Re-Domiciliation of Companies into Cyprus
Numerous advantages of re-domiciliation process of foreign companies to Cyprus; in the tax and legal regime.
|Published on: 06 March 2017|
Cyprus Company Law, Cap. 113, as amended from time to time, permits the re-domiciliation procedure of companies, allowing a company to transfer its registered office, both in and out of Cyprus.
There are numerous advantages of re-domiciliation process of foreign companies to Cyprus one of which is of course the acquisition of Cyprus tax residency. Companies are able to obtain the benefits of the domestic tax system, as Cyprus has one of the lowest corporate tax rates (12.5%), and it is part of an extensive double tax treaties circle. Any dividend income, interest income, profits from a permanent establishment maintained outside Cyprus are exempt from corporate income tax in Cyprus. Also, royalties received by a connected company registered in an EU Member State are exempt from tax.
Furthermore, worth noting is that the Cypriot legal system falls under the umbrella of the protection and advantages of common European Union legislation provided by the various EU Directives and Regulations, which includes provisions of cross-border merger between companies established in EU Member States.
Therefore, foreign companies that choose to transfer their “seat” to Cyprus are able to benefit from the advantageous tax and legal regime that Cyprus offers.
The re-domiciliation procedure is a very straight-forward procedure, there is no need to start the formation of the company elsewhere from scratch and the foreign companies are able to do so without winding-up their business or legal entity.
A brief summary of the relevant procedure for the re-domiciliation of a foreign company into Cyprus is set out below:
The overseas company can apply for its registration as a continuing entity in Cyprus, under its existing name or under proposed new name, which is acceptable by the Registrar of Companies, provided that its constituent documents allow for such continuation in another jurisdiction.
The application should be accompanied by the documents of the foreign company proving, amongst others, the jurisdiction and the good standing of the company, its business activities, the details of the shareholders, directors and secretary (if any), the compliance with the laws of the foreign jurisdiction in order to confirm that the re-domiciliation is allowed by the laws of the country or jurisdiction where the foreign company has been incorporated and that the consent has been obtained from the members of the company as required and provided by the laws of the country or the jurisdiction of the formation.
Also, an affidavit of a Director of the foreign company, duly authorised, confirming the solvency of the foreign company and that he is not aware of any facts that may negatively affect the solvency of the company within the period of 12 months from the date of the said application.
In case where the foreign company is a public company or a licenced company then it has to submit to the Registrar a formal consent by the relevant foreign Authority.
All the required documents have to be submitted to the Registrar of Companies who will certify that the company is temporarily registered as a continued company in Cyprus by issuing the temporary Certificate of Continuation. This certificate confirms that the company is legally incorporated and operating in Cyprus.
Within six months from the date of the issuance of the Certificate of continuance, from the Registrar of Companies, the foreign company should submit documents from the overseas jurisdiction proving that the company ceased to be registered in the records of the overseas jurisdiction.
Then, the Registrar of Companies, will issue a final Certificate of Continuance of the company in Cyprus.
It is noteworthy, that in case where the re-domiciliation of the company is set up in order to create a new legal entity, to cause any damages to any third party (i.e. Creditors), related to the company or to affect the continuance of the company as legal entity, to avoid any legal proceedings arisen against it, or to invalidate any legal or other procedures arisen against it, then the registration of the foreign company will be deemed invalid.
Our group of companies in Cyprus specializes in re-domiciliation of foreign companies to the Republic of Cyprus and re-domiciliation of Cypriot companies abroad. Our experience with re-domiciliation has proven to be successful at most satisfactory level. Our associates and staff stand ready to assist you with efficient, high value cost efficient services and undertaking all necessary arrangements and steps for the completion of the re-domiciliation of companies to Cyprus and out of Cyprus.
Source: C. Savva & Associates (S&A)
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