Redomiciliation is the process of transferring a company’s legal address from one jurisdiction to another while maintaining its legal status and without interrupting its operations. This strategic step can help entrepreneurs optimize tax burdens, improve business environments, or gain access to larger markets. It can also be a solution for businesses registered in countries under sanctions, where financial operations through international payment systems and services are restricted.

What is the Purpose of Redomiciliation?

Redomiciliation allows a company to change its registration jurisdiction without the need to liquidate and establish a new legal entity. This means the business retains all its assets, rights, and obligations, and there’s no need to halt operations, avoiding financial losses.

Key Objectives of Redomiciliation:

  • Tax Optimization. Moving to a country with a more favorable tax regime.
  • Access to New Markets. Expanding into regions with more developed financial systems or business-friendly environments.
  • Improved Legal Environment. Relocating to a jurisdiction with stable and predictable legal frameworks.
  • Reduced Regulatory Requirements. Transferring assets to a country with less stringent regulatory demands.

Steps in the Redomiciliation Process

The procedure and timeline for redomiciliation vary depending on the countries and their legal systems. Typically, entrepreneurs follow these steps:

  • Evaluate Goals and Opportunities. Assess the reasons for redomiciliation and select the most suitable jurisdiction for relocation.
  • Legal Preparation. Study local laws and requirements for transferring the business. Determine if the redomiciliation conditions align with the rules of both jurisdictions.
  • Decision-Making. Obtain approval from shareholders and other stakeholders. This may involve holding a shareholder meeting to secure their consent.
  • Document Preparation. Gather all required documents, such as corporate charters, reports, and other legal paperwork.
  • Registration in the New Jurisdiction. Submit applications and documents to the authorities in the new jurisdiction.
  • Closing the Old Registration. Complete all formalities to terminate the registration in the previous jurisdiction.
  • Risks of Redomiciliation. While redomiciliation offers new opportunities, it also comes with risks.

Primary Risks:

  • Legal Risks. Ensuring compliance with the laws of both jurisdictions. Errors in documentation or failure to meet requirements could lead to legal issues.
  • Tax Risks. Potential changes in the tax regime or additional tax obligations due to relocation.
  • Regulatory Risks. Challenges associated with adapting to new reporting and regulatory standards.
  • Cultural and Organizational Risks. Difficulties in adapting to different cultural and business practices.
  • Financial Risks. Costs associated with the redomiciliation process, including legal and consulting fees.

Redomiciliation Case Studies

Relocating jurisdictions to improve business conditions is a common practice among global companies, with hundreds of successful examples.

Example: Aon PLC

In 2020, international insurance and consulting company Aon PLC moved its registration from the UK to Ireland. This decision was part of a strategic plan to optimize tax obligations and enhance its corporate structure.

Reasons:

  • Tax Optimization. Ireland offers more favorable tax conditions compared to the UK, significantly reducing overall tax expenses.
  • Corporate Structure. The move allowed Aon PLC to manage its global network more effectively and integrate operations within a more flexible tax framework.

Process:

  • Aon PLC conducted a thorough analysis and preparation to ensure compliance with the legal and regulatory requirements of both countries.
  • A dedicated team prepared the necessary documentation and completed registration in the new jurisdiction.

Outcome:

  • Financial Savings. Significant reduction in tax expenses.
  • Improved Corporate Flexibility. Enhanced management and operational processes at the international level.

Other successful redomiciliation examples include Apple Inc., Burger King, Pfizer Inc., and numerous other renowned companies whose services and products have thrived globally for decades.

Assistance with Redomiciliation

Redomiciliation is a complex but strategically important step that can significantly improve a business’s position. However, it requires careful planning and analysis of all risks and opportunities to ensure the successful completion of every stage. Drawing on the experiences of other businesses and enlisting qualified specialists can help minimize risks and maximize the benefits of redomiciliation. By partnering with us, you can access expert consultations and professional assistance for redomiciling assets to Poland or other jurisdictions.