With the ever-changing legal & taxation landscape across the world, some companies may find that the current jurisdiction of the entity may be less favourable or may even prohibit the business purpose. The UAE offers a modern and favourable legal and taxation framework with 0% corporation tax guaranteed in the economic free zones along with free movement of capital.
In such a situation, the company has three possible options to reorganize:
i) Incorporate a new entity in another jurisdiction, transfer the assets and liquidate the entity on a solvent basis, or
ii) Re-domicile the entity to another jurisdiction, or
iii) Merge the entity with an entity in another jurisdiction.
Jurisdictions within the UAE which permit re-domiciliation
At present, ADGM, DIFC, RAKICC, DIFC& JAFZA free zones permit re-domiciliation, and it is not possible to do so on the mainland.
Various entity types can be achieved including companies limited by shares, guarantee, unlimited as well as segregated portfolio and restricted purpose companies.
Overview of the process
Re-domiciliation is a two-part process involving the foreign and local UAE registrars.
At a high-level, the process would involve the following common steps:
Planning Stage: a preliminary application to the UAE authority for the re-domiciliation of the foreign entity to include the foreign constitutional documents, supporting KYC of the trail of beneficial ownership and to check that the foreign name is permitted in the UAE.
Notice: the foreign company will need to provide a 30-day notice of their intention to re-domicile.
Approval:the UAE authority will provide a written approval for the re-domiciliation request once the due diligence process has completed successfully.
Transfer: once the 30-day notice has passed and approval has been granted, the authority will be ready to accept the foreign entity to be registered and will issue a certificate of continuance along with any other required constitutional documents.
Assuming that the due diligence has been completed within the 30-day notice period, the entity process can be completed within 5 working days.