Re-domiciliation, also known as corporate migration or transfer of incorporation, is an increasingly popular strategic process that allows companies to shift their seat of incorporation from one jurisdiction to another. This maneuver offers a seamless transition, and the United Arab Emirates (UAE) has emerged as a premier destination for such transitions. The UAE’s numerous free zones and well-established legal frameworks make it an attractive locale for re-domiciliation.

Diverse Motivations for Re-Domiciliation

 Companies pursue re-domiciliation for various reasons, including commercial, practical, taxation, and legal considerations.

Key considerations include:

Importantly, re-domiciliation does not disrupt a company's operations or affect the validity of its existing agreements, ensuring business continuity during the transition.

The UAE’s Appeal for Re-Domiciliation

 The UAE offers a range of compelling advantages for companies considering re-domiciliation, making it a highly attractive destination for corporate migration. By re-registering as a UAE entity, companies can ensure a smooth and uninterrupted continuation of their existing rights and obligations, safeguarding their operational integrity and business continuity.

The UAE’s business-friendly environment is characterized by its tax-efficient framework, which includes low corporate tax rates and numerous incentives that can significantly reduce operational costs. Additionally, the UAE boasts an extensive network of double tax treaties with numerous countries, which helps prevent double taxation and provides further financial benefits, making it an economically advantageous location for international business.

Beyond the financial incentives, re-domiciling to the UAE positions a company strategically within a dynamic and rapidly growing market. The UAE serves as a regional hub with unparalleled access to emerging markets across the Middle East, North Africa, and South Asia. This strategic location not only enhances the company’s regional influence but also demonstrates its commitment to leveraging the UAE’s robust economic opportunities and fostering growth in the broader Middle Eastern market.

Moreover, the UAE’s regulatory environment is designed to support and encourage foreign investment, offering various free zones with specialized facilities and services tailored to diverse industry needs. This supportive infrastructure, combined with the UAE’s stable political and economic climate, makes it an ideal environment for companies seeking to enhance their global footprint while capitalizing on the region’s growth potential.

Criteria for Re-Domiciliation Eligibility

 Companies must verify their eligibility before re-domiciliation to the UAE free zones such as the Dubai International Financial Centre (DIFC) or the Abu Dhabi Global Market (ADGM). Essential criteria include compliance with the specific regulations outlined in Article 8 and subsequent articles of the DIFC Companies Regulations and Section 100 and subsequent sections of the ADGM Companies Regulations. This includes meeting legal requirements related to corporate governance, and regulatory compliance to ensure a smooth and successful transition to these jurisdictions.

Essential criteria include:

Navigating the Re-Domiciliation Process in the UAE

 Given its relatively novel status in the UAE, businesses contemplating re-domiciliation must fully understand eligibility requirements and procedural nuances.

Engaging with legal and tax professionals familiar with both the original and UAE jurisdictions is crucial.

 Re-domiciliation involves a complex process distinct from establishing foreign branches or subsidiaries.

Key considerations include:

Conclusion

 Re-domiciliation presents a powerful strategic tool for companies, offering the advantage of retaining their legal identity while adapting to new regulatory and tax environments. With its diverse options and substantial potential, the UAE stands out as an appealing destination for re-domiciliation. However, businesses must approach the process with diligence, conducting thorough due diligence and seeking expert guidance to ensure a smooth and successful transition.

Author:   Ziad  Chebli Partner – Corporate Department , Hamdan AlShamsi Lawyers & Legal Consultants