The UK government on October 27 opened a consultation on the possibility of introducing a “corporate re-domiciliation” regime to make it easier for companies to relocate to the UK.
Under the re-domiciliation regime, foreign-incorporated companies would be able to change their place of incorporation to the UK while maintaining their legal identities as corporate bodies. This would enable maintaining continuity in business operations and reduce administrative complexity compared to other approaches relocating and incorporating in the UK.
The government believes that the proposals would increase the attractiveness of the UK as a destination for relocating a business and investing. It adds that the changes would bring the UK into line with around 50 jurisdictions that currently offer such re-domiciliation regimes.
The consultation specifically asks about the advantages of the regime as opposed to alternative means of relocating. It further asks about what types of companies and sectors would have the most interest in the regime, what jurisdictions companies would be likely to re-domicile from, and, more broadly, how much significant interest there would be in such a regime.
Tax law changes may also be needed to facilitate the regime, the government notes, including protections against using the regime to avoid UK tax. With that in mind, it asks about a range of tax issues relating to company residence for tax purposes, loss importation, capital gains, intangible assets, and other issues.
The government also seeks comments on whether the regime under consideration should duplicate – or avoid duplicating – any existing regimes.
It notes that jurisdictions that currently have re-domiciliation regimes include, in Europe: Belgium, Cyprus, Luxembourg, and Ireland (for investment funds only). In North America, such regimes are available in Canada and several US states (e.g., Delaware, Florida, Wyoming). New Zealand and Singapore also offer such regimes, and Hong Kong is in the process of establishing one for investment funds.
Comments will be accepted until January 7.
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