How to redomicile a company to the UAE
How do I redomicile my company to the UAE?
Redomiciliation is a process by which a company transfers its domicile from one jurisdiction to another while maintaining the same legal identity.
The main benefits of redomiciliation are that the company can hold on to its full history as well as all existing contractual relationships. It has often been used for tax reasons, so that a company can move to another jurisdiction without the need to close the business and transfer assets to a new entity.
As a result of increasing demand for corporate migration over the last few years, the process has become markedly easier and is prevalent in jurisdictions operating under common and civil law frameworks as well as in island states.
In the UAE, the existing regulatory framework does not allow for corporate migration to the ‘mainland’. However, there are a number of free zones with regulatory frameworks which allow corporate redomiciliation.
Why consider redomiciliation?
The need for redomiciliation may be brought about by several reasons, including:
- Unfavourable changes to the laws of the country in which a company is incorporated
- The desire to seek out a more favourable tax regime
- Facilitating access to new international markets
- The desire to reduce annual running costs
Some offshore jurisdictions are beginning to see regulatory changes which no longer make them a beneficial place in which to operate. Rather then liquidate a company and have to start from scratch, redomiciliation is a far easier solution which allows for better continuity.
Why migrate your company to the UAE?
The UAE has established itself as a modern, innovative business destination with a world class infrastructure and diverse business opportunities. It offers several key competitive advantages over other business destinations such as:
- 0% tax regime
- 100% foreign ownership
- Full repatriation of capital and profit
- Large number of free zones offering many corporate vehicles and structuring options
- Extensive network of tax treaties
The UAE has also recently been removed from the EU’s blacklist of non-cooperative jurisdictions for tax purposes. This reflects well on the UAE's commitment to the international standards set by the OECD and the EU and has positive implications on international investors looking to migrate a business to the UAE.
The blacklist was created in 2017 in response to tax avoidance in the EU as a means to combat tax abuse and unfair tax competition. The UAE was removed from this list on October 10, 2019, and as part of its commitment to comply with EU regulations it created the Economic Substance Regulations (ESR). This requires that UAE registered companies maintain an ‘adequate economic presence’ in the UAE relative to the activities that they undertake.
Which Freezone would be best for my company?
There are many business free zones in the UAE, all offering distinct advantages and built around different commercial categories and licensing options.
Not all of these, however, include provisions that allow for redomiciliation. Two popular UAE free zones which do allow corporate migration are the Ras Al Khaimah International Corporate Centre (RAKICC) and the Abu Dhabi Global Market (ADGM).
Redomiciliation to RAKICC
The Ras Al Khaimah International Corporate Centre (RAK ICC), in the emirate of Ras Al-Khaimah has five types of corporate structures that are available:
- Company limited by shares
- Company limited by guarantee
- Restricted purposes company
- Segregated portfolio company
- Unlimited Company
Licences are issued for sectors such as media, trading, commercial activities and consulting services. One notable benefit of setting up in RAKICC is that it is very competitively priced when compared to other UAE free zones. Other benefits include:
- No requirement to file financial reports
- Common Law legal framework
- Maintenance of existing legal status and operational and banking history
To be compliant with the ESR, RAKICC registered companied must meet the following criteria:
- Prove the existence of adequate physical assets, expenditure and employees in the UAE
- The company must be directed and managed in the UAE
- Show that its core income generating activities are carried out in the UAE
Redomiciliation to ADGM
The ADGM has a very central location in Abu Dhabi, and it offers a wide range of business licences with a focus on financial services, specifically corporate and transaction banking, brokerage, wealth and asset management, investment management and fintech. Some of the benefits of redomiciling to ADGM include:
- Common Law legal framework
- High credibility with banks
- No minimum capital requirement for non-regulated activities
- Full benefit of UAE double taxation treaties
Which jurisdictions in the UAE support redomiciliation?
As well as ADGM and RAK ICC, redomiciliation in the UAE is also available in these other Freezone jurisdictions:
- Dubai Multi Commodities Centre (DMCC)
- Dubai International Financial Centre (DIFC)
- Jebel Ali Free Zone Authority (JAFZA)
What this the process for company redomiciliation to the UAE?
The redomiciliation process will vary with each jurisdiction, and part of the process will be to initiate the redomiciliation in the current jurisdiction first. We will need to liaise with the Registration Authority in the current jurisdiction to map out the precise steps and documents required, depending on the corporate structure and powers within the organisation.
The general process for redomiciliation to the UAE is below:
- STEP 1 - Application
Initial Approval: The request to re-domicile a foreign company is submitted by the registered agent with the Freezone Regulatory Authority.
Trade Name Registration: The registered agent will submit and check the Trade Name with the Freezone Regulatory Authority to confirm if the trade name is available and reserve it.
- STEP 2 – Submission of Documents
The agent will collate all the constitutional documents and the continuation application
The agent will also complete the KYC requirements for individual Shareholder/ Director/ Secretary and for corporate Shareholder/ Director/ Secretary
- STEP 3 – Review
Due Diligence Check & Review: The Freezone Regulatory Authority will carry out due diligence & reviewing and verifying the application and documents. This will be done through the agent.
- STEP 4 – Acceptance Confirmation
The Regulatory Authority will issue invoice for the redomiciliation process and for the establishment of the licence within the new jurisdiction. Invoice must be paid in full to proceed.
- STEP 5 - Approval and Issuance of Certificate of Continuation by the Registrar
The Regulatory Authority will issue the certificate of continuation and then issues the licence.
Please note that any corporate services within ADGM will be delivered through a third party ADGM registered Corporate Service Provider (CSP). PRO Partner Group is not a CSP within ADGM.