Numerous offshore jurisdictions have introduced legislation to allow foreign companies to change the jurisdiction of incorporation to that of their own. In addition, the legislation in most of these jurisdictions permit the transfer of a company's "seat of incorporation" out of the jurisdiction. The process by which a company moves to another jurisdiction is known as "redomiciliation" or "relocation". The alternative to redomiciliation is to liquidate the existing company and transfer the portfolio to an entity incorporated in the new jurisdiction for the purpose. This, however, in most cases is an expensive and complex procedure and may also have taxation consequences.

Background

Gibraltar effected its own redomiciliation legislation in March 1996 to enhance the opportunities for the development of international insurance business, particularly captive insurance, once the Financial Services Commission ("FSC") in Gibraltar had been approved by the UK as a competent authority for the purposes of supervising companies licensed to carry on insurance business in Gibraltar and wishing to provide insurance services to or operate from branches in European Economic Area Member States on the European Union ("EU") principle of passporting. This approval process involved a complex legislative and administrative programme, in conjunction with the Department of Trade and Industry (UK), requiring the transposition into Gibraltar law of all insurance passporting related Directives and amending insurance legislation in order to match UK standards. This led the UK Government to recently agree that Gibraltar's supervisory regime for insurance matched standards of supervision in the UK and insurance passporting was therefore authorised.

The relevant legislation is contained in the Companies (Redomiciliation) Regulations 1996 ("the Regulations").

The Regulations

Companies wishing to redomicile into Gibraltar must be domiciled in a country recognised by Gibraltar for this purpose. The Regulations allow for redomiciliation from within the EEA and countries which are members of the British Commonwealth as well as from most other offshore centres.

An application by a company to establish a domicile in Gibraltar must be made to the Registrar of Companies in Gibraltar in the form prescribed by him and must be accompanied firstly by the resolution of the company in respect of the establishment of domicile in Gibraltar and which must be approved in the manner prescribed by the constitution of that company. The resolution should contain the following information:

Furthermore, a Certificate of Good Standing is required in respect of the company issued by the competent authority or authorities, as the case may be, of the country of incorporation of the company, or other evidence to the satisfaction of the Registrar of Companies in Gibraltar that the company is in compliance with registration requirements of the authority in its country of incorporation.

Where the company carries on in or from the jurisdiction of its incorporation a business which, in accordance with an EU requirement, is licensed by a competent authority in that jurisdiction, evidence of the consent of that competent authority to the redomiciliation is also requested.

Further, evidence is needed to the satisfaction of the Registrar that no proceedings for insolvency have been commenced against the company in the jurisdiction in which it is incorporated together with the prescribed fee.

The information and evidence required above must be in the English language or if not so written must be accompanied by a certified translation thereof into the English language.

The effect of establishing a domicile in Gibraltar is, inter alia, that upon redomiciliation the company is deemed to be a body corporate registered and incorporated under the Companies Ordinance of Gibraltar and the Ordinance recognises the continuity of such legal entity with respect to the property, assets, contracts and the business of the company which continues to be vested in the company and the company, continues to be liable for all its debts, liabilities and obligations.

Due to Gibraltar's status within the European Union and offshore capabilities, the Redomiciliation Regulations offer very interesting possibilities for companies incorporated within or outside the EU who are permitted to redomicile by their country of incorporation and wish to take advantage of the low or total tax exemption imposed on Gibraltar offshore companies operating within the EU.

Nigel Feetham LLM
Barrister-at-Law

J.A. HASSAN & PARTNERS
Gibraltar
Tel: 79000
Fax: 71966
E-Mail: jahassan@gibnet.gi

For further information, please contact:

Chris Johnson ACII
Aon Insurance Managers (Gibraltar) Limited
Suite 912c
Europort
Gibraltar

Tel: + 350 48324
Fax: + 350 75655
Mobile: + 350 58452000
E-mail chris.johnson@aon.gi

Want to learn more about Gibraltar?
Visit Gibraltar's website at http://www.gibraltar.gi/

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