Introduction:
A company may, if the laws of the country or jurisdiction allow, redomicile, i.e. transfer its seat of incorporation to and from a jurisdiction. Thus, the company continues to exist under the laws of another jurisdiction, into which it is redomiciled, and ceases to exist under its jurisdiction of incorporation.
The re-domiciliation process (transfer of seat) in Cyprus is governed by the Cyprus Companies Law, Cap.113 (the “Law”) which provides under sections 354 (Α)- (ΙΗ) that re-domiciliation is possible in and out of Cyprus.
Why Cyprus?
Indicatively some of the main benefits of re-domiciling a company to Cyprus include:
- The corporate tax rate in Cyprus amounts to 12.5%.
- Multiple double tax treaties between Cyprus and other jurisdictions.
- Dividend between Cyprus companies is tax exempt.
- Practical reasons such as:
- decreased maintenance costs,
- geographical proximity,
- Cyprus’ membership in the European Union and has multiple bilateral/multilateral treaties,
- access to EU markets.
Re-domiciliation of a foreign company in Cyprus
The following prerequisites apply in relation to the re-domiciliation of a foreign company in Cyprus:
- The foreign legislation should allow for re-domiciliation out of the jurisdiction (section 354 A).
- The constitutional documents of company e.g. Memorandum and Articles of Association, must allow for the continuation of the company under another approved jurisdiction (section 354 Β).
- there must be no commenced dissolution or insolvency proceedings, or any other ongoing court proceedings against the company in the outgoing jurisdiction, or any judgment or decree against the company which limit or postpone the rights of creditors (section 354 Θ).
- if the company carries out a regulated activity, outgoing licences must be provided and Cypriot licences must be applied for and obtained (section 354 Δ).
- the company should apply to the Registrar for name approval. If the Registrar considers the name stated under section 354 Γ may lead to confusion and/or is misleading, the Registrar may order that the name be amended under section 354 Ε (2).
Re-domiciliation documents
An application for re-domiciliation must be submitted to the Registrar of Companies and Intellectual Property (the “Registrar”) in Cyprus. Prior to the submission of the application, the following documents must be obtained:
- a corporate shareholders’ resolution stating the following:
- the name of the foreign company and the name by which it intends to continue in Cyprus.
- the jurisdiction and date of incorporation.
- that the foreign company intends to transfer its registered seat to Cyprus and continue in Cyprus.
- that notification has been sent to the competent authorities.
- that there are no administrative or criminal proceedings against the foreign company.
- that the foreign company is solvent and there are no circumstances, which would adversely affect, in a substantial manner, the solvency status of the foreign company within a period of 12 months from the date of submission of the application to transfer in Cyprus.
- granting authority to the new Cyprus director to proceed to swear the affidavits in Cyprus and file the necessary documents.
- A copy of the revised constitutional document, which allows the company to redomicile in Cyprus.
- Confirmation issued by the competent authority of the foreign jurisdiction stating that the latter has been duly notified in relation to the intention of the foreign company to redomicile (certificate of intent).
- A certificate of good standing.
- A sworn affidavit, declaration of solvency, made by the existing directors of the foreign company, confirm that the foreign company is solvent and there are no circumstances which would negatively affect, in a substantial manner, the foreign company’s solvency status within a period of 12 month form the date of submission of the application to transfer into Cyprus.
Once the above documentation is obtained, the statutory form ME1 must be filed with the Registrar (ME1 (companies.gov.cy).
Once the Registrar is satisfied that the application complies with the provisions of the Law, it will issue a temporary certificate of continuation (the “Temporary Certificate of Continuation”). The date of issuance of the Temporary Certificate of Continuation, will be the date of registration of the foreign company as a Cypriot company, meaning that the foreign company will now be considered a legal person incorporated in Cyprus, and will be subject to all obligations under the Law, and will be capable of exercising all the powers of a company incorporated in Cyprus.
Following the issuance of the Temporary Certificate of Continuation the foreign authorities will have a period of 6 months to submit proof to the Registrar that the company has been de-registered from the foreign jurisdiction (the “Certificate of de-registration”).
The Certificate of de-registration is filed with the Registrar and the company is issued with a permanent certificate of continuation from the Registrar. This certificate confirms that the company has been registered as a company continuing in Cyprus
The re-domiciliation (transfer of the corporate seat) of a company and the adoption of the legal status of a company existing under the laws of Cyprus will not result in the foreign company ceasing to exist or losing its legal personality, and the company’s existence and legal personality will be preserved intact throughout and following the transfer of the corporate seat of the company and the adoption of the legal status of the company organised and existing under the laws of Cyprus.
Why Oshkosh?
- Oshkosh is very experienced in re-domiciliation exercises both into and out of Cyprus.
- Due to our extensive experience, we can ensure that the whole process is expedited.
- Local authorities are well-versed with the prescribed procedures and typically the process is smooth while the vast majority of our cases are successful.
- The total timeline for such a transfer to be implemented is in the range of 6-9 months, assuming all clearances are obtained on time and no objections are raised.
For any further inquiries reach out to oshkosh@oshkoshlimited.com.
