United Kingdom To Boost Its Global Business Hub Status Through New Corporate Re-Domiciliation Plan
As part of the 2021 Autumn Budget announcement, the United Kingdom has initiated a public consultation seeking views from interested parties on the introduction of a corporate re-domiciliation regime that aspires to promote jobs, innovation and investment in the United Kingdom through enabling companies to take advantage of the United Kingdom's top-tier status as a global leading financial centre and its strong infrastructure and skills network.
The establishment of a re-domiciliation regime would enable a foreign-incorporated company to change its place of incorporation to the United Kingdom, while maintaining its legal status as a corporate entity.
According to the UK government, the introduction of an attractive corporate re-domiciliation regime would increase the competitiveness and availability of the United Kingdom as a destination to locate a business and to invest, and would also modernize the United Kingdom's legal framework, bringing it in line with around 50 jurisdictions that also have re-domiciliation regimes in place. Moreover, a new corporate re-domiciliation regime would contribute to increased investment and skilled jobs, as companies would transfer their headquarters to the United Kingdom, as well as increased demand for the United Kingdom's internationally respected professional services, such as audit, accounting and legal. The United Kingdom's innovation base would also be enhanced and expanded through non-resident companies choosing to re-locate research and development (R&D) functions in the United Kingdom.
Finally, the introduction of a corporate re-domiciliation regime could support and develop the United Kingdom's capital market, by making it easier for companies to re-domicile to the United Kingdom and access the United Kingdom's world-leading capital markets as UK companies. It could also improve corporate governance and transparency, as re-domiciled companies would be obliged to adhere to the United Kingdom's high corporate transparency and governance standards, which would guarantee better investor protections.
The public consultation outlines proposals and seeks public input on the following:
- the advantages of enabling companies to re-domicile to the United Kingdom;
- the level of demand that exists among various types of companies and sectors;
- the appropriate checks and entry criteria;
- the merits of establishing an outward corporate re-domiciliation regime; and
- the potential tax implications associated with the introduction of a corporate re-domiciliation regime.
The public consultation document can be accessed here (as a PFD).