Taking flight – the company migration

This article originally appeared in Issue 34 of En Voyage

 

You may have heard of company migrations (or redomiciliations as they are also known) and wondered what they are.

The short answer is that a migration is a process by which a company changes its jurisdiction of registration – it metaphorically packs its bags, jumps on the plane and goes to reside in another jurisdiction permanently!

In recent months we have seen an increase in the number of overseas companies migrating into Guernsey which is great business for the island, with corporate services providers, accountants, auditors, insurance professionals, lawyers and others all benefitting from the work the company arriving on our shores brings.

You may ask though, why would a company want to move?  Well, there are many reasons for that, including expertise of service providers and professionals, reduced costs, group consolidations, or relocating the company to more favourable legal or regulatory regime.

As you might expect, migrating a company into Guernsey will require compliance with the legal requirements in the country it is leaving and  further compliance with the Guernsey legal requirements, as detailed in the Companies (Guernsey) Law, 2008 (as amended) (Guernsey Companies Law) which will involve preparing various documents and making a formal application to the Guernsey Registry.

Migration of an overseas company to Guernsey

An overseas company may apply to be registered as a Guernsey company provided that, among other things:

  • the law of the overseas jurisdiction allows it to be registered as a Guernsey company;
  • it has complied with the requirements of the foreign law in relation to its registration as a Guernsey company;
  • its shareholders have consented to the migration;
  • it is not in liquidation and will, immediately upon registration, pass the statutory ‘solvency test’ under the Guernsey Companies Law; and
  • if it is a ‘supervised company’ (that is, it will be regulated by the Guernsey Financial Services Commission), the GFSC has consented to the registration.

Effect of migration

It is important to note that, under the Guernsey Companies Law, the migration of a company will not create a new legal entity, nor does it prejudice the company’s identity or continuity.

Upon registration as a Guernsey company:

  • all property and rights to which the company was entitled immediately before the migration, remain its property and rights;
  • it remains subject to all criminal and civil liabilities and all contracts, debts and other obligations to which it was subject immediately before the migration;
  • all actions and other legal proceedings which immediately before the migration could have been made by or against the company may still be instituted or continued by or against it; and
  • a conviction, ruling, order or judgment in favour of or against the company before the migration may be enforced by or against it after the migration.

Migration of a company from Guernsey to overseas

It is also important to note that Guernsey companies may of course wish to migrate out of Guernsey and relocate to an overseas jurisdiction.  In order to do so, again there will be a number of formalities to be complied with both from a Guernsey perspective and also from the perspective of the overseas jurisdiction.

 

 

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