Re-domicile

The Jolly Contrarian’s Glossary The snippy guide to financial services lingo.™ →Go uptown Index — Click the ᐅ to expand: Glossary Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Imagine you have a fund domiciled in Bermuda and you have decided to move it to the Cayman Islands. Look, these things happen. What happens to its contracts? There is a rather curly metaphysical question as to what happens when you move the centre of main interest of a corporate entity — you “re-domicile” it — from one jurisdiction to another.

A Bermudan company relies for its very ontological existence on the laws and constitution of Bermuda. It is only by dint of those laws and that constitution that the idea of a Bermudan company has any coherence at all. The same is true of Caymanian companies.

Now the laws of Bermuda may recognise a company from the Cayman islands; they may allow a Bermudan person to do business with it, but all the same it is an alien to Bermudian jurisprudence. The courts of Cayman may, likewise may recognise a corporation from Bermuda. A Bermudan limited liability company and a Cayman Islands limited liability company may, in every respect, closely resemble each other but still they are, in an profound way, incommensurate paradigms. There are operating systems are different. One cannot simply shape-shift from one to the other without experiencing some kind of Lagrange Point on the journey at which the subject is neither a Caymanian company nor a Bermudan company, but a disassociated spirit: a will o’ the wisp.

Does the legal entity have continuity? On one hand one would like to think it did; on the other, seeing as a corporation is a forensic creature of its jurisdiction of incorporation; a fiction of the local legal literature. Moving it outright from one jurisdiction into an altogether different jurisdiction is rather like following a wormhole in the space-time continuum from one universe to another.