When entrepreneurs are asked why they have set up a company in Cyprus, the typical answer is that it is warm here and all operations are carried out strictly according to the law. However, the situation may change and at some point the entrepreneur may be faced with the need to transfer his company from a warm island to another jurisdiction. This is entirely possible with the help of the redomiciliation procedure.
Re-domiciliation became possible in 2006 when the Companies Act was amended to allow businesses to migrate from Cyprus to another country and vice versa.
This procedure can take place, provided that the laws of the foreign state allow it. Generally, business relocation to another state is permitted in 56 countries of the world. So entrepreneurs can carry out the re-domiciliation procedure and move the business to any of them.
However, until you’re still in Cyprus, you will never start moving somewhere else without the Cypriot Companies Registrar consent.
In order to relocate a company from Cyprus to another jurisdiction, you should:
- Seek the consent of the Registrar of Cyprus Companies,
- Let the authorities of another jurisdiction know about the transfer.
The first you need to do is draw up a statement to the Registrar and indicate the estimated date of re-domiciliation. But this is only the beginning of the procedure.
In order to get the Registrar’s permission, a number of conditions must be met.
First, the company shareholders have to agree to re-domicile from Cyprus. For this, a special resolution must be drawn up, which must be adopted at a general meeting of shareholders. The latest version of the interim financial statements should also be presented to the meeting. After that, the adopted resolution and financial statements are submitted to the Registrar.
Second, the company needs to document its solvency and submit it to the Registrar.
All taxes and customs duties to the Cypriot authorities must be paid, as well as all costs associated with the application for redomicilation. Supporting documents on payment must be provided to the Board of Directors for review.
All documents are to be prepared in Greek language!
The company decision approving the redomiciliation process has to be published in two local media. After a positive decision is made, the company will be removed from the records, provided that there are no objections from third parties.
Such removal is not a liquidation and does not affect the assets of the company, nor any obligation in relation to the company.
Moving in the Right Direction
If you decide to move to another jurisdiction, then, depending on your needs, you may consider moving the company to Seychelles, if you do not need an actual business presence, or in jurisdictions such as the UAE, with the possibility of establishing a full physical presence
If we take into account the desire of regulators for greater transparency and the actual presence of the company in the country of registration, it becomes clear that moving companies in jurisdictions with low or zero requirements for economic presence is a temporary or inefficient solution.
Redomiciliation is in many cases the most attractive and easily implemented solution as one of the methods of tax optimization. However, in order to reorganize a legal entity in another state, one should be aware of many factors that exist in the legal field of that country. Experienced legal advisors from IQ Decision UK will help carry out the procedure of re-domiciling your company in the new state in full compliance with the law. We will provide comprehensive legal advice in the matter of transferring a company from Cyprus to another jurisdiction.
To clarify the details, you can order an individual consultation on re-domiciliation of a Cyprus company. Contact us by filling out the form on the website.