Redomiciliation of Companies to and from Cyprus

The Cyprus Companies Law Cap 113 (the “Law”) has been amended by Companies (Amendment) Law of 2006, Law No. 124(I)/2006) so as to allow the redomiciliation of foreign companies into Cyprus and of Cyprus companies out of Cyprus, without such companies losing their corporate identity while ensuring their business continuity.

Cyprus is one of the very few countries allowing the redomiciliation of non-European Union companies into the Republic of Cyprus, making Cyprus a very lucrative business destination.

A. Redomiciliation in Cyprus

For redomiciling a non-Cyrus company to the Republic of Cyprus in order to enjoy all the advantages a Cyprus-registered company has, the following procedure is to be followed:

Procedure

A foreign company may apply to the Cyprus Registrar of Companies to transfer its registered office in the Republic of Cyprus, if:

1. its Memorandum specifically provides for this;
2. if the laws of a country or jurisdiction so permit; and
3. upon having obtained the prior consent from the foreign competent authorities.

As a result, certain matters should be preliminary considered prior to making the application for redomiciliation:

• the laws of the jurisdiction of the non-Cyprus company allow the redomiciliation of the non-Cyprus company in order to continue its existence as a company registered in Cyprus.
• The Memorandum and Articles of Association (or the equivalent incorporation documents) of the non-Cyprus company must contain provision that allows the continuity of the non-Cyprus company to another jurisdiction. If the incorporation documents of the non-Cyprus company do not contain such continuity provision, then such incorporation documents must allow or be able to be amended in order to include such continuity provision.
• In case a non-Cyprus company carries out a licensed activity in the foreign jurisdiction, for the purposes of the redomiciliation application it must provide evidence of the license, as well as satisfy the Cyprus licensing criteria (if any) and obtain the relevant license or permit from the relevant competent authorities in Cyprus before commencing any licensable business activity that requires such license or permit.
• Prior to the application, the existing name of the non-Cyprus company should include the word “limited” at the end. If not, then it cannot continue in Cyprus under the same name. Therefore, prior to the redomiciliation application, potential names should be chosen under which the non-Cyprus company will continue its existence in Cyprus. Once the application for the approval of names is approved, the name approval will be valid for a six (6) month period. In addition, the Cyprus Registrar of Companies may require the non-Cyprus company to change its name if the Registrar is of the opinion that it conflicts or is confusing or is misleading in relation to a name already registered in the Cyprus Registrar of Companies or with a registered trademark.
• Cyprus law does not recognize bearer shares. As a result, the authorized share capital of the non-Cyprus company following its redomiciliation in Cyprus will have to be registered shares.

PRIVATE COMPANY

The following steps need to be taken:

1. Application for the approval of name of the non-Cyprus company before the Cyprus Registrar of Companies.
2. Application for redomiciliation in Cyprus.
3. The documents necessary to be filed with the Cyprus Registrar of Companies are the following:

• • Resolution by either the board of directors or shareholders of the non-Cyprus company approving the non-Cyprus company to be registered in Cyprus as a continued legal body. Such resolution must be issued in accordance with the laws of the jurisdiction of the non-Cyprus company and to be apostilled. The resolution should state the following:
    • That the non-Cyprus company intends to transfer its registered office to Cyprus and continue its existence in Cyprus
    • The current name of the non-Cyprus company and the name under which it intends to continue its existence in Cyprus
    • The jurisdiction under which it is registered and the date of incorporation
    • That it has duly notified (in accordance with the laws of the country of its jurisdiction) the competent relevant authorities of its jurisdiction of its wish to continue its existence in Cyprus and attach proof/copy of the official notification
    • That there are no administrative or criminal proceedings against the non-Cyprus company in the jurisdiction in which it is incorporated.
    • That the non-Cyprus company it is solvent and that there are no matters or circumstances which may negatively affect the solvency of the non-Cyprus company in a substantial manner within a period of twelve (12) months from the date of the submission of the redomiciliation application.
    • Granting authority to the new Cyprus director to swear the affidavits (as per below) in Cyprus and file the necessary documents.
  • A shareholders resolution must be adopted as “special resolution” under Cyprus law (passed with a majority of 75% of the shareholders at a general meeting with 21 days’ notice) for adopting the new Memorandum and Articles of Association of the non-Cyprus Company as the new corporate of the company when registering in Cyprus.
  • A sworn affidavit made by an existing director duly authorized by the board of directors of the non-Cyprus company, that should contain the following:
    • The current name of the non-Cyprus company and the name under which it intends to continue its existence in Cyprus
    • The jurisdiction under which it is registered and the date of incorporation
    • The resolution specified above approving the non-Cyprus company to be registered in Cyprus as a continued legal body.
    • That the non-Cyprus company has duly notified (in accordance with the laws of the country of its jurisdiction) the competent relevant authorities of its jurisdiction of its with to continue its existence in Cyprus and attach proof/copy of the official notification
    • That there are no administrative or criminal proceedings against the non-Cyprus company in the jurisdiction in which it is incorporated

• • A sworn affidavit made by an existing director duly authorized by the board of directors of the non-Cyprus company confirming that non-Cyprus company it is solvent and that there are no matters or circumstances which may negatively affect the solvency of the non-Cyprus company in a substantial manner within a period of twelve (12) months from the date of the submission of the redomiciliation application. NOTE: a director of the non-Cyprus company providing false declaration or making a false declaration as to the solvency of the non-Cyprus company or making a sworn statement without being aware of the facts of which he/she should have been aware of in order to justify the content of the sworn statement, will be liable to a crime and in case of conviction liable to imprisonment up to one (1) year and a fine not more than € 34,172.00.
  • Copy of the official notice to the competent relevant authorities and Commercial Register of its jurisdiction of its wish to continue its existence in Cyprus
  • Copy of the official letter by the abovementioned authorities consenting to the change of the registered office of the non-Company and its redomiciliation in Cyprus
  • Copy of the revised constitutional documents / Memorandum and Articles of Association of the non-Cyprus company – the revised constitutional documents must meet Cyprus law requirements
  • Non-Cyprus Certificate of good standing (or equivalent) from the country of origin, that should be apostilled
  • List of directors, shareholders and secretary and/or managers of the foreign company (in the form of certificate/s issued from the responsible authority in the country of origin, or, if not applicable, in the form of a certificate by the company secretary)
  • Document proving that a redomiciliation application is allowed under the laws of the country of incorporation. Such document can be a confirmation letter by the relevant authority in the country of incorporation or a legal opinion by a qualified person such as lawyer / notary in the country of incorporation.

The legal opinion should confirm the following:

1. The laws of the country where the non-Cyprus company is registered allows for application for redomiciliation to be made
2. The proper number of shareholders or other necessary persons as defined by the laws of the country where the non-Cyprus company is registered have given their consent for this application

• • Official consent of the competent authority (which has granted license to the non-Cyprus company in the foreign jurisdiction to carry out a licensable business activity) for redomiciliation of the non-Cyprus company. The non-Cyprus company, following the redomiciliation in Cyprus, it should obtain the relevant license or permit from the relevant competent authorities in Cyprus before commencing any licensable business activity that requires such license or permit.
  • Evidence from the non-Cyprus company that there are no employees, creditors or any other party who could object to the transfer of the registered office.
  • Any other documents which the Cyprus Registrar of Companies may deem necessary in order to be satisfied that (a) the jurisdiction where the non-Cyprus company is incorporated permits such an application for re-domiciliation and (b) the consent for the re-domiciliation has been granted by such number of members, employees and/or creditors as required by the laws of the country of incorporation of the non-Cyprus company.

PUBLIC COMPANY

If the non-Cyprus company is a public company, in addition to the documents above that apply for private companies, the following documents must be submitted to the Cyprus Registrar of Companies:

• The most recent invitation if the non-Cyprus company has offered via invitation its shares or bonds to the public.
• If the non-Cyprus company is a company with its shares listed at a recognised stock exchange, a copy of the consent by the relevant authorities of the stock exchange where the shares are listed to continue its existence in Cyprus.
• Duly certified register of the existing members of the non-Cyprus company.

Application Process and Registration

A lawyer or a Cyprus resident director acting as authorised representative of the non-Cyprus company must be appointed in order to appear at Cyprus courts to sign the affidavit (form MEA) and the application for the continuation of the non-Cyprus company in the Republic of Cyprus (form ME1) in order to be filed to the Cyprus Registrar of Companies along with the aforementioned required documents.

Registration in the Republic of Cyprus

Upon examining the documents and the forms, the Cyprus Registrar of Companies, if satisfied that the redomiciliation application complies with the provisions of the Law, will temporarily file these and issue a Temporary Certificate of Continuation, and provisionally register the non-Cyprus company as a company continuing in Cyprus as of that date appearing on the Temporary Certificate of Continuation. From that date, the non-Cyprus company will be considered as legal person duly incorporated according to the laws of Cyprus, will be subject to all obligations and liabilities under the Law, be eligible to exercise all powers that registered companies have according to laws of Cyprus and have the constituent document of amendment considered as the Memorandum of the company and where applicable, as its Articles of Association.

Time Limit and issuance of Temporary Certificate of Continuation

Following the issue of the Temporary Certificate of Continuation, the non-Cyprus company must submit to the Cyprus Registrar of Companies a declaration (form ME4) accompanied with a notarized and apostilled certificate or other document from the competent authority of the country or jurisdiction of the non-Cyprus company’s original incorporation, that the company has ceased being registered in the said country or jurisdiction and any other document evidencing that the said company has ceased being registered in the country or jurisdiction of its incorporation (De-Registration Certificate).

NOTE 1: the non-Cyprus company must not be removed/cancelled from the foreign registry before the Cyprus Registrar of Companies issues the Temporary Certificate of Continuation. Therefore, the application to cancel its registration in the foreign registry must only take place after the Temporary Certificate of Continuation has been issued.

NOTE 2: Failure by the company to procure evidence of deregistration within the aforementioned six (6) month period, the Cyprus Registrar of Companies may (1) delete the name of the non-Cyprus company from the register and inform the foreign authorities that the non-Cyprus company has not been registered in Cyprus; or (2) grant an extension of further three (3) months for submission of the requested evidence, if there is a reasonable cause for delay. There is no possibility for further extension following the end of the three (3) month period, after the end of which deletion and notification will result, as described above.

Final Certificate of Continuation

Following submission of the form ME4, the De-Registration Certificate and the Temporary Certificate of Continuation, the Cyprus Registrar of Companies will issue the permanent Certificate of Continuation. The Certificate of Continuation is a confirmation that the company has been registered as a company continuing in Cyprus and, any previously issued certificates cease to have any legal effect. The registration number of the company is set out on the Certificate of Continuation.

B. Redomiciliation out of Cyprus

A company, which was incorporated in the Republic of Cyprus, may, if the law of a country or jurisdiction permit, transfer its registered office outside the Republic with the purpose of continuing to operate under the other jurisdiction’s legal regime, without having to be dissolved. Such transfer can take place if:

1. The company has obtained the consent of the Cyprus Registrar of Companies; and
2. it has submitted an application to the competent authority of that country or jurisdiction in which it was to transfer its seat, as long as the laws of such country or jurisdiction permit such transfer.

Procedure

For redomiciling a Cyprus company outside of the Republic of Cyprus, certain matters should be preliminary considered:

• The Memorandum and Articles of Association of the Cyprus company (M&AA) must contain provision that allows the transfer to and continuity of the Cyprus company to another jurisdiction. If the M&AA of the Cyprus company do not contain such provision, then such M&AA must allow or be able to be amended in order to include such provision.
• The laws of that country or jurisdiction that the Cyprus company wishes to redomicile there, must allow for the Cyprus company to transfer its registered office and continue to operate as a company registered in that jurisdiction.
• The Cyprus company must check with the relevant competent authority of the country or jurisdiction to which it wishes to relocate whether the name the Cyprus company proposes to use in that foreign jurisdiction upon continuation is available.
• In case a Cyprus company carries out an activity within or from Cyprus that requires a license or a permit from a competent authority, for the purposes of the redomiciliation application it must provide to the Cyprus Registrar of Companies proof of consent from that relevant competent authority for the transfer outside of Cyprus.
• The Cyprus company must not have any annual returns that have not been submitted with the Cyprus Registrar of Companies and it needs to ensure that no payments are owed regarding annual levies, fees and any other sums payable under the Law.

PRIVATE COMPANIES

To obtain the consent of the Cyprus Registrar of Companies for the continuation of the Cyprus company outside the Republic of Cyprus, the following documents need to be prepared and submitted:

• Application for the continuation of the Cyprus company outside the Republic of Cyprus (form ME2) accompanied by the following documents:
  • Board resolution approving the redomiciliation procedure conditional upon the shareholders’ approval as well as the execution of by the director(s) of various documents that will be submitted to the Cyprus Registrar of Companies along with the application.
  • An approved special resolution of the company’s shareholders, authorizing the application as well as the execution by the director(s) of various documents that will be submitted to the Cyprus Registrar of Companies along with the application and approving the company’s interim Financial Statements and accounts. Before the special resolution/general meeting of the members, the directors must have present interim Financial Statements and accounts showing market value of the company’s assets and the accounts of the previous and current year.
  • The certified and approved interim Financial Statements and accounts, approved by the shareholders and auditors of the company
  • A completed and properly signed solvency statement (form ME3) signed by at least two (2) directors of the company, duly authorised by its board of directors, or in the event whereby the company has only one (1) director, by one director where it needs to state that the directors are not aware of any matters that may negatively affect the solvency of the company within a period of three (3) years. NOTE: Each director of the company that will make the solvency statement without being aware of facts of which he/she should have been aware of in order to justify the solvency statement, will be liable to a crime and in case of conviction liable to imprisonment up to one (1) year and a fine not more than € 34,172.00.
  • Documents from competent authorities certifying that the company does not owe taxes and duties or that will become due until the date of submission of the application (e.g. tax, VAT and Social Insurance clearance certificates)
  • Approval / consent of the competent licensing or supervisory authority in case the company is licensed or supervised by a competent authority in the Republic of Cyprus as well as consent by the equivalent competent licensing or supervisory authority in the country of transfer.
  • The consent of the Cyprus Securities and Exchange Commission, if applicable
  • A statement/affidavit for the transfer of a company’s registered office outside the Republic of Cyprus signed by at least two (2) directors of the company, duly authorised by its board of directors, or in the event whereby the company has only one (1) director, by one director, confirming the following:
    • the name of the company under which registration is requested in the approved country or jurisdiction
    • the place of the proposed registration of the company and the name and address of the competent authority in the approved country or jurisdiction
    • the date on which the corporate seat of the company is proposed to be established in the particular approved country or jurisdiction

It is also noted that, the company is required by law to proceed with the publication of the notice of the special resolution in two (2) daily newspapers of wide circulation in the Republic of Cyprus and to send a copy of the publication to the Registrar of Companies within fourteen (14) days from the publication.

PUBLIC COMPANIES

If the company is a public company with its shares listed in a recognized stock exchange in addition to the documents that need to be submitted for private companies, the following documents also apply:

• The stock exchange’s consent, in case the company is public and its shares are listed on a stock exchange
• The consent of the Cyprus Securities and Exchange Commission, if applicable
• A prospectus or any other equivalent document for public companies

NOTE 1: There must not be any pending court cases (in or outside of the Republic of Cyprus) or liquidation procedures, settlement or compromise or procedures for the execution of court case or similar procedures from or against the company.

NOTE 2: All relevant legal provisions have been applied to inform employees about the impending transfer of the registered office of the company out of the Republic of Cyprus and all appropriate steps have been taken for the payment, where necessary, of their compensation as prescribed under Cyprus law.

Application Process and De-Registration

The application for the continuation of the company outside the Republic of Cyprus (form ME2) must be duly completed, signed and submitted on behalf of the Cyprus company to the Registrar of Companies along with the aforementioned documents as required by Law.

Until a three (3) month period from the date of publication of the notice of the special resolution has been expired, the Cyprus Registrar of Companies will not grant its consent. During that three (3) month period, objections can be raised (e.g. by a creditor) against the redomiciliation of the company out of Cyprus.

Once the Cyprus Registrar of Companies has reviewed the application and the submitted accompanied documentation and provided that:

1. The three (3) month period has expired; and
2. No objections were raised against the redomiciliation during the three (3) month period; and
3. All fees/duties/annual returns of the Cyprus company have been submitted and taken care of

the Cyprus Registrar of Companies will issue the certificate of consent for the continuation of the company under the national legislation of another country or jurisdiction.

Upon submission of any required documentation to the competent authority of the country of choice that the Cyprus company proposes to redomicile, the foreign competent authority will issue a Certificate of Continuation.

Once the Certificate of Continuation is issued by the competent authority of the country of choice, the company shall deliver to the Registrar of Companies copy of the said Certificate of Continuation, accompanied by its certified translation, either by an affidavit or by sworn translator of the Republic of Cyprus.

It is noted that the certificate of continuation must be an authentic true copy from the country of incorporation, legalized by the competent foreign authority with an annotation of the Hague Convention (apostille) on the original foreign language document. In the event that the country of incorporation does not participate in the Hague Convention, then the document’s legalisation must be carried out by the relevant competent authority.

The Certificate of Continuation

Following the submission of the foreign competent authority’s Certificate of Continuation, the Cyprus Registrar of Companies proceeds to strike off the company from the companies register, issue the Strike Off Certificate and make the relevant publication in the Cyprus Government’s Gazette.

Once the transfer of the company’s registered office (re-domiciliation) outside the Republic of Cyprus is in force, the company ceases to be considered as a company registered in the Republic of Cyprus.

Finally, the Strike Off Certificate will be sent to the foreign competent authority in order to finalize the redomiciliation process in the country of choice where the company has chosen to redomicile.

Please feel free to contact us for a free consultation if you have any question and to discuss how we can be of assistance to you.

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PARIS MAVRONICHIS & CO LLC accept no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

The material contained herein is provided for informational purposes only and does not constitute legal advice nor is it a substitute for obtaining legal advice from an advocate.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced advocate. PARIS MAVRONICHIS & CO LLC will be glad to assist you in this respect.