Can debtors incorporated elsewhere enter into restructuring or insolvency proceedings in the jurisdiction?

Restructuring & Insolvency (3rd edition)

Canada Small Flag Canada

The place of incorporation is essentially irrelevant to the determination of whether a corporation may commence restructuring or insolvency proceedings under the BIA and the CCAA.

Under the BIA, the appropriate condition is whether the corporation “resides” in Canada (i.e. when the corporation has its head office in Canada) or whether the corporation carries on business or has property in Canada. The place of incorporation may be a criterion considered for the purpose of determining the place of residence of the debtor or in the analysis as to whether the corporation conducts business in Canada. Overall, this is a low threshold. In most cases, having a bank account or having its head office or residence (e.g. for tax purposes) in Canada is sufficient, absent factors to the contrary, to confer standing upon a debtor to seek BIA protection.

The CCAA is even broader with respect to providing jurisdiction for companies that are seeking protection from their creditors under the CCAA. It is sufficient that the debtor company be bankrupt or insolvent and have claims against it in excess of CAD$5,000,000.

British Virgin Islands Small Flag British Virgin Islands

Section 163 IA gives the court power to appoint a liquidator over an insolvent company that is not incorporated in the BVI, but only if that company has a sufficient connection to the BVI. Such a connection will exist if the company has or appears to have assets in the BVI, if it is carrying on or has carried on business in the BVI, or if there is a reasonable prospect that the appointment of a liquidator in the BVI will benefit the creditors of the company. Even if such a connection is established, the BVI court retains discretion regarding whether or not to appoint a liquidator.

Cayman Islands Small Flag Cayman Islands

The Cayman Islands Grand Court has the jurisdiction to wind up a foreign company or to sanction a scheme of arrangement in relation to a foreign company if the company:

  • has property located in the Cayman Islands;
  • has been carrying on business in the Cayman Islands;
  • is the general partner of a Cayman Islands limited partnership; or
  • is registered as a foreign company with the Cayman Islands Registrar of Companies.

China Small Flag China

No, they cannot. According to China’s General Principles of Civil Law regarding enterprise legal persons, an enterprise legal person must have a capital prescribed by Chinese law, have its own articles of association, organizational structure and premises, be able to bear civil liability independently, and have been approved by and registered with China’s competent authorities. Enterprise legal persons also include Sino-foreign equity joint ventures, Sino-foreign contractual joint ventures and wholly foreign-owned enterprises which are established in China, meet all the qualification requirements for a Chinese enterprise legal person and have been approved by and registered with the Chinese authority in charge of industrial and commercial affairs. In sum, an enterprise legal person here means a Chinese enterprise legal person.

Denmark Small Flag Denmark

If the debtor’s business activities are carried out outside Denmark, insolvency proceedings may only be commenced against the debtor if the debtor’s local court is in Denmark.

If the debtor’s local court is not in Denmark, but the debtor carries out the business activities through a subsidiary in Denmark, insolvency proceedings may be commenced in Denmark against the subsidiary in question. This will most likely apply to branches if the branch is registered as having a share capital and limited liability.

Please note that if the debtor is subject to restructuring proceedings, insolvency proceeding may be commenced against the debtor in Denmark at the conclusion of the restructuring proceedings even though the debtor no longer carries on a business in Denmark or the debtor’s local court is no longer in Denmark.

France Small Flag France

  • Companies incorporated in a EU member state

As stated above, a company incorporated in another Member State could enter into insolvency proceedings if its COMI is in France. However, if such debtor has only an “establishment” in another EU Member State, the courts of that State only have jurisdiction to open “secondary proceedings”, restricted to the debtor’s assets located in that state.

  • Companies incorporated outside an EU Member State

When a company has a mere branch or establishment in France (which is not necessarily the COMI), French courts have jurisdiction insolvency proceedings to its benefit. French courts even have jurisdiction when the company has business relationships in France or of a “real commercial presence” in France.

  • UNCITRAL Model Law on Cross Border Insolvency

The UNCITRAL Model Law on Cross Border Insolvency has not been adopted in France.

Germany Small Flag Germany

Pursuant to Article 3 of the European Insolvency Regulation 2015/848, the courts of the EU member state in the territory where the center of the debtor’s main interests (COMI) is situated shall have jurisdiction to open insolvency proceedings. Thus, a debtor incorporated in another EU member state can file for the opening of insolvency proceedings in Germany. The COMI is the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties. In the case of a company or legal person, the place of the registered office shall be presumed to be the COMI in the absence of proof to the contrary, unless the registered office was moved to another EU member state during the preceding three months.

Pursuant to Sec. 3 Insolvency Code (analogue application), German jurisdiction also applies to a foreign debtor that is not incorporated in another EU member state but has its COMI in Germany.

Please note that most German courts tend to be critical regarding forum shopping and assuming their own jurisdiction. Thus, an insolvency filing of a foreign debtor in Germany must be well prepared and should provide detailed information/reasoning regarding the German COMI / jurisdiction.

Bermuda Small Flag Bermuda

Only where the Company has a permit to conduct business in Bermuda under the Companies Act 1981. Otherwise there is no power to place a foreign company into liquidation in Bermuda.

Guernsey Small Flag Guernsey

No. The provisions of the Companies Law only apply to Guernsey registered companies. A proposal to introduce the ability to wind up foreign registered companies has been approved.

Ireland Small Flag Ireland


Examinership is available in principle to any company having its centre of main interests in Ireland, including non-Irish incorporated companies.


Under the Insolvency Regulations, the Irish High Court has jurisdiction to wind up a company that is incorporated under the laws of another EU jurisdiction where that company has its centre of main interests (or COMI) in Ireland. The Irish High Court also has jurisdiction to open secondary proceedings in respect of a company that is incorporated under the laws of another EU jurisdiction where main insolvency proceedings have been opened in another EU member state provided that the relevant company has an establishment in Ireland.

The Irish High Court also has jurisdiction to wind-up companies that are registered in jurisdictions outside the EU where (a) there is a substantive connection with Ireland, (b) there is a reasonable possibility, if a winding-up order is made, of such order benefitting those applying and (c) the Court has jurisdiction over one or more persons that are interested in the distribution of assets of the company.


A receiver can be appointed to assets held by a foreign-incorporated company in Ireland, provided that the terms of the relevant document allow for this.

Jersey Small Flag Jersey

  1. The Royal Court has jurisdiction to make a declaration that a person or entity’s estate is en désastre and should vest in the Viscount regardless of where they reside or are incorporated if they have:

    (i) carried on business in Jersey in the three years preceding the application; or

    (ii) if they own immovable property situate in Jersey. (Desastre Law Art.3)

  2. Otherwise only Jersey residents or entities incorporated or constituted under Jersey statutes can be subject to Jersey insolvency processes.
  3. A creditors’ winding up is only available to Jersey registered companies.

Mexico Small Flag Mexico

Mexico would recognize a foreign main proceeding pursuant to rules modeled on the UNCITRAL Model Law on Cross-Border Insolvency.

Main proceedings of a foreign debtor may be carried out in Mexico only if such foreign debtor has a branch in Mexico, and insolvency proceedings would only encompass tangible assets located, and intangible assets enforceable, in Mexico and with respect to claims held by creditors for operations with those branches.

The natural consequence of this provision requires “ring fencing” the estate, which raises two distinct issues: one, concerning the location of assets (active estate), and another, concerning the claims for operations attributable to a branch (passive estate). Aside from the fact that in this case the Insolvency Law clearly strays from universalism and adopts a territorial approach, this provision requires carrying out an analysis of the estate for which the Insolvency Law is ill-equipped.

Peru Small Flag Peru

The Commission of Insolvency Proceedings is the insolvency authority and as such is competent to try the insolvency proceedings of all debtors domiciled in Peru. Such competence includes insolvency proceedings of both natural persons and legal entities domiciled abroad, (i) provided that the Peruvian courts had recognized the foreign judgment declaring insolvency (applying exequatur) or (ii) when so provided by the regulations of Private International Law. In both cases, such competence will apply only to a debtor’s assets located in the Peruvian territory.

Poland Small Flag Poland

Yes, if their place of business (so-called COMI – center of main interest) is located within Poland’s territory.

Singapore Small Flag Singapore

A foreign company with a “substantial connection” to Singapore may apply for a scheme, judicial management, or be wound up by the Court. In determining whether a company has a “substantial connection” the Court will look at various factors, including whether a company (i) has it centre of main interests in Singapore; (ii) caries on business in Singapore; (iii) has substantial assets in Singapore; (iv) has chosen Singapore law to govern a transaction; or (v) has submitted to the jurisdiction of the Court.

Sweden Small Flag Sweden

Debtors incorporated in other jurisdictions than Sweden may be subject to local Swedish bankruptcy proceedings if the debtor has branch and a business place in Sweden. Such local proceedings will be territorial and thus comprise only assets in Sweden.

Switzerland Small Flag Switzerland

Main Swiss restructuring or insolvency proceedings would not be available to a debtor incorporated elsewhere. Where a foreign debtor is undergoing restructuring or insolvency proceedings outside of Switzerland, a foreign insolvency official would not be authorized to take possession of, or otherwise seek enforcement in, any Swiss assets of the debtor. This notwithstanding, in case a debtor incorporated outside of Switzerland operates a branch in Switzerland, Swiss insolvency proceedings may be opened against such debtor at the place where the Swiss branch is located (Niederlassungskonkurs). Such proceedings, however, are limited to obligations incurred by the branch as direct counterparty (Art. 50 DEBA). For the sake of completeness, it should further be noted that there are discussions in Swiss legal doctrine as to whether main Swiss proceedings should be available for a non-Swiss incorporated entity in exceptional circumstances where main insolvency proceedings in the jurisdiction at the registered seat are either not available or impracticable (high threshold) and there is a at the same time a close nexus to Switzerland (such as a debtor's COMI in Switzerland). We are, however, not aware of any precedents where main proceedings were opened in Switzerland in application of this theory.

As a consequence of the principle of territoriality, insolvency proceedings in relation to a debtor having its registered seat outside of Switzerland have no effect (in particular with regard to Swiss-located assets of such debtor) unless they have been recognized in Switzerland. Foreign insolvency proceedings can be recognized in Switzerland if the following requirements are fulfilled: (i) the insolvency decree must have been rendered in the state of the debtor's domicile or where the debtor has its COMI outside of Switzerland; (ii) the petition for recognition was made by the insolvency administrator, by the debtor itself or by a creditor; (iii) the insolvency decree must be enforceable in the state where it was rendered; and (iv) the foreign insolvency proceedings must not violate Swiss public policy and the fundamental principles of Swiss procedural law. Since 1 January 2019, such recognition requirements no longer include reciprocity (which previously often constituted a recognition obstacle).

The regime regarding the recognition of foreign insolvency proceedings has been revised with effect as of 1 January 2019 (cf. section 16 above). Prior to such revision, the opening of Swiss ancillary proceedings was mandatory in case of bankruptcy. In contrast, under certain circumstances, no ancillary Swiss proceedings were necessary in case of restructuring-type of proceedings. Under the revised laws, Swiss courts may now waive the opening of ancillary proceedings also in case of a recognition of a foreign bankruptcy decree, provided that (i) a request to this effect is made by the foreign bankruptcy administration, (ii) there are no privileged Swiss creditors or creditors which are secured by collateral located in Switzerland and (iii) the claims of non-privileged and unsecured creditors in Switzerland are adequately taken into account in the foreign proceedings and such creditors were granted an opportunity to be heard. In case ancillary proceedings are waived, the foreign insolvency administration is authorized to carry out all actions falling in its competence pursuant to the applicable foreign law in Switzerland, including, most notably, the transfer of assets of the foreign debtor located in Switzerland to the foreign insolvency estate. In this context, the foreign insolvency administration must ensure that it is at all times compliant with all applicable Swiss laws. In particular, it must not perform any official acts, use any means of coercion or adjudicate on any disputes.

If, on the other hand, ancillary proceedings are opened, only certain claims may be included in the schedule of admitted debts, i.e. (i) claims secured by collateral located in Switzerland, (ii) the unsecured but privileged claims of creditors having their domicile in Switzerland and (iii) claims for liabilities on account of a branch of the debtor recorded in the commercial register in Switzerland. Any remaining balance after the satisfaction of such claims is remitted to the foreign bankruptcy estate. Such transfer, however, requires the prior recognition of the foreign schedule of claims in Switzerland whereby the Swiss courts verify, in particular, whether the creditors domiciled in Switzerland were fairly treated in the (foreign) procedure and granted an opportunity to be heard.

Spain Small Flag Spain

Foreign debtors could apply for the DIP or a restructuring proceeding in another Member State, if they demonstrate that the interest center’s debtor is situated within the territory of a given Member State. The courts of another Member State shall have jurisdiction to open insolvency proceedings against that debtor only if it possesses an establishment within the territory of that other Member State, according to article 3.2 of RIP. This proceeding will be considered as a secondary insolvency proceeding (art. 34 and sequence of RIP).

On the other hand, foreign debtors could be recognized in a restructuring or insolvency proceedings as a credit claim in favor of the insolvency company. In this case, IA will have to execute all the necessary action in order to recover this credit.

United States Small Flag United States

Yes. With some exceptions (e.g., a railroad, insurance company, or a bank that has a branch in the U.S.), a foreign debtor may commence a bankruptcy case under one of the chapters of the Code. The foreign debtor will be required to satisfy the requirements of section 109 of the Code by having a domicile, a place of business, or property located in the U.S. at the time of the commencement of its bankruptcy case. Courts in the U.S. have interpreted the property requirement quite liberally finding section 109 satisfied where the foreign debtor had minimal or nominal amounts of property located in the U.S. (e.g., the foreign debtor had a U.S. bank account or paid a retainer to its U.S. professional that was being held in its U.S.-based trust account, etc.).

United Kingdom Small Flag United Kingdom

Yes; the jurisdictional threshold varies according to the relevant procedure, and looks set to change on Brexit. There are a variety of ways for a foreign debtor to access the jurisdiction, including e.g. by shifting the company’s center of main interests (CoMI) to the UK.

Hungary Small Flag Hungary

Yes, pursuant to the Insolvency Act, the Fővárosi Törvényszék (Budapest Metropolitan Court) shall have competence and exclusive jurisdiction for opening and determining proceedings opened in the form of territorial insolvency proceedings – territorial proceedings whose purpose is reorganization or liquidation – or for the conversion of other types of proceedings into territorial proceedings, against economic operators falling under the scope of the Regulation such that have their center of main interests in another Member State of the European Union.

Belgium Small Flag Belgium

The insolvency court located in the jurisdiction in which the debtor has its COMI centre is exclusively authorized to open insolvency proceedings. For legal entities the COMI is presumed to be the location of the registered office unless the registered office has been transferred to another jurisdiction during the three months prior to the application for insolvency proceedings.

Israel Small Flag Israel

Pursuant to provisions of Section 380 of the Companies Ordinance, which were also adopted in the Insolvency Law, Israeli insolvency laws would apply to companies incorporated outside Israel in two cases: (1) To any company with assets in Israel, whether or not registered in Israel. (2) Should the Minister of Justice order the provisions of the ordinance to be applicable to the foreign company facing dissolution.

Note that according to the Court's approach, the term "asset" should be given a broad, purposeful interpretation whereby an asset is a thing owned, with economic value, which must have two major attributes: First, it should indicate sufficient connection with Israel, i.e. sufficient affinity of the company with the Israeli forum; and second, it should indicate the effectiveness of managing the proceeding at the Israeli forum, in the broad sense. That is, it should ensure that the dissolution order to be issued would be effective with regard to the company and its assets – in favor of the creditors.

Romania Small Flag Romania

Taking into consideration the provisions of CE Regulation 1346/2000 on insolvency proceedings, subsequently repealed by EU Regulation 2015/848 on insolvency proceedings (recast), the Romanian legislation (i.e. Law 85/2014) was updated and the chapter entitled Border Insolvency was inserted within the new version of the law.

According to these provisions, the insolvency proceedings are opened against the debtor in the Member State where he has the center of his main interests - presumed to be the within state where the debtor has its registered office.

In order to ensure proper administration of the debtor's assets, the mentioned Regulation parallels secondary procedures to be opened in other Member States - procedures that apply only to goods located in those States.

As far as the applicable law is concerned, it is the law of the Member State where the insolvency procedure was opened - a law regulating the conditions for the opening, conduct and closure of the procedure.

Decisions on these matters are recognized without further formalities in all other Member States as soon as they have effect in the State where the procedure was opened.

Updated: June 5, 2019