The Process of Re-Domiciliation of Companies
In order to comprehend the notion of re-domiciliation, one must first understand what constitutes a domicile. According to Maltese law, a company established in Malta is considered domiciled and de facto resident in Malta. The domicile of a company has a wide range of implications varying from determining the authority responsible to oversee the company to the applicable law in case of conflict of law matters.
The authority responsible for re-domiciliation whether to, or out of Malta, is the Malta Business Registry (hereinafter the ‘MBR’). The MBR is the body responsible for registration of companies and all aspects ancillary thereto.
For re-domiciliation to take effect, the requirements set out in the Continuation of Companies Regulations (Subsidiary Legislation 386.05 - hereinafter the ‘Regulations’) must be adhered to. These Regulations set out what is required in the event of a company incorporated in Malta intends to re-domicile into a third country, or for a company incorporated elsewhere to be re-domiciled in Malta. Through the process of re-domiciliation, companies can continue to be registered in Malta or continue to be registered in a third country with the need to be wound up.
Companies re-domiciling to Malta
For these companies, it is necessary that the jurisdiction in which the company is established is an approved jurisdiction. As per the Regulations, an approved jurisdiction is one which the MBR permits a transfer from in accordance with its issued guidelines. Furthermore, this endeavour must be permitted by the laws of the country of origin, and the constitutive documentation of the company being re-domiciled. The company, after completing the requirements within its country of origin, must proceed with submitting the required documentation to the MBR including an extraordinary resolution of the shareholders approving that the company shall proceed with the process of re-domiciliation to Malta, the revised constitutive documentation which must be drafted in line with Malta’s applicable company laws, and other documentation which shall include an indication of the officers to be appointed after the company would have continued to be a company registered in Malta and also a solvency declaration made by the directors.
After the successful submission of the all the required documentation, a Provisional Certificate of Continuation will be issued in favour of the company. Within six months of the issuance of the Provisional Certificate of Continuation, the company being re-domiciled must provide evidence that it obtained confirmation, from the authorities in the company’s jurisdiction of origin, that such company is no longer registered as a company in that other jurisdiction. Failure to submit such evidence within six months grants the Registrar of Companies in Malta the discretion to strike off that company from the register. Upon successful submission however, the final Certificate of Continuation is issued and the re-domiciliation process would be complete.
It must be noted that there may also be further requirements established by the registry of companies in the country of origin that must also be adhered to throughout the process.
Companies re-domiciling out of Malta
For companies re-domiciling outside of Malta, it is in the interest of stakeholders that prior to commencing the process, it is confirmed that the jurisdiction, in which the company shall be re-domiciled, deem Malta to be an ‘approved jurisdiction’ and therefore, accept that companies registered in Malta are continued in their jurisdiction following a re-domiciliation process.
The company must firstly request to the Maltese Registrar of Companies that it may proceed with re-domiciliation, for which the Registrar shall require an extraordinary resolution of shareholders authorising the re-domiciliation and directors’ declarations confirming certain pertinent information inter alia. Furthermore, an administrative fee shall be incurred for this process to take place.
After the lapse of three months from the publication of the extraordinary resolution of the shareholders, which gives sufficient time for creditors and interested parties to object to such re-domiciliation, and upon receipt of the instrument of continuation by the competent authority in the country of continuation, the Registrar may issue its consent to the re-domiciliation. The Registrar shall then confirm that the company has ceased to be incorporated in Malta and its name shall be struck off from the Registry’s online database.
BDO’s team of professionals can assist you in drafting and submitting the necessary documentation whilst adhering to time limits set and collaborating with foreign counsel to ensure compliance with requirements of the foreign jurisdictions.
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