Given the increasing appeal of the UAE as a destination for corporate entities we have been handling an increasing number of redomiciliation cases for clients from several geographies.

The process of redomiciling legal entities may be relevant for complex legal structures with assets across multiple owned legal entities and therefore may benefit from moving jurisdiction for a legal entity rather than setting up new ones.

Some of the cases our Affinitas Team has handled successfully over the last 6 months include:

  • 4 redomiciliations from Switzerland; (quite a common use case lately)
  • 1 redomiciliations from Luxembourg;
  • 2 redomiciliations from Cyprus
  • 4 redomiciliations from Cayman, BVI and similar jurisdictions

To the benefit of the less technical readers redomiciliation refers to the process by which a legal entity, such as a corporation or company, transfers its registration from one jurisdiction to another while maintaining its legal identity.

Process

This process can vary significantly depending on the laws of the jurisdictions involved, but includes the following steps:

  1. Board Approval: The governing body of the entity typically must approve the redomiciliation plan. This may require a formal resolution or a vote among the directors or shareholders.
  2. Compliance with Local Laws: The entity must ensure compliance with the laws and regulations of both the current jurisdiction and the destination jurisdiction. This includes understanding the implications of moving its legal domicile, such as tax obligations and corporate governance requirements. Often it may include analysis and legal opinion from a local law firm.
  3. Preparation of Redomicilliation application: documents must be prepared, including a KYC, Company status (Or incumbency) attested in UAE embassy, notarized set of corporate documents, all in English or translation. During the process Registry may ask at their discretion for any additional documents, however, there is always a solution to any request.
  4. Approval from the originating jurisdiction: Once Registry is satisfied with the application and documents attached to it, company must get de-registration certificate (=exit certificate) from existing regulatory body, with subsequent legalization in UAE embassy. This may include company dissolution in the originating jurisdiction. Fees need to be paid to the registering Authority
  5. Completion of filing in the New Jurisdiction: issuing of the Company License, MOA and by-laws, shares certificates, Certificate of continuation
  6. Transfer of Assets and Liabilities: The entity must ensure that all assets, liabilities, contracts, and registrations, such as trademarks, are validly transferred or recognized in the new jurisdiction.
  7. Notification to Stakeholders: It may be advisable to notify stakeholders—such as shareholders, creditors, and employees—about the change of domicile to ensure transparency.
  8. Post-Redomiciliation Compliance: After completing the process, the entity needs to adhere to the ongoing compliance requirements in the new jurisdiction, including annual reporting and tax obligations.

Key Benefits of Redomiciliation

Redomiciliation is a strategic decision, often driven by several key advantages:

  • Tax Optimization: A primary motivator is to reduce tax burdens. By relocating to a jurisdiction with more favorable tax laws, a company can significantly lower its overall tax liability. This includes corporate income tax, withholding tax, and other levies. However, it is crucial to ensure full compliance with all tax regulations in both the old and new jurisdictions to avoid penalties.
  • Regulatory Compliance: Some jurisdictions offer simpler or more advantageous regulatory frameworks. Redomiciliation can streamline compliance processes, reducing bureaucratic burdens and administrative costs. This is particularly relevant for companies operating in heavily regulated industries.
  • Access to Capital Markets: Moving to a jurisdiction with a robust and liquid capital market can improve access to funding. This might be crucial for growth or expansion strategies.
  • Enhanced Corporate Governance: Certain jurisdictions have more developed corporate governance standards, offering increased protection for investors and stakeholders. This can enhance a company's reputation and attract investment.
  • Strategic Advantages:A jurisdiction may offer other advantages, such as better infrastructure, skilled workforce, or proximity to key markets. These factors can lead to operational efficiencies and improved competitiveness. Position of the entity in a reputable, white-listed jurisdiction.
  • Asset Protection: In some cases, redomiciliation may offer better protection of assets from legal liabilities or political instability in the original jurisdiction.
  • Mergers and Acquisitions: Redomiciliation can facilitate mergers and acquisitions by simplifying the legal complexities of cross-border transactions.

Please note that not all UAE free zones accept redomiciliations and clients must be aware that even in case of a free zone that accepts the redomiciliation process it is necessary to undergo an in-depth analysis to ensure the satisfaction of not only the legal requirements but the operational requirements as well since corporate service providers often focus only on the former and tend to underestimate the latter to the detriment of the overall project long term feasibility.

Beware that while adhering to the UAE general legal framework each free zone has its own version of company by-laws and different requirements.

We therefore recommend setting clear requirements and following a disciplined process to ensure a successful redomiciliation.

Do not hesitate to contact us if you have specific redomiciliation projects or are evaluating the feasibility of one.

Our Services:

  • Accounting Services​ Tax consultancy and accounting services are what we do best. We provide tax consultancy and accounting services throughout the UAE to individuals, small & medium sized businesses and corporate entities.
  • Re-domiciliation in the UAE At Affinitas DMCC, we are dedicated to helping UK, EU residents achieve their strategic objectives through re-domiciliation to the UAE. Our deep understanding of the UAE’s legal and business landscape, combined with our personalized approach, ensures a seamless and successful transition.
  • Tax Advisory: Tax Minimization across multiple jurisdictions
  • Private Equity Advisory Service​: Mergers, Acquisitions, and Investments in International and Emerging Markets are Cornerstones of Affinitas’ Expertise

Contact Us

For personalized assistance and more information on how Affinitas DMCC can support your transition to the UAE, contact us today. Our team of experts is dedicated to helping you thrive in one of the world’s most attractive destinations for expatriates.

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