IN405 - The Opportunities Available Through Redomiciling a Company to Cyprus

Redomiciliation of companies in to and out of Cyprus became possible in 2006, when the House of Representatives enacted a new law which amended the Company Law. This made it possible to transfer the domicile of a company either in to or out of Cyprus.

In conjunction with the competitive tax advantages that Cyprus offers, including the lowest corporate tax rate in the EU, this law further enhanced the attractiveness of Cyprus by enabling companies to relocate existing activities.

Why Consider Redomiciling a Company to Cyprus? 

  • Cyprus has one of the lowest levels of corporation tax in the EU at only 12.5%.
  • Cyprus has a good double tax treaty network, which can help  minimise withholding taxes on dividends received.
  • As Cyprus is in the EU, a company that is established there has access to European Directives. The Parent/Subsidiary Directive reduces withholding tax on dividends from EU investee countries to zero.
  • Cypriot companies exempt dividend income from taxation.

Requisite Documentation

There is a prerequisite that the company’s Memorandum and Articles of Association contain a provision allowing the company to redomicile. If this is not provided in the Memorandum and Articles of the company, then the company must amend them as per the provisions of the law.

In order for a foreign company to redomicile to Cyprus, the following requirements must be fulfilled and the relevant documentation submitted to the Registrar of Companies:

(a) a special resolution of the company’s members approving the application for redomiciliation;

(b) a Certificate of Good Standing of the company (apostilled);

(c) a signed affidavit by a director of the company confirming:

  • the name and the jurisdiction from which the foreign company is to be incorporated;
  • the date of incorporation;
  • the proposed name of the company under which it will continue its existence in Cyprus;
  • that the foreign company has given formal notice to the authorities of the foreign country of its intention to move domicile to Cyprus;
  • that no proceedings have been commenced against the foreign company;
  • that the company is solvent;
  • that legal opinion has been obtained confirming that the move is acceptable in the foreign country.

After Dixcart has submitted the documents to the Cyprus Registrar of Companies, a Certificate of Temporary Registration will be issued. The time frame for this is between 4 and 6 weeks.

Within 6 months of the issue of the Temporary Registration Certificate, the company must present evidence to the Cyprus Registrar of Companies, that it has been deregistered from the country from which the transfer of domicile has taken place.

Additional Information:

If you require further information regarding the Cypriot corporate tax regime and the redomiciliation of companies to Cyprus, please contact Robert Homem or Mihaela Neagu.

 

Categories: Jurisdiction, Cyprus, Year, 2016