Publication
Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
United Kingdom | Publication | 10月 2024
On 14 October 2024 an independent expert panel (Panel) published its report (Report) setting out detailed proposals for a UK corporate re-domiciliation regime. This follows on from broadly supportive responses to an earlier government consultation on the topic.
The Report considers how various components of a new regime could work, including which entities would be eligible to re-domicile, the information and procedural requirements that would apply, and how an entity that has re-domiciled into the UK would be treated for company law and other purposes. In addition to company law, it also discusses changes that may be required for accounting purposes and distributions and to tax legislation, the insolvency regime and creditor protection, as well as additional powers that would be needed for the Registrar of Companies.
Norton Rose Fulbright corporate partner Jon Perry, who was a member of the Panel, commented “It has been fascinating to be part of this multi-disciplinary Panel and to help formulate a proposal which deals with the range of technical questions which re-domiciliation raises. The ability to re-domicile is a popular feature in the company law regimes of a number of jurisdictions and incorporating this facility into UK company law should help to improve the UK’s competitiveness as a jurisdiction of choice.”
No – the Panel strongly supports the introduction of a regime which allows companies flexibility to re-domicile both into and out of the UK and believes this will increase the UK’s attractiveness as a destination of choice.
The Panel believes inbound re-domiciliation should be available to bodies corporate registered outside the UK provided they are solvent and intend to carry on business following their re-domiciliation. So long as they meet the relevant requirements, they should have flexibility as to whether they become a private or public UK company. The Report also proposes that applicants should have flexibility to make changes to their form, constitution and other features as part of the application for re-domiciliation.
The principles underpinning the Report’s proposals are (so far as possible) those that apply where a company is being incorporated in the UK for the first time. This approach is intended to ensure that there is comparable information available to the public and that the entity which is re-domiciling will meet substantially the same requirements as if it had originally been UK incorporated.
Following re-domiciliation, the Panel suggests that (again, so far as possible) the company should be treated in the same way as if it had originally been incorporated in the UK. That said, it is recognised there will be some differences in the way certain requirements apply to a re-domiciled company. As such, the Report recommends that such companies should be distinguished from companies originally incorporated in the UK so that persons transacting with them are put on notice.
The Panel believes that the regime for re-domiciling needs to be as clear and simple as possible in order to be attractive. Among other things the Report suggests an approach which:
For an entity re-domiciling into the UK, the Panel believes that protection of stakeholders (members, creditors etc.) in its existing jurisdiction is properly a matter for the law of that jurisdiction. Protections for UK stakeholders will come from the information provided in the application for re-domiciliation and, once the overseas entity becomes a UK company, from the protections offered by UK company law.
For a company re-domiciling out of the UK, the Report suggests the protections that should be available to:
It also proposes additional requirements for certain information relating to the company to remain available in the UK for a period following re-domiciliation.
The Report recommends further consultation by the government once it has decided on its proposals.
It notes that Companies House will need to be closely involved with the design of the regime - including (in particular) the process for determining the date on which a re-domiciliation occurs - and recognises that other regulators (including the Takeover Panel, the FCA, the PRA and the Pensions Regulator) will need to consider whether changes would be required to their rules to accommodate any new regime.
Given their complexity, the Panel also suggests that further consultation is carried out on the accounting and audit-related aspects of the regime.
As such, there are a number of further steps (including legislative change) to be completed before any new regime can be put in place – however, the publication of the Report represents an important stage in this process.
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Publication
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Publication
Our Asia Competition Law facts sheets provide insights into the main competition law regimes across Asia, reflecting the experience and reach of our Asia competition team in an ever changing and increasingly complex competition law environment.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2023