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\n\tIn brief<\/p>\n
\tFollowing a consultation in 2021 and recommendations made by an independent panel in 2024, the Government has decided to proceed with implementing a UK re-domiciliation regime.
\n\tRe-domiciliation enables a company incorporated in another jurisdiction to change its place of incorporation \u2013 in this case to the UK \u2013 while maintaining its legal identity as a corporate body.
\n\tHighlighting UK growth as a key mission, the Government has confirmed the regime will be inward only.<\/p>\n
What is redomiciliation and why might a company re-domicile?<\/p>\n
Re-domiciliation enables a company incorporated in another jurisdiction to change its place of incorporation while maintaining its legal identity as a corporate body. Re-domiciliation gives companies maximum continuity over their business operations, because the business continues in its existing form in the existing body corporate. The body corporate just changes its place of incorporation. Where re-domiciliation is not possible, as is currently the case in the UK, a business would need to incorporate a new company in the UK and then transfer its business and operations to that new entity. This breaks continuity and significantly increases administrative burden.<\/p>\n
A company might choose to re-domicile for a variety of reasons. Among the examples given in the consultation paper are to gain better access to capital, simplify group structures, access less burdensome tax regimes and for other commercial, economic or political reasons.<\/p>\n
Why is the Government consulting on implementation of a re-domiciliation framework?<\/p>\n
In 2021, a consultation sought views<\/a> on whether to establish a UK corporate re-domiciliation regime to make it easier for foreign companies to move to the UK. Following positive stakeholder views, an Independent Expert Panel (the Panel) was established, which published a Report in October 2024<\/a>. The Government is now responding<\/a> to the Panel’s recommendations and setting out its detailed proposals for its proposed framework.<\/p>\n The Government believes that the UK is well-placed in attracting companies wishing to re-locate due to its business-friendly environment, competitive tax regime, world-leading company law framework, dynamic capital markets and large skilled workforce.<\/p>\n Research has found that a significant proportion of demand for a re-domiciliation regime is likely to come from multinationals restructuring their group, predominantly moving blocks of intermediate holding companies to the UK. The research also indicated it may be particularly attractive to companies within the financial services sector, for example, those wishing to take advantage of the UK\u2019s highly competitive tax regimes for asset holding companies and captive insurance companies.<\/p>\n Having considered the potential merits of an outward facing regime, the Government has concluded that the potential drawbacks outweigh the benefits and will focus instead on an inward regime addressing demand for companies wishing to move to the UK.<\/p>\n The proposed framework<\/p>\n The Government agrees with the Panel\u2019s general approach for a UK regime. The key features of the proposed framework are:<\/p>\n \tRe-domiciliation to the UK should be available to a body corporate which is solvent and intends to carry on business following its re-domiciliation. Information that will be required from a body corporate re-domiciling<\/p>\n The proposal is that a body corporate re-domiciling to the UK will become subject to UK company law and therefore any such body corporate will need to provide the same information as someone applying to form a company in the UK. As the foreign body corporate already exists as a legal entity, it will also be required to provide additional information in respect of any existing obligations and assets.<\/p>\n Among the information to be provided will be the applicant’s current form, jurisdiction in which it is registered, registered number (if applicable) and registered office address.<\/p>\n In line with the Panel’s recommendations, it is proposed that persons who will be directors when the applicant becomes a UK company should be required to make a solvency statement based on the requirements for a reduction of capital (as set out in section 643 of the Companies Act 2006). \u00a0<\/p>\n Administering the regime \u2013 the role of Companies House<\/p>\n The Government intends that Companies House will administer the regime and determine applications for re-domiciliation to the UK, and it is likely that Companies House would issue non-statutory guidance, which could cover expected timeframes for example.<\/p>\n The 2021 consultation proposed that the eligibility criteria for applications to re-domicile should include a requirement that the application poses no threats or risks to national security, with discretion for UK authorities to assess potential risks. Since then, however, the role of Companies House has evolved \u2013 it has new powers to require, remove and share information and new measures have recently\u00a0 been introduced requiring directors and PSCs to verify their identities (see our recap here<\/a>).<\/p>\n On incorporation of a new company a statement is now required that the company will be formed for a lawful purpose. Companies House has a new power to strike a company from the register where information in the registration application is false or misleading. The Panel recommended in its Report that applicants for re-domiciliation should be subject to an equivalent requirement to new incorporations when making their application to confirm that future activities will be lawful. The Government agrees that this, combined with Companies House’s new role and powers, would present adequate protection in addition to existing laws relating to national security which would apply on an ongoing basis.<\/p>\n Other issues to consider<\/p>\n Assuming that the regime is implemented, the list of issues for a body corporate considering re-domiciling to consider will depend on its circumstances. For example:<\/p>\n \tIf the company has issued bearer shares (which no longer exist as a concept in UK company law), it will need to consider how to deal with these, likely having either to cancel them or convert them to registered form. Next steps<\/p>\n Implementation of a UK corporate re-domiciliation regime will require primary legislation to make the required changes to company and tax legislation. The Government plans to introduce legislation as soon as possible \u201cwhen parliamentary time allows.\u201d Operational implementation will also be required, and this will be led by Companies House. The consultation closes on 19 June 2026.<\/p>\n
\n\tThe protection of the members, creditors and others in its existing jurisdiction will be a matter for the law of that jurisdiction.
\n\tApplicants for re-domiciliation will have the flexibility as to whether to become a private or public UK company upon re-domiciliation.
\n\tOnce a body corporate has re-domiciled to the UK, it should be treated broadly in the same way as a company originally incorporated in the UK.<\/p>\n
\n\tIf the company has shares that are subject to existing security interests, these will need to be carefully reviewed before an application is made: the validity and priority of charges created before re-domiciliation is likely to involve a determination under the law applicable before re-domiciliation along with, to the extent applicable, UK conflict of law rules.
\n\tIf the company is already registered on the UK’s Register of Overseas Entities (which records the beneficial owners of foreign entities that hold UK land), it is proposed that the corporate body will be under a duty to de-register from the ROE within a specified period.<\/p>\n
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