There has been a rise in migration of offshore companies into Luxembourg over the past few years.
A company which transfers its registered office along with its central administration to Luxembourg becomes subject to Luxembourg laws.
The process of migration into Luxembourg is straightforward and requires efficient cooperation between the advisors of the overseas and the Luxembourg jurisdictions.
The process for an overseas company to migrate to Luxembourg
Prior to implementation of the process, a preliminary analysis shall be conducted:
- do the laws of the overseas jurisdiction allow the continuity of the legal personality of the company following the migration into Luxembourg?
- which legal form shall be adopted by the company in Luxembourg?
- make sure that migration will not result in dual nationality.
- tax advice shall be sought to make sure that migration does not trigger a tax charge on exit.
A certain number of formalities shall be completed in the overseas jurisdiction and Luxembourg:
Formalities in the overseas jurisdiction
These formalities shall be conducted in compliance with the laws of the overseas jurisdiction. The overseas jurisdictions, very often, would need to be provided with the following documents:
- decision of the competent corporate bodies of the company taken under the laws of the jurisdiction of origin approving the migration;
- copy of the legal opinion issued by Luxembourg counsels evidencing the company's continuation, once the company has been continued into Luxembourg.
Advice of the overseas counsels shall be sought in that respect.
Formalities in Luxembourg
A meeting with a Luxembourg notary shall be organised to enact (i) the migration and (ii) the adoption of the articles of association of the company in compliance with Luxembourg laws. The notary, very often would request the following documents:
- certified copy of the articles of association of the company under the laws of the jurisdiction of origin;
- copy of a certificate of good standing with respect to the company;
- copy of the decision of the competent corporate bodies of the company under the laws of the jurisdiction of origin;
- certified copy of the shareholders’ register of the company;
- copy of the Luxembourg independent auditor’s report confirming that the value of the net assets of the company migrating is equal to at least the minimum share capital set under Luxembourg law;
- copy of the legal opinion issued by the overseas counsel confirming that pursuant to the laws of the overseas jurisdiction, the company continues its existence in Luxembourg without any loss or interruption of the company’s legal personality;
- draft of the articles of association of the company adjusted in compliance with Luxembourg laws.
It has to be noted that Luxembourg law does not provide for any specific protection of the creditors of the company since it is considered that the migration would not affect the assets of the company migrating into Luxembourg.
Effects of migration of an overseas company into Luxembourg
- the company will have it's central administration and registered office in Luxembourg.
- the legal personality of the company will continue with all its assets and liabilities.
- the company adopts the Luxembourg nationality.
- the company becomes subject to the laws of Luxembourg including its corporate laws.
- the company becomes a Luxembourg tax resident.