Government Consults (Again) On New Regime For Corporate Redomiciliations Into The UK

The Government is consulting for the second time on introducing a new regime to allow companies formed outside the UK to “redomicile” by changing their place of incorporation to the UK.

The consultation follows the Government’s initial exploration of a potential new regime back in November 2021.

The Government has asked for feedback by 19 June 2026.

The key aspects of the consultation are set out below.

What is “redomiciliation”?

“Redomiciliation” can refer to a number of different processes and transitions. In the context of the Government’s proposals, it describes a procedure by which a legal entity incorporated in one jurisdiction moves its place of incorporation or registration (that is, it “redomiciles”) to a different jurisdiction. (This process is described in some countries as “migration” or “continuation”.)

Redomiciliation is already possible in many jurisdictions worldwide. However, there is currently no method for a non-UK entity to redomicile in the UK, nor for a UK entity to redomicile outside the UK, while preserving its legal personality.

(Until 31 December 2020, it had been possible for an entity governed by the law of an EEA state to redomicile in the UK under the Companies (Cross-Border Mergers) Regulations 2007. Those regulations were revoked at the end of the Brexit transition period and have not been replaced by equivalent domestic legislation.)

Instead, to move a business to the UK, it is necessary to establish a new UK entity, which then acquires the business and assets of the non-UK entity. Structurally, this is not a true redomiciliation, but rather an acquisition of a business, property, contracts and staff. This can have numerous consequences that may hinder a successful migration.

• The process can be complex and time-consuming, particularly where transferring title to assets involves specific procedural steps. It can also be difficult to transfer some assets (such as contracts and licences) without the consent of third parties.
• Because the migrating business will be run by a new legal person, it may be necessary to re-apply for approvals and authorisations from regulators.
• The transfer itself is, in essence, a sale and purchase. This can have negative tax consequences if not structured carefully and correctly.

Another way to “migrate” an entity into or out of the UK is to establish a new holding company in the destination jurisdiction. However, this is effectively a share exchange and not a true migration. The business remains with the original legal entity, which continues to be registered in the origin jurisdiction and simply becomes controlled by a new legal entity in the destination jurisdiction.

The advantage of a true redomiciliation is that it allows an entity to migrate to the destination jurisdiction while retaining its legal personality and continued existence. Because no assets, contracts or personnel need to be transferred, customer and supplier relationships can remain relatively undisturbed, the procedure can be quicker and more tax-efficient, and it may be easier (or even unnecessary) to obtain new regulatory authorisations.

As a general rule, a legal entity can redomicile from one jurisdiction to another only if both jurisdictions allow it. This is because the origin jurisdiction needs to recognise the “departure” and deregistration of the entity, and the destination jurisdiction needs to be able to accommodate the legal form of the migrating entity and ensure that no “duplicate” entity remains in the origin jurisdiction.

This is the primary reason why true redomiciliation into and out of the UK has not been possible to date: the UK has no regime permitting it.

Background to the proposals

The Government originally consulted on a corporate redomiciliation regime in November 2021. It proposed an “inward-only” regime, which would allow non-UK legal entities to redomicile in the UK but would not allow existing UK legal entities to migrate out of the UK.

You can read our separate piece for more on the Government’s original consultation on an inward-only redomiciliation regime.

Feedback on the Government’s proposals was favourable and so, in December 2023, the Government established an Expert Panel to explore options and technical details for a new regime.

The Expert Panel delivered its recommendations in October 2024, endorsing the Government’s proposals but noting that there was merit in considering a regime that permitted both inward and outward redomiciliation.

You can read our previous Corporate Law Update for more on the Expert Panel’s recommendations for a UK corporate redomiciliation regime.

The latest Government consultation follows up on the Expert Panel’s recommendations, seeking views on various technical aspects of a potential redomiciliation regime.

What is the Government proposing?

The Government has largely endorsed the Expert Panel’s recommendations. However, it has declined to pursue a two-way regime, instead retaining its original plan to create an inward-only framework under which non-UK entities would be able to redomicile in the UK, but UK entities would not be able to migrate out. (See No outward migrations below.)

An entity wishing to redomicile in the UK would need to meet certain eligibility criteria. The proposed criteria are as follows.

• Authorisation from departing country. The law of the origin jurisdiction must allow the redomiciliation and all formalities in that jurisdiction must be satisfied. These formalities might relate to overdue obligations, creditor protection and shareholder approval.
• Solvent, viable business. The entity must be solvent and intend to carry on a business following its redomiciliation. In particular, the entity must not be in or facing liquidation, administration or similar insolvency proceedings.

The entity’s officers will need to make a declaration that they know of no reason why the entity will be unable to pay its debts for a period of time following its redomiciliation, and to update that statement if this changes before redomiciliation takes effect. Criminal sanctions will apply where a confirmation is given without reasonable grounds.

• Screening tests. An entity will not be able to redomicile if any of its proposed directors, controllers or members (i.e. shareholders) are subject to asset freezes or director disqualifications.
• Corporate form. The regime would cater for a range of non-UK entities, but the entity will need to choose to become either a public company or a private company limited by shares in one of the UK’s three legal jurisdictions.
• Compliance with UK company law. Following redomiciliation, the entity will be treated in the same way as a company incorporated in the UK and so will become fully subject to UK company law. This is likely to impose a series of constraints that migrating companies will need to bear in mind before initiating the procedure (see Some things to bear in mind below).
• Deregistrations. Also following redomiciliation, the entity will need to ensure it is deregistered in its original jurisdiction. If it fails to do so within 60 days, its registration in the UK will be revoked. If the entity is already registered on the UK’s Register of Overseas Entities, it will need to apply to be removed from that register following redomiciliation.

The new regime would be administered by the UK’s central business registry, Companies House.

What is the Government not proposing?

The Government has decided not to impose certain other constraints on redomiciliation. For example, an entity would not need to meet minimum size criteria or to have been trading for a minimum period.

Similarly, it would not need to demonstrate that it has any particular economic substance (although, as we note above, the entity’s officers will need to confirm that it intends to carry on business following the redomiciliation).

The Government has dropped its proposal for a “good faith” requirement. This would have given UK authorities an effective veto over a redomiciliation if (among other things) it were not being pursued for genuine reasons, it might pose a risk to the UK’s national security or there were other public policy reasons to refuse it.

We noted at the time that government scrutiny of every individual redomiciliation seemed impractical and would require considerable resource, and that a requirement of this kind could act as a barrier to streamlined migration.

The Government has concluded that including a good faith criterion would require Companies House to “speculate on motives behind an application based on limited evidence and to make ethical judgments”, which it is neither funded nor equipped to do.

The Government also feels that reforms introduced by the Economic Crime and Corporate Transparency Act 2023, including enhanced powers for Companies House, mandatory identity verification and the requirement to confirm that an entity’s activities are lawful, adequately address concerns around national security, economic crime and public policy.

No outward migrations

As we noted above, the Government has declined to permit outward redomiciliations. This means that UK entities will not be able, in the true sense, to redomicile from the UK into another jurisdiction. (The consultation also reiterates that an entity will not be able to migrate from one UK jurisdiction to another UK jurisdiction, such as from Scotland to Northern Ireland.)

Instead, a UK entity that wishes to migrate offshore will need to undertake one of the traditional, more complex routes outlined above, such as a business transfer or a holding company interposition.

The paper states that the Government carefully considered the idea of outward redomiciliation but concluded that “the potential drawbacks outweigh the benefits”. It has decided instead to “prioritise growth” and pursue an inward-only regime.

To some extent, this is unsurprising, as the Government has consistently positioned its proposals on an inward-only basis. However, the decision not to include outward redomiciliations is significant, given that a majority of responses to the Government’s original consultation favoured including an outward regime.

We will need to see how effectively an inward-only framework works. In practice, a successful redomiciliation to the UK will require a level of buy-in from the origin jurisdiction.

Although some jurisdictions (such as Canada and Jersey) allow entities to migrate to any other jurisdictions, others (such as Bermuda and Cyprus) restrict outward redomiciliation to a specific list of countries or by requiring government approval. If the UK does not appear on that list, inward migration from such a jurisdiction may not be possible.

It is difficult at this stage to see how other countries will approach a regime that might facilitate a leakage of business entities from their economy to the UK with no reciprocal benefit.

It is worth noting that some other jurisdictions, such as Hong Kong and Singapore, have inward-only redomiciliation regimes. Whilst there have been some successful redomiciliations under these regimes, the numbers are somewhat modest. For example, the Hong Kong Companies Registry reports that, as at the end of 2025, it had received 30 redomiciliation applications out of 420 enquiries, and only six companies had in fact successful redomiciled in Hong Kong.

The UK Government is banking on what it considers the UK’s major selling points to attract inward migrations, citing a “business-friendly environment, competitive tax regime, world-leading company law framework, dynamic capital markets and large skilled workforce”. Of course, many other jurisdictions would boast the same credentials.

What are the tax implications of the proposed regime?

We await a detailed framework for the Government’s approach to tax while the overarching regime is finalised, but the Government has referred to the Expert Panel’s report as a starting point for the types of issues under consideration.

Key tax issues that may arise under a new regime include the following.

• Base cost for imported assets. When an entity migrates its tax residence to the UK, the general position under the current law is that assets come within the UK corporation tax net at historic cost. In other words, there is no step up to current market value (subject to some specific exceptions).

The Expert Panel suggested adopting a different approach for entities that redomicile to the UK, namely a default position that assets be brought in at market value for UK tax purposes. This makes sense from an economic perspective, because the jurisdiction the entity is leaving may well apply an exit charge, and so, from a UK standpoint, taxing rights should only accrue on the value of the assets from the date the entity becomes tax-resident and domiciled in the UK.

A more complex area concerns loan relationships and derivatives, given the specific rules under which UK tax treatment generally follows the accounting treatment (UK GAAP or IFRS). When an entity migrates its tax residence to the UK, these assets and liabilities are brought in at their accounting value (i.e. the carrying values as recorded in the financial statements of the entity).

However, the Expert Panel suggested that for redomiciliation purposes, it would be more consistent to adopt the approach taken with other assets and bring them in at market value. The Expert Panel acknowledged that this may not be straightforward, but it favoured a consistent rule across all asset classes. In practice, this distinction will make a difference only where accounting value and market value have diverged (such as where a company is carrying financial investments at historic or amortised cost, rather than fair value).

• Losses. In its initial consultation, the Government raised a concern relating to the potential for a company anticipating future losses to redomicile to the UK and surrender losses to profitable companies in its UK group. Notwithstanding existing anti-avoidance legislation, the Expert Panel proposed a surrender restriction period following re-domiciliation to help manage concerns around abusive behaviour. It is not clear if this will be taken forward, but we anticipate the Government will explore this further in a more detailed tax consultation.
• Tax residence. Under UK law, an entity is treated as resident in the UK for tax purposes if it is incorporated in the UK or its central management and control is in the UK (although this may be modified by a double-tax treaty (DTT)). The proposals anticipate that an entity that redomiciles to the UK will be treated as a company incorporated in the UK, and so it should be considered UK tax resident subject to DTT tie-breaker provisions. This approach is consistent with the treatment of UK-incorporated companies that are managed and controlled in a different jurisdiction.
• QAHC regime. The Government has emphasised that the proposed redomiciliation regime is designed to complement the qualifying asset holding companies (QAHC) regime. The QAHC regime was introduced in April 2022 to enhance the UK's attractiveness to investment managers by providing a more tax-efficient holding company structure for investment funds. Enabling existing non-UK asset holding entities to redomicile to the UK supports the Government's broader objective of attracting businesses from strategic sectors. Once redomiciled, these entities may elect for QAHC status, allowing them to consolidate management, holding activities, and taxation within a single jurisdiction.

Some things to bear in mind

A key consequence of an entity redomiciling as a UK company is that it will need to comply with UK company law from the point of redomiciliation and on an ongoing basis. This entails several requirements that may not currently apply to the entity.

• Natural person directors. A UK company must have at least one director who is a natural person. Although this is an increasingly common requirement across jurisdictions, it is not universal. An entity that has only corporate directors will need to appoint at least one individual.
• Underage directors. Although much less likely to be a barrier in practice, it is worth noting that an individual must be at least 16 years old to act as a director of a UK company. In the unlikely event a redomiciling entity has any directors below this age, it will need to remove them.
• Corporate directors. Although UK law currently permits companies to have corporate directors, Parliament has legislated to prohibit this, and the Government intends to bring this restriction into force soon. A UK company will continue to be able to have a corporate director, but only if that director is itself a UK company. Redomiciling entities will therefore need to remove any non-UK corporate directors from their board.
• Disqualified directors. Certain individuals are disqualified from acting as a director of a UK company. The grounds for disqualification in the UK are very broad and may extend beyond those in other jurisdictions. Redomiciling entities will need to check this.
• Identity verification. UK law requires all individual directors of a UK company to complete identity verification. It is illegal for an individual to act as a director of a UK company while unverified. Redomiciling entities will need to ensure that all individuals who will be directors when the redomiciliation takes effect have been verified. Verification can be straightforward or cumbersome, depending on the documents an individual is able to provide.
• Shareholders. UK companies must disclose a list of their shareholders, which will be available to the public at no cost. The Government does not intend to require a redomiciling entity to do this at the point of redomiciliation, but it may need to do so when it files its first annual confirmation statement. The entity will also need to keep a register of members, which any member of the public can access for a proper purpose (and a modest fee). A redomiciling entity in a jurisdiction in which shareholder information is not freely and publicly available will need to bear this in mind.
• Controllers. UK companies must disclose details of their controllers and beneficial owners. Unlike in some jurisdictions, this information is publicly available at no cost, and there is no need to apply for access or to demonstrate any legitimate interest in the information. This may be a paradigm shift for some businesses that are accustomed to less public disclosure.
• Constitutional documents. The constitutional documents of a UK company (i.e. its memorandum and articles of association and certain shareholder decisions) are available to the public at no cost, which may not be the case in other jurisdictions. (Shareholders’ agreements, however, do not normally need to be made public.)
• Bearer shares. Certain jurisdictions still permit entities to issue “bearer shares”. These bestow legal title to the shares on the person who physically holds the bearer certificate, whether or not their name appears on a shareholder register. Bearer shares are illegal in the UK. An entity that has bearer shares in issue will need to cancel them and replace them with registered shares.
• Financial statements. UK companies are required to prepare annual accounts and publish them at Companies House. The level of detail varies significantly depending on the size of the company and whether it is a member of a group. Accounts must adopt either UK GAAP or IFRS. Redomiciling entities in jurisdictions with more relaxed financial reporting regimes will need to take advice on the extent of accounting requirements that will apply from redomiciliation. Those that do not currently report under IFRS will need to be ready to transition to IFRS or UK GAAP.
• Narrative reporting. Alongside financial reporting, UK law imposes a wide range of non-financial reporting requirements. Again, these apply to differing extents based on company size, but they can include disclosures on areas such as strategy and principal risks, director remuneration, directors’ duties, gender pay gap, climate-related risks, carbon emissions and energy usage, invoice payment performance and, for very large and publicly traded companies, corporate governance arrangements. Many redomiciling companies may not be used to this level of disclosure and will need to ensure they are able to adapt to it.
• Audit. Larger UK companies are required to retain an independent auditor, who will review the company’s financial statements and issue an opinion. Not all countries require this. An entity in such a jurisdiction will need to understand the cost and process involved with this.
• Profit distributions. UK companies are subject to detailed requirements when paying dividends. These include ensuring that payments are justified by appropriate accounts and made only out of distributable profits. There is no ability to pay dividends based solely on a statement of solvency, and general commercial companies in the UK cannot create separate “cells” or “series” to isolate individual profit streams. Redomiciling entities will need to consider these restrictions on returning value to shareholders before initiating a migration.
• Choice of jurisdiction. The UK contains three jurisdictions (England and Wales, Scotland, and Northern Ireland). Redomiciling entities will need to choose which jurisdiction to migrate to. Although company law is extensively harmonised across the UK, there will be considerations specific to individual jurisdictions, particularly in relation to tax and insolvency.
• Remorse. As we note above, the Government does not intend to allow companies to redomicile out of the UK. Although this could change in the future, an entity redomiciling into the UK should assume that it will not be able to migrate out again in the same way. Its management and shareholders should therefore be confident that migration to the UK is a beneficial and final goal.

Going forward

Notwithstanding reservations and constraints, the prospect of finally gaining a corporate redomiciliation regime for the UK is exciting. The absence of such a regime is notable, and there have long been calls to introduce one.

If positioned correctly, a new redomiciliation regime could unlock routes to the UK for many businesses that have no appetite for more complex corporate restructurings.

The Government’s proposals will require primary legislation by Parliament. We await its next steps and will be carefully scrutinising the draft legislation when it appears.

Read the Government’s consultation on the design of a framework for corporate redomiciliations into the UK (opens PDF)

Read the Government’s analytical paper on a proposed UK corporate redomiciliation framework (opens PDF)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.