107: Foreign companies: a chance to move to the UK
Foreign registered companies are likely soon to be offered a pathway for relocating to the UK.
The UK Government’s consultation on the proposed ‘re-domiciling’ regime was concluded on 7 January. In it the Government sought views on the introduction of a regime which would offer a streamlined process for foreign registered companies to change their registration status to the UK.
Currently, if a non-UK company needs to change its place of incorporation to the UK a new UK company needs to be created which then acquires the assets of the non-UK entity. This is in essence an asset sale, rather than a true migration. The process can give rise to practical difficulties in relation to the transfer of assets and contracts, as well as potential tax issues.
The new regime is likely to be attractive to foreign companies with significant UK business, who are already in the UK’s tax regime. Redomiciling to the UK could in many cases simplify the tax regime applying to such companies, and enable them to avoid the increasingly complicated and expensive compliance of offshore jurisdictions such as economic substance filing.
The proposals, if implemented, will bring the UK in line with around 50 other jurisdictions, including Canada, New Zealand, Australia, Singapore and a number of US states. The Government believes it should increase the competitiveness of the UK, strengthen its position as a global business hub and offer companies the chance to take advantage of the UK’s ‘world-class infrastructure and skills, while promoting jobs, innovation and investment in the UK’.