Redomiciliation of Companies In and Out of Cyprus
- Redomiciliation: A Strategic Tool
- Redomiciliation Into Cyprus
- Redomiciliation Out of Cyprus
- Additional Key Considerations
- Conclusion: Seizing Strategic Opportunities
In the dynamic landscape of international business, companies often seek strategic advantages by relocating their legal domicile.
Redomiciliation is the procedure of relocating a company's registered office from one jurisdiction to another, offering businesses the flexibility to respond to evolving regulatory conditions, optimize tax frameworks, and improve operational efficiency. Understanding the complexities of redomiciliation is crucial for companies considering, inter alia, Cyprus as a potential destination.
Redomiciliation: A Strategic Tool
Redomiciliation empowers a company to transfer its registration from one country to another without dissolution, thereby preserving its legal identity, corporate history, and operational continuity. For Cyprus, redomiciliation offers an opportunity for companies to leverage its favorable business environment while navigating evolving global dynamics.
Redomiciliation Into Cyprus
Companies planning to redomicile into Cyprus must comply with several regulatory requirements to ensure a smooth transition, including the following:
- Legal Framework: The company's current jurisdiction must permit redomiciliation, to align with Cyprus Companies Law, Cap. 113.
- Constitutional Review: Reviewing the company's founding papers, including the memorandum and articles of association, to confirm the presence of written clauses permitting the company to relocate to a different jurisdiction.
- Licensing: In the event that the company engages in licensed activities (i.e., regulated activities), it must meet the local licensing requirements for the regulated activity within Cyprus.
- Share Structure: Under Cyprus law, it is required that a company's shares are officially recorded. As a result, any different share arrangements (like bearer shares) present in the foreign jurisdiction will have to be adjusted accordingly when the company is moved to Cyprus.
- Shareholder Approval: A special resolution by the Shareholders is required to authorize the foreign company to continue as a legal entity in Cyprus.
- Good Standing: A certificate of good standing for the company.
- Financial Solvency: Submission of a declaration confirming solvency and compliance with tax obligations.
-
Constitutional documents: The company's Memorandum and Articles of Association must be revised accordingly to align with the regulations stipulated in the Cyprus Companies Law, Cap. 113.
-
Company Name: The company may retain its current name or opt for a change, subject to approval by the Registrar of Companies. It is necessary to ensure that the proposed name does not conflict with existing names or trademarks, potentially causing confusion among the public. Furthermore, it is a legal requirement for the company's name to conclude with either "Limited" or "Ltd."
-
Temporary Registration: After meeting the conditions mentioned above, the Registrar issues a temporary certificate of continuation, authorizing the company to operate in Cyprus as it goes through the process of deregistration from its previous jurisdiction.
-
Final Registration: Following the receipt of the provisional certificate of continuation, the company must provide evidence from foreign authorities within 6 months, confirming its deregistration from the original jurisdiction. Upon submission of the deregistration certificate to the Registrar, the company is granted a permanent certificate of continuation, confirming its status as a registered entity operating within Cyprus.
Redomiciliation Out of Cyprus
For companies leaving Cyprus, redomiciliation procedures also require careful planning and satisfaction of specific legal requirements, such as the following:
- Corporate Resolutions: Board resolution approving the redomiciliation process and a shareholder special resolution authorizing the redomiciliation application, accompanied by interim financial statements.
- Solvency Declaration: A statement by directors confirming the company's financial stability and the absence of any factors impacting its solvency.
- Clearance Documentation: Verification of complete settlement of all fees, taxes, and duties, encompassing tax, VAT, and social insurance clearances from local authorities.
It is important to note that obtaining tax clearance certificates from the tax department can be a lengthy process, requiring careful planning and timely submission.
- Compliance Verification: Confirmation of compliance with Cyprus regulations, no ongoing legal disputes involving the company, and submission of annual financial records, including interim financial statements.
- Publication Obligations: Publication of the shareholder special resolution in two reputable local newspapers to notify creditors and interested parties.
- Registrar's Consent: The Registrar of Companies grants approval for redomiciliation only after three months from the aforementioned publication, ensuring no objections arise from creditors regarding the proposed relocation.
- Continuation Process: After receiving approval from the Registrar and submitting the continuation certificate issued by the competent authority of the foreign jurisdiction, the Registrar of Companies initiates the process of deregistering the Cyprus entity.
Additional Key Considerations
- Document Language: All submissions to the Registrar must comply with language requirements, either in Greek or as certified translations.
- Legal Opinion: Although not require by law, provision of a legal opinion from foreign lawyers, detailing the destination jurisdiction's legislation, may also be requested by the Cyprus Registrar of Companies.
- Registrar's Timeline: Registrar typically responds within a month of form submission, but additional clarifications may be requested.
- Striking Off: Once continuation documentation is received, the Registrar initiates striking off proceedings, to remove the company from the register.
Conclusion: Seizing Strategic Opportunities
Redomiciliation serves as a strategic mechanism for companies to adapt to evolving business landscapes while maintaining operational continuity. Whether entering or exiting Cyprus, adherence to regulatory protocols, transparent communication, and diligent compliance are paramount for a seamless transition. By navigating the sophisticated redomiciliation process, companies can unlock new growth opportunities while preserving corporate integrity and regulatory compliance.
| Disclaimer: This publication contains general information and should not be construed as legal advice. The REVERA legal team can advise you in detail on redomiciliation based on your specific case. |
Dear journalists, the use of materials from REVERA website in publications is possible only after our written permission.
For approval of materials please contact e-mail: i.antonova@revera.legal or Telegram: https://t.me/PR_revera
