their form and terms of procedure may vary because they are regulated by national legislative or other acts of particular state or territory.
The result of redomiciliation is registration of company in new jurisdiction with new registration number and registered office address, as well as discontinuance of registration in the original jurisdiction and strike the company off the Register.
Contact us
Intranovum limited
Company number 11344337
- United Kingdom, London, 65 Compton street, EC1V 0BN
- info@intranovum.com