The Department for Business and Trade has published a consultation proposing a corporate redomiciliation regime that would, for the first time, allow a foreign company to transfer its place of incorporation to the UK while retaining its existing legal identity. Corporate history, contracts, assets, liabilities and pending proceedings all carry over. No dissolution, no new entity, no novation exercise.
The UK currently has no such mechanism. A foreign company wishing to become UK-incorporated must establish a new entity, transfer assets and contracts across, and wind up the original vehicle. The proposed regime would replace that with a single application to Companies House. For corporate practitioners, it creates a new category of inbound transaction that sits outside every restructuring tool currently available.
How the regime would work
The regime requires primary legislation and is unlikely to be operational before 2027 or 2028; it may also require rule changes by the Financial Conduct Authority, Prudential Regulation Authority, the Takeover Panel and the Pensions Regulator. Applications would be made to Companies House. Any solvent body corporate incorporated outside the UK may apply, provided its home jurisdiction permits outward redomiciliation. There are no minimum size requirements, no economic substance tests, and no restrictions by country of origin.
The process broadly mirrors UK incorporation, with additional requirements: a director solvency statement analogous to that given on a capital reduction; disclosure of outstanding charges, material court orders and share capital; and confirmation that no proposed director, person with significant control or member is subject to asset-freezing or disqualification sanctions. Once approved, a certificate of redomiciliation is issued. The company then has 60 days to provide Companies House with evidence of deregistration in its original jurisdiction; failure to do so risks the UK registration being revoked.
Inward-only design
The regime will be one-directional. Foreign companies may redomicile to the UK; UK companies may not use it to leave. This runs counter to the recommendation of the Independent Expert Panel appointed to design the framework and the majority view in the government’s 2021 call for evidence.
The practical consequence is clear: a UK redomiciliation is permanent in all but name. There is no reciprocal outward mechanism and reversing the decision would require a full conventional restructuring. Clients need to understand this before they commit and advice should be given accordingly.
Stakeholder protection
The consultation is underdeveloped on stakeholder protection. When a company redomiciles, the governing law changes, with direct implications for insolvency proceedings, directors’ duties to creditors in financial distress and the priority of creditor claims. The solvency statement provides a snapshot at the point of application; it is not a structural safeguard going forward. Some jurisdictions operating more established redomiciliation regimes include creditor objection windows or court supervision. The UK proposals contain neither and whether parliament will need to go further before the legislation is robust remains an open question.
Minority shareholders raise a related concern. Where a home jurisdiction requires member approval for an outward redomiciliation, dissenting minorities may find themselves subject to a UK corporate law framework they did not choose. The unfair prejudice jurisdiction under section 994 of the Companies Act 2006 will apply once the company is UK-incorporated, but whether it can be engaged in respect of the redomiciliation decision itself is untested.
Tax: a significant gap
Tax falls outside the consultation. The government will consult on tax legislation separately once the legal framework is finalised; it has published no draft provisions and committed to no go-live date. What the consultation does is invite views on considerations set out in the Independent Expert Panel’s October 2024 report: the date on which a redomiciled company becomes UK tax resident; how to treat assets brought within the UK corporation tax net (the panel proposed default market value rebasing); the treatment of pre-redomiciliation losses (the panel recommended these not be relievable against UK profits); and the stamp duty reserve tax position for companies listed via depositary interests. These are proposals under consideration, not settled features of the regime, and practitioners should be explicit with clients on that distinction. No commitment to proceed should be made until the tax legislation is settled and assessed.
Governance readiness from day one
From the date the certificate is issued, the company is fully subject to the Companies Act 2006. That includes the requirement for at least one natural person as director; forthcoming restrictions on corporate directors under the Economic Crime and Corporate Transparency Act 2023; mandatory identity verification through Companies House; and full public filing obligations. These apply immediately. Governance structures, PSC (people with significant control) registers and board authorities must be compliant before the certificate is issued, not after. This pre-completion workstream is not peripheral to a redomiciliation transaction; it is central to it.
Stakeholder engagement cited in the government’s accompanying analytical paper suggests cost savings of 50-90% against conventional restructuring processes, though the government notes that these figures are uncertain and unmodelled.
The direction of travel is right, but the inward-only structure limits flexibility, the creditor and minority protection framework needs further development, and without settled tax legislation, neither practitioners nor clients can complete a full assessment. Practitioners should map the regime’s relevance to their clients’ structures and be precise about what remains unresolved.
Yulia Barnes is managing partner at Barnes Law, London
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