In certain cases, legislation allows a company to change its jurisdiction of registration without liquidation, provided that such a possibility is expressly permitted by the laws of both the outgoing and the receiving jurisdictions, as well as by the company’s charter and constitutional documents.
In such situations, the process is referred to as company relocation or, formally, redomiciliation. Redomiciliation is a procedure whereby a legal entity changes its place of registration while preserving its legal personality, corporate history, and contractual obligations.
The transfer of a company does not imply liquidation or termination of its activities. The company continues to exist as the same legal entity, but under a new jurisdiction, with changes to the applicable law and registered address.
When redomiciliation becomes necessary
A decision to transfer a company to another jurisdiction is usually driven by a combination of factors.
The most common reasons include:
- changes in the legislation of the current jurisdiction that worsen business conditions;
- an increase in the tax burden or the introduction of new mandatory compliance requirements;
- the inability to open or maintain a bank account in the existing jurisdiction;
- the need to move into a more transparent and internationally recognised legal environment;
- plans to enter new markets and work with international counterparties.
Each redomiciliation case requires an individual assessment, as the availability and feasibility of the procedure depend on multiple legal and practical factors.
Alternative to redomiciliation and its drawbacks
In practice, a standard but less efficient approach is often used: liquidating a company in one jurisdiction and registering a new legal entity in another country. This option can be costly, time-consuming, and not always commercially justified.
In addition, liquidation results in the loss of corporate history, reputation, established client relationships, and legal continuity. For this reason, where redomiciliation is legally available, it is generally considered the more preferable solution.
Possibility of redomiciliation to the UAE
Redomiciliation to the United Arab Emirates is possible, but subject to certain limitations. At present, this procedure is primarily available to offshore companies and is limited to specific UAE jurisdictions and free zones whose legislation expressly provides for a redomiciliation mechanism.
For onshore companies, direct redomiciliation into the UAE is generally not available. In such cases, an alternative approach is applied – registering a new company in the UAE under a similar name, followed by business restructuring.
Advantages of redomiciling a company to the UAE
Transferring a company to the UAE offers entrepreneurs several key advantages:
- the company retains its status as the same legal entity with uninterrupted corporate history;
- the UAE is an internationally recognised and reputationally reliable jurisdiction;
- corporate income tax applies in the UAE, but the rate remains among the most competitive globally;
- there is no taxation on dividends, interest, or royalties for most structures;
- more favourable conditions are created for working with international banks and counterparties.
It should be noted that after redomiciliation, the company becomes subject to UAE tax and regulatory requirements, including corporate tax and economic substance rules, where applicable to the specific structure.
Bank accounts and company obligations
It is important to understand that redomiciliation does not guarantee the automatic retention of existing bank accounts. In practice, banks typically conduct a renewed review of the company following a change of jurisdiction and may require updated KYC documentation or the opening of a new account.
At the same time, all the company's contractual obligations remain fully in force. This includes contracts with clients, partners, suppliers, as well as any existing financial or legal liabilities. Redomiciliation does not relieve the company of its obligations assumed prior to the transfer.
Stages of the redomiciliation process
The redomiciliation process generally consists of two key stages. At the first stage, the transfer of the company is prepared and approved in the current jurisdiction. At the second stage, the company is registered in the new UAE jurisdiction, and the relevant certificate is issued.
Upon completion of the procedure, the company’s original date of incorporation is preserved, and the company is legally deemed to continue its existence under the new jurisdiction.
Important considerations
A company that transfers to the UAE retains all its rights and obligations. All liabilities existing at the time of transfer remain fully enforceable, including responsibility for non-performance.
