PUBLICATIONS 

Company Re-domiciliation in Cyprus

Re-domiciliation is the process by which a country allows the transfer of a company’s seat of incorporation to another jurisdiction. For example, it is the process by which a company which is registered in Germany registers itself to Cyprus or vice-versa.

Cyprus allows the re-domiciliation of Cyprus companies abroad and of foreign companies to Cyprus.

Why re-domiciliate a company in Cyprus?

There are several reasons why a company should re-domiciliate in Cyprus which we list below:

  • One of the most appealing is the fact that the company continues trading in Cyprus, by maintaining its legal identity which it had established in the foreign jurisdiction in Cyprus. Continuity is therefore established.
  • The foreign company dispenses with the requirement of being liquidated in the foreign jurisdiction and transferring its business and assets to a newly formed company. The formation of a new company and the transfer of business and assets abroad is a much more complex procedure.
  • The Cyprus legal system is based on English law.
  • It is advantageous from a tax perspective.
    • Cyprus has an extensive double tax treaty network. Irrespective of a tax treaty being in existence, there is also unilateral tax relief.
    • A Cyprus Company is subject to a low corporate tax rate of 12.5% whilst corporate tax is exempt in relation to dividend income, interest income and profits from a ?PE? in another jurisdiction.
    • The liquidation of a Cyprus company is not taxed.
    • A list of other tax related matters can be found here

What is the procedure in re-domiciliating a Company in Cyprus?

Prior to the application, it is advisable that a legal opinion is obtained from a lawyer in the company’s current jurisdiction regarding whether re-domiciliation of the company to Cyprus is allowed under the laws of that country.

Then, the company appoints a representative in Cyprus to deal with the re-domiciliation process in Cyprus. A lawyer can be appointed as the representative

The application must state several information and it should be supported by several documents.

The necessary information supporting the application are : the foreign company’s registered name and registration number, the suggested name which it will continue to use in Cyprus, the jurisdiction in which the foreign company is currently registered, the date of incorporation, a description of the business activities of the company and the share capital of the company.

Documents which support the application:

There are several documents which must support the application for redomiciling a foreign company to Cyprus. They are the following:

  1. Copy of the Memorandum and Articles of Association of the foreign company in accordance with the provisions of the Cyprus law. In case the Memorandum and Articles of Association do not provide for the possibility of re-domiciliation, then these documents should be amended – thus the Amended Memorandum and Articles of Association should be presented.
  2. Certificate of good standing from the corresponding authority to the Registrar of Companies in the foreign jurisdiction.
  3. A certified list of the company’s directors and the Secretary of the foreign company or in cases where there is no director or secretary, the people to whichthe administration and/or representation of the foreign company had been assigned. (i.e. A Certificate of directors, secretary or members duly certified and apostilled)
  4. A certified list of the company’s current shareholders (i.e. A Certificate of shareholders duly certified and apostilled)
  5. An affidavit from a Director of the foreign company confirming the solvency of the foreign company and that they are not aware of any facts which may negatively affect the solvency of the company within the period of 12 months from the date of the said application.
  6. An affidavit in form “ME A”, duly signed by the director of the foreign company or the authorised agent of the foreign company stating the following:
    • The current name of the foreign company
    • The proposed name under which it will continue in Cyprus.
    • The jurisdiction of the foreign company.
    • The date of incorporation of the foreign company.
  7. Any other documents as the Registrar of Companies in Cyprus may require in order to be satisfied that (a) such an application for re-domiciliation is permitted under the laws of the jurisdiction where the foreign company is currently incorporated and (b) the consent for the re-domiciliation has been granted by such number of members, employees and/or creditors of the company, as required under the laws of the jurisdiction where the foreign company is currently incorporated.
  8. If a document is required by the corresponding authority to the Registrar of Companies in the foreign jurisdiction which consents to the registration of the foreign entity in Cyprus.

 

If the foreign company is a public company then the following documents need to be produced in addition to the above:

  • The prospectus of the foreign company as at the time of offering its shares to the public.
  • Evidence of the consent of the foreign Stock Exchange regarding the re-domiciliation of the foreign public company to Cyprus (provided that the shares of the foreign company are listed on the Stock Exchange);
  • A duly certified list of the current shareholders of the foreign company.

After the application is submitted, the Registrar of Companies in Cyprus issues a temporary certificate confirming the continuation of the foreign company in Cyprus provided that the name that the foreign entity is altered should it cause confusion with other Cyprus companies.

Afterwards, and within a period of 6 months from the date of the temporary certificate of continuation, the foreign company must submit to the Registrar of Companies in Cyprus, evidence that the foreign company is no longer incorporated in the foreign jurisdiction. The application is supported by:

  1. A Certificate or other similar document that the foreign company is no longer registered in the foreign jurisdiction.
  2. Any other document which proves that the company is no longer registered in the foreign jurisdiction.
  3. The temporary certificate of continuation.

The Board of Directors of the new entity authorises the continuation of the new company in Cyprus and the Registrar of Companies issues the final Certificate of Continuation.

It should be noted that a foreign company cannot be re-domiciled if liquidation proceedings have commenced against the foreign company, a liquidator, receiver or administrator has been appointed or if a scheme of arrangement, measures of execution etc have commenced against the foreign entity. Furthermore, in case an order has been issued that the creditors’ rights are suspended or limited or proceedings for contravention of the foreign company’s jurisdiction’s laws have been initiated, the application will be rejected.

Finally, the application will be annulled if the re-domiciliation has the effect that the new entity formed in Cyprus has the effect of causing a loss or affects the continuation of the company in the overseas jurisdiction in order to prevent legal or other proceedings which commenced against it or to prevent an order or conviction against the foreign company.

This article is given for information purposes only and it does not constitute legal advice. Please give us a call or send us an email (office@dhadjinestoros.com) in order for us to assist you further on the matter.