Corporate migration update05 May 2016
As legislative developments make it easier to move between jurisdictions, many offshore companies are choosing to redomicile in different jurisdictions for a variety of reasons, including taking advantage of different tax and regulatory regimes, to consolidate with existing group structures, or to cut down on costs and assist with the ongoing administration of the offshore company or group.
Historically, where an offshore company wished to move its corporate seat to another jurisdiction, this could only be done by way of a 'contractual' migration, which involved the establishment of a 'new' company in the new jurisdiction, which agreed to take on all the assets, contracts, liabilities and obligations of the old company, which was then dissolved. This process did not suit many clients as the transfer of assets and liabilities could be relatively cumbersome, making the exercise potentially costly, and the process could often have adverse tax implications as one corporate entity was dissolved and another incorporated.
Companies established in the jurisdictions in which Bedell Cristin operates (notably Jersey, Guernsey and BVI) can, as a matter of their domestic legislation, utilise their Companies Law to migrate (redomicile) the company from one jurisdiction to another, providing the jurisdiction into which the company is migrating permits the migration - as do Jersey, Guernsey and BVI.
Following the completion of a statutory migration, the company ceases to be a company incorporated in the 'outgoing' jurisdiction, and becomes a company incorporated under the laws of the 'incoming' jurisdiction. It is treated as the same, continuing, legal entity - with all of the same assets and liabilities, and being subject to the same legal relationships and contracts as in the 'outgoing' jurisdiction. This allows for a greater degree of continuity without the need for transferring assets and legal relationships, or novating obligations and limiting the need to involve third parties (other than, for example, a secured party).
The statutory migration of a company can therefore offer a cost effective and streamlined solution to moving a company from one jurisdiction to another.
Whilst the process differs between jurisdictions (and will differ depending on whether the company is migrating into or out of a jurisdiction) there are many similarities. The company must be solvent, must show that it has complied with the laws of its current jurisdiction and has the ability to migrate, and a review should be undertaken of the constitutional documents of the company and any contracts, such as finance documents, for any restrictions. Bedell Cristin is able to advise on, and assist in, all aspects of the migration.
The regulators in the relevant jurisdictions will require legal opinions providing confirmations about the company wishing to migrate, which Bedell Cristin are able to provide as part of the migration process.
Typically, the process and timescale for a migration will be driven by the jurisdiction to which the company is wishing to migrate to. With the right knowledge and expertise this process can be managed efficiently, and can be as short as one month.
Bedell Cristin takes responsibility for collating all information, drafting all necessary documents, approvals and application forms for submission to the relevant Companies Registry, meaning the process is expertly managed in a seamless fashion.
Given Bedell Cristin's offshore presence and extensive experience, we are increasingly being asked to advise in connection with company migrations both in and out of Jersey, Guernsey and the British Virgin Islands, and we are able to deal with multiple and large scale migrations.
For further information, please contact Tim Pearce, Alasdair Hunter or Kate Ovenden .