Relocation of the companies from offshore

In the light of recent changes in legislation in the British Virgin Islands, Belize, Bermuda, the Cayman Islands and other offshore jurisdictions, businesses are increasingly asking the question: What will happen next with offshore companies and what to do now?

Companies, like individuals, can migrate to other countries. This procedure is called redomiciliation (transfer of a company from one jurisdiction to another).

It is the unfavorable amendments to the laws of offshore jurisdictions that make businesses now think about either canceling a company in the country of registration and incorporating a new company in another jurisdiction, or moving a company to another country without changing the legal status of the company.

• The jurisdiction was included in the "black" list of states.
• Increasing the cost of annual maintenance of the enterprise.
• Offshore companies are now forced to prove that they are not physically present in the countries in which they are incorporated, and that they are tax residents of other jurisdictions.
• There are requirements for the economic presence of companies (substance) in the country of incorporation, and the company must hire a sufficient number of qualified personnel in the state of incorporation, have a physical office (not virtual), manage the company, carry out business and bear adequate costs in this state.
• Firms from tax-exempt or low-tax jurisdictions face the challenge of opening an account with a foreign bank. This is because banks are very tough on jurisdictions in which the filing of annual financial statements is not provided for at the legislative level.
• Deterioration of tax conditions, regulation and control, increased transparency in the jurisdiction of initial registration.

Today, the most common reason for changing the jurisdiction of a company is the inability to open a corporate account. Therefore, clients who already have an operating business incorporated in tax-exempt or low-tax jurisdictions need to reconsider their current business structures. Of course, you can just leave such a company and register a new one in the right jurisdiction. But if a company has been established for a long time, has well-established connections, partners, image, concluded contracts, then it is irrational to leave it. In such cases, another method is used - moving a foreign company from one jurisdiction to another, from offshore to onshore.

COMPANY REDOMICILATION PROCEDURE

1. An enterprise applies to the Register of Companies of its jurisdiction with an application for redomiciliation to another country in order to obtain permits and necessary documents.
2. The company submits to the Register of Companies an application and the required package of documents, as well as the name of the company (it may be the same as the name of the company before the change of jurisdiction. If the name is already taken in the Register, you can submit another one).

To transfer a company, you will need a full package of documents:

- corporate documents for the company

- Certificate of good standing

- the intention of the company to change the jurisdiction of registration

- registers of directors and registers of shareholders

- information confirming:

the solvency of the firm and that it is not in liquidation

that the original country of incorporation of the company at the legislative level does not prohibit the transfer of companies

- documents for passing the due diligence procedure for the beneficiaries, directors and shareholders of the company.

3. The registrar reviews all the documents and their sufficiency, and upon making a positive decision, issues a temporary Certificate of Redomiciliation (Temporary Certificate of Continuation), confirming the temporary incorporation of the company. From this moment on, the enterprise is endowed with all rights and obligations on an equal basis with other enterprises.
4. After receiving the provisional Certificate, within 6 months, the firm needs to de-register in the previous jurisdiction of incorporation, and submit the Certificate of Termination to the new Registry. If the company does not provide this information and continues to be listed in the foreign register, the new Register of Companies may liquidate the name of the company in its Register and notify foreign authorities about it, or extend the period for providing information for another 3 months.
5. After deleting the enterprise from the foreign register and providing the Certificate of Termination of Activities, the Register issues a Certificate of Redomiciliation, certifying the final incorporation of the company in the new jurisdiction.
6. Companies that plan to change jurisdiction must prepare accounting and financial statements for each year prior to the date of redomiciliation.

The procedure and package of documents that will need to be submitted for the deregistration of a company will differ for each jurisdiction, as they are regulated by the local legislation of the countries.