1. Introduction:

 

The re-domiciliation of companies is a procedure during which a company transfers its seat and registered office of incorporation, to and from one jurisdiction, and continues to exist under the laws of another jurisdiction without the involvement of the dissolution process. The main precondition for this is permission by both laws of the relevant jurisdictions for the re-domiciliation of companies.

The Cyprus Companies Law, CAP 113 (the ‘’Law’’) provides for the re-domiciliation of companies including provision regulating:

  1. the continuation of foreign companies in Cyprus, provided that the jurisdiction of its incorporation permits the continuation of such company out of the said jurisdiction, and
  2. the continuation of Cyprus companies out of the Republic.
  3. Benefits of re-domiciling to Cyprus

It is a fact that foreign investors and international merchants obtain plenty and numerous benefits by either establishing a company in Cyprus or re-domiciliating to Cyprus.

The combination of the simplicity and the low financial costs of the procedure of the re-domiciliation of a company to Cyprus is one of the main advantages for the continuation of foreign companies in Cyprus.

There are several advantages and benefits of transferring a company’s registered office to Cyprus, including the following:

  1. By becoming a tax resident in Cyprus, a company will be able to benefit from the domestic tax system, it is noted that non-resident companies are taxed in Cyprus only on income derived from a permanent establishment or immovable property in Cyprus;
  2. Benefit from the one of the lowest corporate tax rates of 12,5% in Europe;
  1. Benefit from the following corporate income tax exemptions: dividend income, interest income, profits from a permanent establishment maintained outside Cyprus; and
  2. Royalties received by a connected company registered in the European Union (the ‘’EU’’) are exempted from tax.

 

  1. The foreign company will continue to maintain its legal identity even after its transfer to Cyprus;
  2. The legal system of Cyprus falls under the protection and benefits of the common EU legislation as Directives Regulations; and

 

 

  1. Procedure for the re-domiciliation into Cyprus

As previously mentioned, the re-domiciliation procedure under the Cyprus Company Law is a straightforward procedure and does not require the dissolution of the company. In order to apply for re-domiciliation to Cyprus the company should ensure that it is allowed by its constitutional documents, i.e. Memorandum and Articles of Association and the laws of its incorporation jurisdiction.

Subject to the above conditions, the foreign company could apply, by appointing a local attorney, to the Cyprus Registrar of Companies to be transferred to Cyprus and continue to exist under the laws of Cyprus.

As soon as the application and its accompanying documents are approved by the Cyprus Registrar of Companies, the foreign company will obtain a temporary certificate of continuity. This certificate constitutes evidence that the company is a legal entity duly incorporated in accordance with the laws of Cyprus and will have the possibility to continue its business activities subject to the Cyprus Law, and local Tax legislations, upon confirmation of its official transfer abroad and the issuance of a certificate of dissolution confirming that is has been removed from the companies’ registry in the country of origin. Upon the submission of the above-mentioned certificate of dissolution within 6 months from the issuance of the temporary certificate of continuation, the Registrar of Companies will proceed with the issuance of the certificate of continuation confirming the company’s continuation in Cyprus.

 

  1. Procedure for the re-domiciliation outside Cyprus

Upon receipt of the relevant consent from the Registrar of Companies, a Cyprus company may continue to exist under the laws of another jurisdiction provided that such re-domiciliation is duly permitted under the legal framework of the latter and the Memorandum and Articles of Association of the Cyprus company.

The Registrar will grant its consent following the submission of the relevant application accompanied by the necessary documentation.

The main condition is that the Cyprus company must have not breached any domestic laws and must not be under liquidation procedure or execution of court orders in Cyprus or elsewhere.

After granting the above-mentioned consent, and provided that the certificate of continuation from the competent authority in the foreign jurisdiction has been presented to the Registrar, the latter will strike the Cyprus company off its Registry.

 

HOW SCLAW CAN HELP

 

If any assistance or further clarifications are needed for this matter, please do not hesitate to contact our office.

For further information or clarifications, please contact S. Constantinou & Associates LLC at [email protected]  / +357 22 421190

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