Asked by Richard Murphy.
The English isn’t great: ignore that. The issue is this: do you believe anything said here? Is redomiciliation really a case of ‘moving up the scale of offshore administrations’? Or could it be something much more pernicious – the opportunity for a company to flee from one jurisdiction to another, lock, stock and barrel,. the moment a hint of any enquiry arises, meaning that those making the enquiry then have to start all over again in another place? In that case is it just a mechanism that facilitates fraud?
No one will be surprised to know that I incline to the latter opinion.
And no one will also be surprised to know that I see this as example of another dangerous development in our world – which is that of the corporation that floats free of responsibility to any place. Once that happens regulating the company becomes virtually impossible because there is no sanction to impose.
But I may be wrong. There are those (I’ve noticed) who like to say I am. So, for those who’d like to persuade me that I am I make these requests:
1) Which countries allow redomiciliation, and when did they begin to do so?
2) How many cases are there, by jurisdiction, a year?
3) Where do the companies move from, and to?
4) What are the costs?
5) Why do companies say they move?
6) What happens to the records in the country from which the company moves – are they simply expunged, or can they still be subject to an enquiry?
7) And why if this is so useful is its use largely restricted to the tax haven world?
I\’ll answer only one and seven.
The answer to 1) is that every EU country now allows this. As does every EFTA and EEA one. It\’s a direct consequence of the founding ideal of the EU itself: The free movement of goods, people and capital. Yes, this has been tested in court. There are two strands to it. Given that companies are legal persons they have the same right to change domicile as natural persons.
The second is the creation of the SE under the "Bolkestein Directive". This is the EU wide equivalent of a PLC (the capital requirements make it more like a PLC than a Ltd). It can, by simply moving its head office, domicile itself in any EEA jurisdiction. Yes, this includes Liechtenstein. No, it does not have to liquidate to do so.
Given that answer to 1) the supposition in 7) is obviously untrue. It isn\’t largely restricted to the tax haven world, it\’s at the heart of corporate structure and taxation in the world\’s largest integrated economy (to the extent, of course, that the EU is indeed the world\’s largest integrated economy).