Company redomiciliation is the process by which a company moves its domicile from one jurisdiction to another by changing the country under whose laws it is registered or incorporated while continuing the existence of the company. Companies may choose to redomicile for a variety of reasons, including commercial, practical and legal reasons. For a company to redomicile, it must be permitted to do so in both its originating jurisdiction and in its destination jurisdiction. In addition, there should be no restrictions in the memorandum and articles of association of the company, or any contracts or finance documents to which the company is a party.
The Singapore government amended its companies legislation in 2017 with the Singapore Companies (Amendment) Act 2017 (the "Singapore Act") and introduced an inward redomiciliation regime allowing foreign companies, including companies incorporated in the Cayman Islands and the British Virgin Islands ("BVI"), to transfer their registration to Singapore. This means that all rights and liabilities of the inbound company transfer over with the company into Singapore, and the redomiciled Singapore company is then required to comply with the Singapore Act like any other Singapore company.
Companies looking to migrate into Singapore will need to meet certain qualifications as required under the Singapore Act (including in relation to size and solvency), as well as comply with the requirements of the relevant jurisdictions of exit. The relevant companies legislation in both the Cayman Islands and the BVI contemplates redomiciliation in and out of the jurisdictions and we set out below the procedure involved for both a Cayman Islands company and a BVI company to redomicile to Singapore1.
Transfer of a Company by way of Continuation out of the Cayman Islands
Under the Companies Law (2020 Revision) of the Cayman Islands (the "Cayman Law"), the Registrar of Companies (the "Cayman Registrar") will deregister a Cayman Islands company incorporated and registered with limited liability and a share capital (the "Cayman Applicant") which proposes to be registered by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside of the Cayman Islands (the "Relevant Jurisdiction") if:
(a) the Cayman Applicant is an exempted company;
(b) the Cayman Applicant proposes to be registered by way of continuation in a jurisdiction which permits or does not prohibit the transfer of the Cayman Applicant;
(c) the Cayman Applicant has paid to the Cayman Registrar a fee equal to three times the annual fee that would have been payable in the January immediately preceding the application for deregistration; and
(d) notice has been filed with the Cayman Registrar of any proposed change in the name of the Cayman Applicant and of its proposed registered office or agent for service of process in the Relevant Jurisdiction.
Special additional rules apply to those companies which are licensed in the Cayman Islands (e.g. banks, trust companies, insurance companies and certain mutual funds). This article does not address those licensing requirements.
In order to be effective, the transfer must be approved in accordance with the Cayman Applicant's memorandum and articles of association. Usually a special resolution of the shareholders of the Cayman Applicant will be required (it may be necessary to amend the memorandum and articles of association of the Cayman Applicant to permit deregistration), and the directors must approve the deregistration and transfer.
A director of the Cayman Applicant must swear an affidavit confirming that, having made due enquiry, he or she is of the opinion that:
(a) no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the Cayman Applicant in any jurisdiction;
(b) no receiver, trustee or administrator or other similar person has been appointed in any jurisdiction in respect of the Cayman Applicant, its affairs or its property;
(c) no scheme, order, compromise or other similar arrangement has been entered into or made whereby the rights of creditors of the Cayman Applicant are and continue to be suspended or restricted;
(d) the Cayman Applicant is able to pay its debts as they fall due;
(e) the application for deregistration is bona fide and not intended to defraud creditors of the Cayman Applicant;
(f) any consent or approval to the transfer required by any contract or undertaking entered into or given by the Cayman Applicant has been obtained, released or waived;
(g) the transfer is permitted by, and has been approved in accordance with, the memorandum and articles of association of the Cayman Applicant;
(h) the laws of the Relevant Jurisdiction with respect to transfer have been or will be complied with (this is a matter in respect of which the director swearing the affidavit must take advice from lawyers in the Relevant Jurisdiction); and
(i) once re-registered the Cayman Applicant will continue as a body corporate limited by shares under the laws of the Relevant Jurisdiction.
The affidavit must also include a statement of the assets and liabilities of the Cayman Applicant made up to the latest practicable date before the swearing of the affidavit.
The Cayman Applicant is also required to deliver to the Cayman Registrar an undertaking signed by a director that notice of the transfer has been or will be given within 21 days to the secured creditors of the Cayman Applicant. If there are no secured creditors an appropriate negative statement to that effect may be included in the director's affidavit.
Upon deregistration of the Cayman Applicant pursuant to the Cayman Law, the Cayman Registrar will issue a certificate of deregistration confirming the date of deregistration as an exempted company, enter the date of deregistration in the register of companies and publish notice in the local Gazette of the deregistration of the Cayman Applicant, together with details of the Relevant Jurisdiction where the Cayman Applicant has been registered by way of continuation and the new name of the Cayman Applicant (if this has changed).
Effect of Deregistration
From the date of deregistration, the Cayman Applicant shall cease to be an exempted company under and subject to the Cayman Law.
The Cayman Law provides that, as a matter of Cayman Islands law, the re-registration provisions do not operate:
(a) to create a new legal entity;
(b) to prejudice or affect the identity or continuity of the Cayman Applicant as previously constituted;
(c) to affect the property of the Cayman Applicant;
(d) to affect any appointment made, resolution passed or any other act or thing done in relation to the Cayman Applicant pursuant to a power conferred by the memorandum and articles of association of the Cayman Applicant or by the laws of the Cayman Islands;
(e) except to the extent provided by or pursuant to the Cayman Law, to affect the rights, powers, authorities, functions and liabilities or obligations of the Cayman Applicant or any other person; or
(f) to render defective any legal proceedings by or against the Cayman Applicant and any legal proceedings that could have been continued or commenced by or against the Cayman Applicant before its deregistration under the Cayman Law may, notwithstanding the deregistration, be continued or commenced by or against the Cayman Applicant after deregistration.
Continuation of a BVI Company to a Foreign Jurisdiction
Under section 184 of the BVI Business Companies Act (as amended) of the BVI (the "BVI Act"), the Registrar of Corporate Affairs (the "BVI Registrar") will deregister a BVI company (the "BVI Applicant") which proposes to be registered by way of continuation as a body corporate under the laws of any jurisdiction outside of the BVI (the "Foreign Jurisdiction") if the BVI Applicant:
(a) is a company for which the BVI Registrar would issue a certificate of good standing;
(b) proposes to be registered by way of continuation in a Foreign Jurisdiction which permits the continuation of the BVI Applicant; and
(c) has complied with the laws of the relevant Foreign Jurisdiction.
The continuation of the BVI Applicant must not be contrary to its memorandum and articles of association and it may be necessary to amend the memorandum and articles of association to permit continuation. Subject to its memorandum and articles of association, the BVI Applicant may, by a resolution of directors or by a resolution of members, continue as a company incorporated under the laws of a Foreign Jurisdiction in the manner provided under those laws.
The BVI Applicant's registered agent is required to deliver to the BVI Registrar a notice to the effect that the BVI Applicant has continued its incorporation under the laws of the named Foreign Jurisdiction. Such notice must be accompanied by:
(a) a certified copy of the certificate of continuation (or equivalent) issued by the relevant Foreign Jurisdiction. Where the certificate of continuation (or equivalent) issued in the relevant Foreign Jurisdiction is not in the English language, a translation must also be submitted. The translation itself must be accompanied by a certificate of translation made for the purposes of regulation 29 of the BVI Business Companies Regulations, 2012 of the BVI which must certify that the translation is an accurate translation of the document concerned and that the person issuing the certificate of translation has the necessary competence to translate the document into English; and
(b) a declaration confirming:
(i) that the laws of the Foreign Jurisdiction permit the continuation of the BVI Applicant; and
(ii) the BVI Applicant has complied with those laws.
Where the continuation of a company to a Foreign Jurisdiction is dependent upon the issuing of a certificate of discontinuance by the BVI Registrar, the BVI Registrar may rely upon a provisional certificate of continuance (however described) issued in respect of the BVI Applicant under the laws of the relevant Foreign Jurisdiction as a basis to issue the certificate of discontinuance.
Where the BVI Applicant has a charge registered in respect of the property of the BVI Applicant on the public Register of Registered Charges maintained by the BVI Registrar which has not been released or satisfied, the BVI Applicant must, before continuing to the Foreign Jurisdiction and provided the charge does not contain a covenant prohibiting continuation of the BVI Applicant to a Foreign Jurisdiction, provide a written declaration addressed to the BVI Registrar specifying that:
(a) a notice of satisfaction or release in respect of the charge has been filed and registered under section 165 of the BVI Act; or
(b) the chargee to whom the registered charge relates has been notified in writing of the intention to continue the BVI Applicant as a company incorporated under the laws of the Foreign Jurisdiction and the chargee has consented to or has not objected to the continuation; or
(c) where paragraph (a) has not been satisfied and the chargee, after notification under paragraph (b), has not given consent or has objected to the continuation, the chargee's interest secured by the registered charge shall not be diminished or in any way compromised by the continuation and the charge shall operate as a liability to which subsection 184(5)(a) of the BVI Act applies.
Upon satisfaction by the BVI Registrar that the requirements of the BVI Act have been complied with, the BVI Registrar will strike the name of the BVI Applicant off the register of companies, issue a certificate of discontinuance and publish the striking off in the local Gazette.
Effect of Continuation to a Foreign Jurisdiction
Upon continuation of the BVI Applicant to the Foreign Jurisdiction:
(a) the BVI Applicant will continue to be liable for all of its claims, debts, liabilities and obligations that existed prior to its continuation as a company under the laws of the Foreign Jurisdiction;
(b) no conviction, judgment, ruling, order, claim, debt, liability or obligation due or to become due, and no cause existing, against the BVI Applicant or against any member, director, officer or agent thereof, is released or impaired by its continuation as a company under the laws of the Foreign Jurisdiction;
(c) no proceedings, whether civil or criminal, pending by or against the BVI Applicant, or against any member, director, officer or agent thereof, are abated or discontinued by its continuation as a company under the laws of the Foreign Jurisdiction, but the proceedings may be enforced, prosecuted, settled or compromised by or against the BVI Applicant or against the member, director, officer or agent thereof, as the case may be; and
(d) service of process may continue to be effected on the registered agent of the BVI Applicant in the BVI in respect of any claim, debt, liability or obligation of the company during its existence as a company under the BVI Act.
The introduction of the redomiciliation regime in Singapore has led to us receiving a number of enquiries in relation to the inward transfer of companies from the Cayman Islands and the BVI into Singapore and we have worked with local Singapore legal counsel on a number of successful Singapore re-registrations. The new redomiciliation regime has been a talking point among both clients and Singapore law firms and, as people become more familiar with the process, we expect to see continued interest from clients looking to explore the option of redomiciling to Singapore.
1 Please note that we only advise on matters of Cayman Islands and BVI law and it is therefore essential that appropriate Singapore legal advice be obtained in respect of the procedure for, and implications of, transferring a Cayman Islands or BVI company to Singapore. However, the Maples Group can provide fiduciary, fund services, regulatory and compliance, and entity formation and management services in respect of Singapore entities and would be able to provide any of these services to the redomiciled company upon completion of the redomiciliation process.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.