In some cases, the company's place of incorporation may be changed, in case it is permitted by the terms of the jurisdiction, the articles of incorporation and the memorandum of association.
In this case, we talk about the transfer of business, or officially its re-domiciliation. The transfer of business or re-domiciliation is the change of the company's place of its location and registration. For such an operation to be possible, the option for its execution should be available in the local legislation. Moreover, the company's memorandum of association must also allow such option.
The company transfer does not mean its liquidation, but only the change of location and jurisdiction, and the history of all business operations of the company remains preserved.
This means that the transfer of business does not affect the ability of the company to conduct business. The need to transfer a company can arise for several reasons, for example:
- The legislation of the country of registration has changed, which significantly worsens business conditions;
- It is possible to transfer to a jurisdiction with more favorable taxation conditions;
- Being in the current jurisdiction, the company cannot open an account in a local bank;
- Due to some changes in tax legislation, the tax payments have changed;
- The transfer to a new jurisdiction will open up prospects for entering new markets.
The reason for moving a business may be one of the above listed, or their combination, and in any case it is always the case-to-case issue.
Typically, in such cases, the standard approach is typically used – the company is closed down in the old jurisdiction, and then a new company is established in a new jurisdiction – and business starts from scratch.
At the same time, liquidation of a company can be quite a complex, expensive and lengthy process.
Also, if the company has already got a good reputation on the market and the client base that has been developed over the years, then its closing is clearly not a good solution. Therefore, it will be more appropriate not to liquidate a legal entity, but to transfer the company to another jurisdiction – to perform its re-domiciliation.
Re-domiciliation of the offshore companies is permitted in the UAE. It is important to note that the transfer of companies to the UAE is possible for offshore companies only. In the case of onshore companies, a direct re-domiciliation is not available, but it is possible to register a company with a similar name.
When choosing an option of re-domiciliation, entrepreneurs get a set of benefits, including the following ones:
- A company after being transferred to the jurisdiction of the UAE retains its legal status;
- The UAE has very favorable tax legislation – one of the best corporate tax rates;
- There are no taxes on income, payment of dividends, interest, and royalties in the UAE;
- The UAE is the well-known and widely accepted jurisdiction;
- Opportunity to open an account for your company in a reliable bank in the UAE.
Thus, the possibility of the company transfer to the jurisdiction of the United Arab Emirates will provide favorable conditions for taxation, maintain its authority, existing status and client base, as well gives new options to enter new markets and gain access to foreign capital.
So, after the company is transferred, it keeps its bank account, all rights and obligations under contracts, only the legal and physical address is changed, and your counterparties should be informed about that.
The process of re-domiciliation can be represented in two main stages: the preparation of documents for the transfer of business out of the current jurisdiction and the actual transfer process with registration to a new address in a new jurisdiction.
When the transfer process is completed, the initial company registration date remains in effect, and after the Certificate is issued to the UAE, it is deemed that the company continues to exist in a new jurisdiction.
Important to know!
Those who are going to carry out the transfer of the company to the UAE should remember that all the obligations that the company has at the time of the transfer for it remain.
This is applied to all contracts – all the obligations of both the company itself and its partners are preserved to the full, including the responsibility for their failure.
If you have decided or have questions on how to re-domicile your company to the UAE, you should contact our consultants – you will be provided with all the necessary information and we will also help you to perform all necessary procedures.