“Migration” or “re-domiciliation” is when an incorporated entity moves to a different jurisdiction while continuing to preserve its legal identity.
Abu Dhabi Global Market (ADGM) allows entities to be relocate from other jurisdictions, provided that the original jurisdiction permits migration.
Benefits of migrating to the ADGM
- Common law jurisdiction
- Zero corporate tax
- No restriction on repatriation of profits
- 100% foreign ownership
- All services available in-house
- Extensive range of professional services providers in Abu Dhabi
- Variety of legal structures available
- Access to growing number of Double Tax Treaties (90 in force, further 39 in progress)
- Continuity in life of entity without the need to liquidate the existing entity and register a new one
- Continue with the same name, shareholders, directors, etc.
- Continue the existing contractual relationships
Eligibility criteria for migration to the ADGM
A company incorporated in a jurisdiction outside the ADGM may apply to the ADGM Registrar for re-domiciliation if it fulfils the eligibility criteria set out in the ADGM Companies Regulations 2020 (Regulations).
The application must include the following:
- A certified copy of the articles or similar document defining the constitution of the company
- Articles of continuance
- A statement of solvency
- The name under which it is proposed to continue the company
- That director and secretary of the company at the date of application will retain their role upon its continuance
- Any other information/documents that the registrar requires
Restrictions from applying for continuance
Certain restrictions can halt migration. These are where the company:
- Is being liquidated or is insolvent.
- Has entered into a compromise with a creditor
- Has an application pending before a court for any matter
- Pre-existing creditors’ obligations and legal proceedings
The company must bear in mind that migration does not relieve them of the existing obligations to creditors and any ongoing legal proceedings. The regulations contain certain limitations and conditions on a company’s ability for continuance into the ADGM, such as:
The Regulations provide that any company applying for continuance into the ADGM must provide satisfactory evidence to the Registrar, that the interests of the members and creditors of the company will not be unfairly prejudiced.
The Regulations outline the effect of a certificate of continuance on a company considering:
i. The company is registered under the Regulations
ii. The articles of the company must be amended in accordance with the regulations of the continued jurisdiction
iii. The company will remain entitled to the existing assets it holds
iv. The company will be subject to all criminal and civil liabilities, and all contracts, debts, and other obligations, to which it was subject immediately prior to the continuance; and
v. The company will remain subject to all actions and other legal proceedings prior to the continuance
After undergoing the process of re-domiciliation, whilst the entity ceases to exist in the first jurisdiction and gets registered in the second jurisdiction, it is said to have continuity of existence and will be said to have a registration date of the first jurisdiction.
How CBD Formations can assist
Should you be interested in seeking assistance with re-domiciliation of an entity from another jurisdiction to ADGM in accordance with international best practice, please write to us at formations@cbdcorporateservices.com or call +971 (0) 4551 0677.
