The Dubai Multi Commodity Centre (DMCC) free zone has recently issued guidelines permitting companies to redomicile or migrate to the DMCC from other jurisdictions provided the laws of the jurisdiction in which it is incorporated permit the transfer of the company to the DMCC.
What is Redomiciliation?
Redomiciliation is a concept whereby a company transfers its domicile to another jurisdiction while maintaining the same legal identity, its history, and without affecting its assets, obligations and liabilities. As such, the company continues to exist in the new jurisdiction, without having to undergo the liquidation process in the older jurisdiction, and is subject to the laws of the new jurisdiction. Note that redomiciliation is also referred to as ‘corporate migration’, ‘transfer of domicile’, or ‘transfer of incorporation’.
Free zones that currently permit redomiciliation in the UAE include the Dubai International Financial Centre (DIFC), Abu Dhabi Global Markets (ADGM), and the Dubai Creative Clusters (includes the Dubai Internet City, Dubai Outsource City, Dubai Media City, Dubai Studio City, Dubai Production City, Dubai Knowledge Park, Dubai International Academic City, Dubai Science Park, Dubai Industrial Park, Dubai Wholesale City, Dubai Food Park, and Dubai Design District).
Benefits of Redomiciling to the UAE
A company can transfer its domicile to the UAE to take advantage of the following key perks that UAE has to offer:
- 100% foreign ownership in the case of free zones;
- favourable tax environment;
- free repatriation of capital profits;
- state-of-the-art infrastructure;
- strategic geographical location;
- access to the MENA market as a whole.
Transfer of Domicile to the DMCC
The non-DMCC entity wishing to redomicile to the DMCC is required to submit a continuation application and will be subjected to the DMCC’s comprehensive due diligence process. As such, the supporting documents for the application is akin to that of establishing a new company in the DMCC. Under the guidelines issued by the DMCC, the non-DMCC entity would also have to comply with various conditions to redomicile to the DMCC which includes being in “good standing” in its home jurisdiction, not being subject to any ongoing investigations or sanctions in its home jurisdiction, and subjecting itself to the DMCC Company regulations.
Comment
The DMCC is an attractive free zone in Dubai owing to its reputation, location, costs, and infrastructure. Foreign companies or local companies wishing to tap into these benefits now have the option to do so without having to dissolve itself in its initial jurisdiction of incorporation.
If you have any queries related to this matter and for company set-up in the UAE, please get in touch: priyasha.corrie@fichtelegal.com
