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Re-domiciliation of foreign companies to Cyprus
Foreign companies that are established and operating abroad that consider changing their seat, have the choice to re-domicile to Cyprus and continue their operations uninterrupted as a Cyprus registered company and benefit from the advantages Cyprus, as a European jurisdiction, has to offer.
The purpose of this brochure is to provide a summary as to why a foreign company may consider moving its seat to Cyprus and the procedure of re-domiciliation that needs to be followed, as per the Law.
B. WHY RE-DOMICILE YOUR FOREIGN COMPANY TO CYPRUS
Cyprus’ services-oriented economy, with years of experience in servicing international clients, is one of the top business centres in Europe. International clients can benefit from the skills and knowhow obtained from lawyers and accountants from their many years of practice in the services sector.
Cyprus’ legal system is based on English common law, one of the most reliable and respectable legal systems worldwide.
The Cyprus Tax System has evolved to comply with all EU and OECD BEPS requirements while still maintaining its attractiveness. The corporate tax rate is set at 12.5% on net profits, however, specific types of income are fully exempt from taxation, such as:
- dividend income
- profit from sale of shares
- foreign exchange differences (unless a company is involved with the trading in foreign currencies or foreign currency derivatives).
- dividends
- interest
- royalties
- Resolution by the Shareholders or a similar document issued by the appropriate body according to the laws of the foreign country, authorizing the foreign company to get registered in Cyprus as a continued legal body. This resolution must be issued in accordance with the laws of the foreign country and must be made apostil.
- Notification letter (official notice) to the Commercial Register of the country of incorporation about the intention of the company to be re-domiciled to Cyprus.
- The new Memorandum and Articles (M&A) of the company which M&A must meet the requirements of the Cyprus laws.
- Certificate of good standing duly made apostil issued by the appropriate foreign authority;
- An affidavit made by a director duly authorized by the board of directors of the foreign company confirming the following:
- The current company name of the foreign company and the name under which it will continue its existence in Cyprus; An application must be filed with the Registrar of Companies to receive approval of the desired name; The application can be for the same company name as the foreign company was initially registered;
- The country of Jurisdiction where the foreign company is registered;
- Date of registration of the foreign company;
- The resolution specified above authorizing the registration and continuation of the existence of the Foreign Company in Cyprus;
- That the foreign company gave a notification letter (official notice) according to the laws of the country of jurisdiction as to its decision to be re-domiciled to Cyprus. Evidence of such notice must be attached and the relevant letter also;
- That no criminal or administrative procedures have been commenced against the foreign company for infringement of the law of the country of registration
- Affidavit as to solvency by a duly authorized director of the foreign company confirming the financial good standing and solvency of the foreign company. Relevant declaration to be signed and the signatories to declare that they do not know of any facts that may impair the solvency of the foreign company for the next 12 months from the application.
- List of directors and secretary and/or the managers of the foreign company as the case may be;
- List of the shareholders / members of the foreign company;
- Legal Opinion to be issued by a lawyer / Notary in the country of incorporation confirming among others that:
- The country of foreign jurisdiction allows such an application for re - domiciliation;
- The proper number of shareholders or other necessary persons as defined by the foreign law have given their consent for this application.
- The prospectus of the foreign company, once the shares have been offered to the public;
- If it is listed in any Stock Exchange, evidence of consent of the Foreign Stock Exchange allowing re-domiciliation in Cyprus must be provided;
- List of present shareholders duly certified.
- Is considered as a legal person duly incorporated according to the Laws of Cyprus and that is temporarily registered in the Republic for the purpose of the Companies’ Law Cap 113;
- Has the same liabilities and is eligible to exercise all powers that registered companies have according to the Laws of Cyprus;
- The constituent document of amendment is considered as the Memorandum of the company and where applicable as its the Articles of Association.
- The registration of the foreign company is not lawful and is void if it is done:-
- For the purpose of establishing a new legal entity;
- To damage or affect the continuance of the foreign company as a legal body;
- Τo affect the property of the foreign company and the way this company will maintain its assets, rights and obligations;
- To render ineffective any legal or other procedures filed or to be filed against the foreign company;
- To acquit or prohibit from any conviction, judgment, opinion, debt, order or liability against the Foreign Company or its officials or shareholders.
- Delete the name of the foreign company from the registry and advise the country of relevant jurisdiction accordingly;
- Give three months extension to present the necessary documents to his satisfaction. No other extension can be given.
- When dissolution proceedings have been started against the foreign company;
- A liquidator or receiver or special administrator of its property has been appointed;
- An order or judgment exists limiting the rights of its creditors;
- Procedures have been started for infringement of the law of its jurisdiction.