How to Relocate a UK Business Abroad: Understanding Corporate Re-domiciliation and Corporate Relocation

In an increasingly globalised world, more UK-based business owners are exploring opportunities abroad. Whether it’s for tax optimisation, access to new markets, or regulatory advantages, corporate relocation has become a viable growth strategy. However, there is often confusion around the concept of corporate re-domiciliation, particularly because the UK does not yet allow the legal migration of a company to another jurisdiction in a literal sense.

In our previous article on re-domiciliation to the UK, we explored how foreign businesses can move their operations into the UK. This article shifts the focus outward, exploring what options are available when a UK business wants to move its base overseas through corporate re-domiciliation or other relocation methods.

What Is Corporate Re-domiciliation?

Corporate re-domiciliation refers to the process of transferring a company’s place of incorporation from one country to another while maintaining its legal identity. In jurisdictions where this is permitted, a business can change its domicile without liquidating or forming a new entity. Unfortunately, this process is not currently available under UK law.

This means a UK limited company cannot simply “move” to another country in a legal sense. Therefore, business owners seeking to operate abroad must pursue alternative corporate relocation strategies.

Available Strategies for Corporate Relocation

Since corporate re-domiciliation isn’t allowed under UK law, UK companies must restructure their business through one of the following options:

1. Establishing a New Company Abroad

One of the most straightforward methods of corporate relocation is to incorporate a new entity in your target jurisdiction. After this, you can:

• Transfer assets and contracts from the UK entity to the new foreign company
• Begin operations under the same brand
• Wind down the UK entity if no longer required

This effectively acts as a workaround for corporate re-domiciliation. However, it’s vital to consider tax implications and compliance obligations in both countries.

2. Setting Up an Overseas Branch

An alternative to establishing a new legal entity is setting up a branch of your UK company abroad. This model allows your UK company to maintain its identity while operating in a foreign jurisdiction. You’ll need to register the branch locally and comply with the host country’s tax and employment regulations.

While this doesn’t meet the technical definition of corporate re-domiciliation, it serves as a functional method of corporate relocation.

3. Mergers, Acquisitions, or Joint Ventures

Forming strategic partnerships or acquiring a foreign company is another way to establish an overseas footprint. This method can offer easier market access and reduce the risks associated with market entry, particularly in regions with complex regulatory landscapes.

Key Considerations When Relocating Abroad

1. Tax Implications

Tax is arguably the most significant factor in corporate relocation. Here are a few considerations:

• Exit charges: If you close or transfer the UK company’s operations, you may be liable for exit taxes on asset gains.
• Controlled Foreign Company (CFC) rules: If your overseas entity is controlled from the UK, profits may be subject to UK tax. Read our recent article to learn more.
• Double Taxation Treaties: These help prevent businesses from being taxed twice on the same income. Understanding your target country’s treaty with the UK is essential.

Working with an international tax advisor is strongly advised to avoid surprises.

2. Compliance and Reporting

Every jurisdiction has unique incorporation rules. You’ll need to consider:

• Local business registration and licensing requirements
• Accounting standards and statutory audits
• Filing obligations and penalties for non-compliance

Additionally, GDPR and local data protection laws must be reviewed if you handle personal data.

3. Employment and Labour Laws

If you plan to relocate employees or hire locally, you must comply with local employment legislation. This includes contracts, social security contributions, minimum wages, and dismissal protections. Missteps in this area can result in fines and reputational damage.

4. IP and Branding

Transferring trademarks, domain names, and other intellectual property to your new entity is vital during corporate relocation. Each country has its own registration processes and timelines, so it’s advisable to consult an IP lawyer familiar with the target jurisdiction.

Routes to Market: How to Choose the Right Approach

There are several strategic models you can use to enter a new market:

• Direct Exporting: Selling from the UK without establishing a physical presence abroad.
• Licensing & Franchising: Allowing third parties in the foreign country to sell your products or services.
• Joint Ventures: Partnering with a local business to share risk and knowledge.
• Wholly-Owned Subsidiary: Full control but higher cost and responsibility.

Each approach has different implications for your brand, tax strategy, and legal compliance.

Planning a Successful Corporate Relocation

A well-planned corporate relocation strategy involves:

1. Assessing business goals and motivations – Is the move driven by tax, market access, labour, or regulatory concerns?
2. Choosing the right destination – Consider political stability, ease of doing business, tax rates, and talent availability.
3. Understanding costs – From legal fees and taxes to translation and staffing costs.
4. Seeking professional advice – International business law, tax planning, and HR support are all vital.

Final Thoughts

Although corporate re-domiciliation is not currently supported under UK company law, there are effective ways to achieve corporate relocation through restructuring, creating foreign branches, or forming new entities. With careful planning and expert guidance, businesses can expand internationally while managing risk and remaining compliant.

Whether you’re eyeing Dubai for its tax advantages or Italy for access to the EU single market, corporate relocation can be a powerful growth move, when done correctly. If you want to learn more contact us.