Redomiciliation of Companies
INTRODUCTION
Redomiciliation is the process by which a transfer of a company’s seat of incorporation into or out of a jurisdiction takes place. In Malta the legislative framework that regulates both the inward and outward continuation of foreign and local companies is the Continuation of Companies Regulations, 2002 (Legal Notice 344 of 2002). The purpose of this note is to give a concise overview of the procedure required for a foreign body corporate to continue in Malta.
REQUIREMENTS
The continuation procedure is a straightforward procedure. However the body corporate which is to be continued in Malta must satisfy certain requirements.
1st requirement : The body corporate requesting to be redomiciled to Malta must be similar in nature to a company as known in Malta. This basically means that the body corporate must have legal personality separate from that of its members and there must be the limited liability of the members.
2nd requirement : The body corporate seeking redomiciliation to Malta must be registered or incorporated in one of the approved jurisdictions issued by the Registrar of Companies. At present the approved jurisdictions are EU and EEA member states, OECD member states, Jersey, Guernsey, Gibraltrar, British Virgin Islands, Bahamas, Bermuda, Isle of Man, Cayman Islands and Mauritius.
3rd requirement : the laws of the foreign company where the overseas company is continued or registered must allow such continuance.
4th requirement : The memorandum or articles of association, charter or other instrument constituting the overseas company seeking redomiciliation to Malta must allow the continuation of the company to another jurisdiction. Where such the constitutive documents do not contain such authorisation these must be amended to include such provision prior to the company applying with the Registrar of Companies to re-domicile to Malta.
PROCEDURE FOR REDOMICILIATION
In order to be continued in Malta, a request by a foreign company must be made to the Registrar of Companies. The above request must be accompanied by a number of documents mainly intended to confirm to the Registrar the existence of the foreign company and of its intention to continue in Malta. These documents must include, inter alia:
- An extraordinary resolution taken by the foreign company approving the registration of the company as continued in Malta;
- The constitutive documents of the company must be revised to comply with the Maltese Companies Act. Accordingly, the Memorandum and Articles of Association of the company would need to have the minimum share capital required in terms of the Companies Act, a registered office in Malta, at least one director and a company secretary, who must be an individual. There are no nationality restrictions as far as the directors and company secretary are concerned.
- A declaration made by at least two directors of the foreign company (unless the Board of Directors is composed of one) confirming, among others, the solvency of the company and also confirming that the directors are not aware of any circumstances which could negatively affect the solvency position of the company.
- A good standing certificate or equivalent document issued by the competent authority in which the foreign company was incorporated confirming that the foreign company is in compliance with the registration requirements of that jurisdiction.
- Evidence satisfying the Registrar that redomiciliation is allowed by the laws of the foreign jurisdiction and the consent of creditors and debenture-holders has been obtained. A legal opinion confirming the above usually suffices.
One must note that if the foreign company has a foreign nominee or trustee as one of the shareholders, foreign trustee must obtain authorisation to act as a trustee. Alternatively, the foreign trustee can transfer the shares to a person who is authorised within fifteen days form when it is registered as continued in Malta
EFFECTS OF REGISTRATION
Once Registrar verifies that the documents submitted are in order, foreign company is provisionally registered and the Registrar issues a Provisional Certificate of Continuation. Upon the issue of the Provisional Certificate, the foreign company can start operating in Malta. The continuation will not result in the creation of a new legal entity but the company is considered as being subject to all the rights and obligations of a Maltese company.
Within a period of six months from the date of the issue of the Provisional Certificate of Continuation, the company must submit documentary evidence to the satisfaction of the Registrar that it has been struck off from the register in the foreign jurisdiction where it was initially registered. Upon such documentary evidence being submitted, the Registrar will issue the Certificate of Continuation. There is no difference at law between the effects of the Provisional Certificate of Continuation and the Certificate of Continuation. The foreign company is deemed to be registered in Malta and can start operating upon the issuance of the Provisional Certificate of Continuation. The purpose of the final Certificate of Continuation is to confirm that the company has been struck off the foreign register and that it has been registered as continuing in Malta as from the date of the Provisional Certificate of Continuation.
Failure of the foreign company to deregister in the foreign jurisdiction will result in the Registrar of Companies striking the name of the company off the register of companies in Malta and informing the relevant authority of the jurisdiction concerned that the company is no longer registered in Malta.
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