Re-domiciliation is the process through which a company transfers its place of incorporation from one jurisdiction to another while maintaining its legal identity and adapting to the new jurisdiction’s legal framework. Consequently, the company ceases to exist under the laws of the original jurisdiction. Both the departing and receiving jurisdictions must authorise such a transfer. The Cyprus Companies Law (Cap 113) not only supports re-domiciliation but also provides a detailed framework for companies that wish to relocate their legal domicile to Cyprus, thereby offering them the opportunity to capitalise on the benefits of this business-friendly environment.
Why Choose Cyprus for Re-domiciliation
Cyprus is an attractive destination for re-domiciliation, offering multiple advantages:
- Strategic Location: Situated at the juncture of three continents, Cyprus is an ideal location for businesses aiming for global expansion, providing access to a range of markets.
- Tax Benefits: The country features one of Europe’s most advantageous tax regimes, including competitive corporate tax rates and a broad array of double taxation treaties.
- EU and Eurozone Membership: This membership ensures stability and market access, enhanced by the convenience of using the Euro.
- Legal Framework: Cyprus’s legal system, rooted in English common law, offers transparency and dependability for corporate affairs.
- Talented Workforce: The nation has a highly educated, multilingual workforce, facilitating seamless business communication.
- Infrastructure: With modern facilities and advanced technology, Cyprus ensures efficient business operations.
- Business Incentives: The government provides enticing incentives and a streamlined business setup process.
- Lifestyle: A high quality of life, agreeable climate, and superior services make Cyprus a desirable location for both businesses and individuals.
Procedure for Re-domiciliation to Cyprus
A foreign company can initiate re-domiciliation to Cyprus if: (i) its charter documents, namely the Memorandum and Articles of Association, include or can be amended to include a provision for continuation in another jurisdiction, and (ii) the laws of the company’s current jurisdiction permit re-domiciliation. It is important to note that companies facing insolvency, liquidation, or similar legal proceedings are ineligible for re-domiciliation to Cyprus.
Choosing a suitable name for the company’s Cyprus operations is a crucial initial step. While the company may keep its original name subject to the Registrar of Companies’ approval, it must adopt a suffix such as “Limited” or “Ltd” if the existing name does not include one.
Since bearer shares are not acknowledged under Cypriot law, a company must convert its authorised share capital into registered shares, if that is not the case, before re-domiciliation. Furthermore, companies that undertake licensed activities must provide evidence of their original jurisdiction’s licenses and comply with all pertinent local licensing criteria in Cyprus. Public companies are required to submit additional documentation, such as approval from the stock exchange where they are listed, if applicable.
The re-domiciliation process necessitates the submission of an application along with various supporting documents to the Registrar of Companies. These documents include:
- Corporate resolutions authorising the company’s continuation within Cyprus.
- Confirmation that re-domiciliation is lawful under the laws of the company’s current jurisdiction.
- Official notice to the competent authority in the country of incorporation regarding the company’s re-domiciliation intentions.
- A certificate of good standing or an equivalent document issued by the competent authority of the country of jurisdiction in which the company was incorporated.
- A director’s affidavit asserting the company’s solvency.
- Comprehensive information about the company’s directors, secretaries, and shareholders.
- Amended Memorandum and Articles of Association to comply with Cap 113 of Cyprus law.
All pertinent documents must be translated into Greek before they are submitted.
Completion – Certificate of Continuation
Once all required documents are appropriately submitted in line with the Companies Law, Cap 113, the Registrar of Companies issues a temporary certificate of continuation. This certificate provisionally registers the company in Cyprus for a period of six months, within which it must validate its de-reregistration from the former jurisdiction. The Registrar may grant an extension if there is a reasonable justification for any delay. With this certificate, the company is authorised to conduct business under Cypriot law. Once the company provides satisfactory proof of de-registration, a final certificate of continuation is issued in Cyprus.
The company is required to apply for taxpayer registration with the Tax Department and to obtain a tax identification number within sixty (60) days from the issuance date of the certificate of continuation.
Legal Considerations for Re-Domiciling a Company
When considering re-domiciling, companies must closely consider key legal aspects including:
- Intellectual Property (IP) Laws and Protection: The company must assess the intellectual property laws in the new jurisdiction. This includes the strength and enforcement of IP rights, the process for transferring existing IP registrations, and differences in protection for various types of IP. In Cyprus, as a member of the European Union, companies benefit from robust IP laws aligned with EU standards and treaties. This includes adherence to EU regulations on IP rights, offering a high level of protection and enforcement that is consistent across the EU.
- Existing Contracts and Agreements: It is essential to review all existing contracts to determine if they have clauses affected by re-domiciling. Contracts may need renegotiation or amendment to remain valid and enforceable in the new jurisdiction.
- Transfer of Assets and Liabilities: Understanding the legal mechanisms for transferring assets and dealing with liabilities is vital. This involves the implications for creditors and debtors and ensuring that the transfer complies with both local and international laws.
Choosing re-domiciliation to Cyprus provides businesses with a strategic European base, attractive tax benefits, and a robust legal system. The legal process of re-domiciliation demands detailed attention and adherence to prescribed timelines. Our legal practice specialises in ensuring a seamless transition for your company’s re-domiciliation to Cyprus. We are ready to guide you through every step of the processes, handling all legal aspects efficiently, from the initial application to the final issuance of the Certificate of Continuation. Partner with us to strategically position your business in Cyprus’s dynamic corporate sector.
This article is for general informational purposes only and should not be construed as legal advice