Redomicile in Dubai and Benefit
02 December, 2015
As much as a company can change its registered office or registered agent within the same jurisdiction, it can also move to a new jurisdiction. Corporate redomiciliation is the process by which a company moves its domicile (or place of incorporation) from one jurisdiction to another by changing the country under whose laws it is registered or incorporated, whilst maintaining the same legal identity. The ease with which redomiciliation may take place has increased in recent years.
In line with the international practice of permitting companies to change their seat of incorporation, companies are allowed under the laws of RAK Free Trade Zone (RAK FTZ) in the UAE to change their jurisdiction. Redomiciliation enables companies to avoid liquidating the existing company and transfer portfolio of assets to an entity incorporated for that purpose to a new jurisdiction.
Migrate to UAE
The ability to migrate companies to RAK FTZ opens tax planning dimensions for investors and businessmen.
Within the UAE, it is also possible to redomicile in DIFC (Dubai International Final Centre) and DT?FZA (Dubai Technology and Media Free Zone Authority) which are specialized free zone authorities in financial services and technology, respectively. Foreign companies can redomicile and enjoy the tax and other benefits provided by the UAE tax free regime and its wide network of double tax treaties.
They can also take advantage of a pleasant country which is an International Financial Centre, and a fine place to work and live.
Companies redomicile for a variety of reasons including:
- benefit from a favourable tax environment
- take advantage of less stringent regulation and scrutiny
- align their place of registration with their shareholder base
- move to an international financial centre
- access specialist capital markets
Where an existing company migrates or redomiciles to RAK FTZ, the company's existing legal status, goodwill and operational history is preserved. This process allows for companies who currently operate in more costly, difficult regulatory, high tax and high risk environments in other countries to migrate to RAK FTZ without triggering a disposal of their assets or a diminution in their goodwill or operating history.
The RAK FTZ registration system allows companies to base their global operations and activities, for a fraction of the regulatory costs of being incorporated in and doing business in other countries. Offshore companies can also do business within the UAE provided appropriate licenses are obtained.
Why RAK FTZ
- offers a tax free environment
- the government of RAK is pro-business
- ensure secrecy and asset protection
- absence of international exchange of information agreements
- global headquarters centre
- strategic location on the trade routes of east and west
- wide network of double tax treaties
- What is required to Redomicile
There are two distinct parts in the redomiciliation process:
The outgoing jurisdiction
- the company must be fully up to date with filings. For example, if financial statements are required these must be filed up to date together with any outstanding annual returns etc. Most offshore jurisdictions do not require financial statements to be filed
- there must be no on-going legal process against the outgoing company
- various documents need to be filed with and obtained from the outgoing registry
- a certificate of good standing and certificate of incumbency must be obtained in every case
The incoming jurisdiction - RAK FTZ
Accordingly, an overseas company if authorized by the laws of the jurisdiction in which it is incorporated, can apply for continuation as a company in RAK FTZ. The application must include all information and documents required by RAK FTZ including resolutions, certifications, declarations, confirmations, opinions, authorizations and clearances. Upon approval of the application for continuation, the authority will issue a provisional 'Certificate of Continuation' of such terms and conditions as it considers appropriate. The company should, within 3 months from the date of issue of the provisional certificate, file with the Authority a certificate evidencing that the overseas company has ceased to be incorporated under the laws of the current jurisdiction and return the provisional certificate of continuation. RAK FTZ shall issue the final certificate of continuation which shall be effective from the date of continuation stated in the provisional Certificate of Continuation.
Upon continuation of a Company in RAK FTZ:
- all assets, tangible and intangible, rights and all other property of any kind of the company continue to belong to the company
- the company, its officers and directors continue to be liable for obligations of the company prior to its redomiciliation
- any existing cause of action, claim, duty or liability to prosecution in respect of the company is unaffected
- any civil, criminal or administrative action or proceeding pending by or against the company is unaffected
- any conviction against, or any ruling, order or judgment in favour of or against the company prior to its redomiciliation may be enforced by or against the company
Detailed process to Redomicile in RAK FTZ
Application for consent
A foreign company may submit through a registered agent to the Registrar of Companies in RAK FTZ Authority to be registered in the UAE as a continuing company. The application for consent must be accompanied by the following documents: :
- statutory or regulatory provision which includes a reference to the statutory or regulatory provisions as amended or reenacted from time to time
- proof that the company has obtained all necessary authorizations and consents required under the laws of the jurisdiction in which it was incorporated
- certification that the company is, has been, and will remain as far as is reasonably foreseeable, solvent, signed by the directors of the company
- details of any charges created indicating the order in which they will be registered
- the written consent of directors/shareholders to:
- the making of the application and (ii) the order of registration of charges
- a certificate signed by the registered agent making the application in the form prescribed in the regulations
- the applicable fee
- a notice in the form as depicted in the regulations announcing its intention to continue in the RAK FTZ
The registered agent, within 3 months from the time of consent must submit for registration the below:
- the consent of the Registrar
- Memorandum of Continuation or equivalent issued by the authorities in the jurisdiction in which the company is incorporated
- Articles of the company which conform to the requirements of the regulations
- particulars in the form prescribed in the regulations, of any existing charge
- On delivery of the above documents the Registrar shall register the Memorandum of Continuation and:
- issue a certificate of registration of the Memorandum of Continuation
- enter in the Register of Charges under the international Companies Regulations, the particulars of charges delivered
- The Memorandum of Continuation shall be deemed to be the Memorandum of Association
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