Company Redomiciliation

Incorporation of a foreign company established abroad

Company Law - two theories: seat of incorporation vs. seat of establishment

To become an entity duly incorporated under Luxembourg law, a foreign company established abroad may elect to transfer its registered office and redomicile to Luxembourg. There are two main incorporation regimes: seat of incorporation and seat of establishment.

For seat of incorporation countries, the registration into a company register is the main element to determine the nationality of a company, while for seat of establishment the most important factor is the place where the company has its principal premises; its head office, the place from where is it managed. For the latter, the transfer of head office and adoption of a new nationality can be achieved by a simple transfer of the place where the company is managed and controlled.

"Seat of incorporation" countries are: United Kingdom, Denmark, Hungary, etc.
"Seat of establishment" countries are: Luxembourg, Belgium, France, Italy, etc.

Important Note: While some countries have a traditional incorporation of seat regime, they also allow redomiciliation in their company law; for example, Cyprus and Malta.

Company Redomiciliation

Transferring a company established in Cyprus to Luxembourg

Impact and Fiscal Law of a redomiciliation of company

When a foreign company transfers its registered office or seats its main place of management in Luxembourg, it will sever any links with its country of first incorporation unless it keeps a permanent establishment there. The company will not be taxable in the first country, but will become taxable on its worldwide income in Luxembourg. It will be considered as resident for tax purposes and taxable at the applicable corporation tax rates - unless its shareholders elect a tax regime in Luxembourg which grants a specific tax exemption such as:

SOPARFI (Holding Company)
SPF (Private Wealth Management Company)

The newly incorporated company may also enjoy the benefit of the generous double tax treaty network that Luxembourg has signed with other countries.

It may also benefit from EU directives such as:

Parent Subsidiary Directive: subject to conditions, the participation exemption - absence of withholding taxes on dividends received from other companies established in other EU countries.

Interests Royalties Directive: subject to conditions, exemption of withholding taxes on interests or royalties received from companies established in the EU.

Merger-Acquisition Directive: subject to conditions, the shareholders can enjoy the delay of taxation on capital gains derived from contribution in kind (or exchange of shares upon contribution in kind) to a company, or exemption of capital gain when contributing by shares to a holding company such as a SOPARFI (Exemption of capital duty when contribution in kind is made on participations at the set-up of a SOPARFI.)

The Luxembourg law grants exemptions such as:

Luxembourg tax exemption of 80% granted to Intellectual Property Rights companies
Luxembourg tax exemption of 100% - subject to conditions - of incoming dividends, exemption of capital gain on participations, exemption of real estate incomes for estates established in a foreign DTT country, exemption of withholding tax on certain income paid, such as royalties, dividends, or interest.

However, when a registered office is transferred certain considerations should be made as follows:

The legal personality of the company will be governed by local Luxembourg law and regulations (departure)
When the registered office is transferred abroad there may be some taxation of latent capital gains
Whether conservation of a permanent establishment in the country of origin is required
The transfer could be considered to be the winding up of the company
Indirect taxes may be due on value of the company assets (VAT, Registration duties, Capital duty)

The transfer of seat from Luxembourg to a foreign country

Corporate Structure

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Incorporation of a foreign company established abroad

Company Law - two theories: seat of incorporation vs. seat of establishment

Transferring a company established in Cyprus to Luxembourg

Impact and Fiscal Law of a redomiciliation of company

The transfer of seat from Luxembourg to a foreign country

Corporate Structure

Capital Raising Solutions

Hybrid Instrument

Corporate Actions & Activities

Intellectual Property Management

Double Tax Treaties

Corporate Services

Accounting, Legal, Corporate and Tax Advisory

Payroll Services

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Interested in Company Redomiciliation? Talk to one of our Experts today

Incorporation of a foreign company established abroad

Company Law - two theories: seat of incorporation vs. seat of establishment

Transferring a company established in Cyprus to Luxembourg

Impact and Fiscal Law of a redomiciliation of company

The transfer of seat from Luxembourg to a foreign country

Corporate Structure

Capital Raising Solutions

Hybrid Instrument

Corporate Actions & Activities

Intellectual Property Management

Double Tax Treaties

Corporate Services

Accounting, Legal, Corporate and Tax Advisory

Payroll Services

Contact Us

Step 1.

Is your request about one of the following services:

Step 2.

Step 3.

Size of the SPV / investment

Size of the Fund / SPV

Size of the SPV / issuance

Size of the SPV

Step 4.

Investor(s)

Step 5.

Submit your details

Interested in Company Redomiciliation?
Talk to one of our Experts today