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Redomiciliation

Redomiciliation is the legal process by which a company transfers its registered office to another jurisdiction. Unlike dissolving a company in one country and incorporating a new one in another, redomiciliation offers a seamless transition, preserving the company’s legal identity, history, assets, liabilities, and contractual relationships.

In accordance with the Cyprus Companies Law, Cap. 113 (the “Law”), the re-domiciliation procedure permits:

• Foreign companies to transfer their registered office from their jurisdiction to Cyprus (“Transfer In”); and
• Cyprus companies to transfer their registered office to foreign jurisdictions (“Transfer Out”).

Transfer in

Phase 1: Preliminary Eligibility and Preparation

In order for a foreign company to transfer its registered office to Cyprus, certain fundamental prerequisites must be considered:

1. The laws of the country in which the foreign company is registered must allow for redomiciliation. Thus, a legal opinion from the foreign jurisdiction confirming that outward redomiciliation is permitted may be obtained;
2. The foreign company’s Memorandum and Articles of Association (or equivalent constitutional documents) must contain a provision that allows the company to redomicile to another jurisdiction. If there is no such provision, the documents must be amended accordingly prior to redomiciliation;
3. If the foreign company undertakes licensed activities, it must obtain consent from the relevant regulatory authority in its home jurisdiction and be prepared to meet the licensing requirements in Cyprus;
4. Importantly, Cyprus law does not recognize bearer shares. Therefore, the share capital of the company will have to be registered shares; and
5. The name of the company under which it will continue in Cyprus needs to end with the word “Limited”. Therefore, an application will be made in advance to the Cyprus Registrar of Companies to obtain approval of the proposed name.

Phase 2: Application to the Cyprus Registrar of Companies

Once the proposed name has been approved, the relevant application (ME 1) needs to be submitted at the Cyprus Registrar of Companies accompanied by the following documents, in accordance with section 354C of the Law:

1. Resolution by the board of directors or shareholders of the foreign company authorizing inter alia the redomiciliation in Cyprus;
2. A copy of the company’s constitutional documents, amended to be fully compliant with the provisions of the Law;
3. A shareholders resolution approving the new Memorandum and Articles of Association of the foreign company as the new corporate documents of the company when registering in Cyprus (if applicable);
4. Certificate of Good Standing (or equivalent) of the foreign company, issued by the competent authority of the country or jurisdiction in which the foreign company was incorporated;
5. Declaration of solvency which needs to be signed by a duly authorized director of the foreign company confirming inter alia that (i) a notification has been made to the foreign authorities; (ii) no administrative or criminal proceeding have been initiated against the foreign company for infringement of the laws of the foreign country in which it was incorporated; (iii) the company is solvent; and (iv) they are not aware of any circumstances which could adversely affect the foreign company in a material way within a 12-month period beginning from the date of submission of the application to the Cyprus Registrar of Companies.
6. details of the director(s) and secretary of the foreign company;
7. details of the present shareholders of the foreign company certified in such a way as the Registrar may require;
8. Declaration of solvency of the foreign company authorized by the Board of Directors, confirming:

(i) the name of the foreign company and the name under which it will continue;

(ii) the jurisdiction under which the foreign company is incorporated;

(iii) the date of incorporation of the foreign company;

(iv) the resolution by which the foreign company has resolved the redomiciliation in the Republic of Cyprus;

(n) that the foreign company has given formal notice to the authority of its country of incorporation of its decision to register as a continuing company in the Republic:

(vi) that no administrative or criminal proceedings have been initiated against the foreign company for violation of the laws of the country or jurisdiction in which it is incorporated.

In case of a foreign public company, it shall submit, in addition to the documents specified above, the following:

1. If the foreign company has offered its shares or bonds to the public, the most recent invitation to registration or equivalent document;
2. if the foreign company is a company whose shares are listed on a recognised stock exchange, it shall provide proof of the consent of the relevant authorities of that recognised stock exchange for the registration of the foreign company as continuing in the Republic of Cyprus. For the purposes of this paragraph, ‘recognised stock exchange’ means a stock exchange recognised by the competent authorities;
3. data of the present members of the foreign company.

Phase 3: Finalization and Permanent Status

The Registrar will examine the application and once satisfied, will issue a temporary certificate of continuation (the “Temporary Certificate of Continuation”). At this stage, the company will be considered a legal person in Cyprus and will be provisionally registered as a company continuing in the Republic of Cyprus, subject to all obligations and powers under the Law.

Following the issuance of the Temporary Certificate of Continuation, and within a period of 6 months, the foreign company will need to submit proof to the Registrar that the company has been de-registered from the foreign jurisdiction of its incorporation (ME4 form). Thereafter, the Registrar will proceed to issue a Certificate of Continuation (“Certificate of Continuation”), confirming that the company has been registered as continuing in the Republic.

If no such evidence is submitted, the Registrar of Cyprus Companies may delete the name of the foreign company from its registry and inform the foreign authorities accordingly or to grant an extension of further three months for submission of the evidence.

Transfer Out

A Cyprus company may redomicile to another country upon obtaining consent from the Cyprus Registrar of Companies and provided that the laws of the country in which the company wants to redomicile permits redomiciliation.

Phase 1: Preliminary Eligibility and Preparation

In order for a Cyprus company to transfer its registered office to another jurisdiction, certain fundamental prerequisites must be considered:

1. The national legislation of the chosen overseas country/jurisdiction allows such a transfer;
2. The Memorandum and Articles of Association of the Cyprus company must contain an express provision allowing the company to redomicile to another jurisdiction. If there is no such provision, the Cyprus company will need to amend its Articles of Association to include such provision;
3. If the Cyprus company is carrying out activities which require a permit/license, the Cyprus company will need to obtain consents from the relevant authorities for the continuation of the company abroad;
4. The company must ensure that it does not owe any taxes/duties/annual fees payable under the Law, nor court cases or liquidation procedures should be pending; and
5. All applicable annual returns must be submitted to the Registrar of Companies.

Phase 2: Application to the Cyprus Registrar of Companies

Once eligibility is confirmed, the application form (ME 2) must be submitted along with a comprehensive set of documents to the Cyprus Registrar of Companies. This submission is required to obtain the relevant consent from the Cyprus Registrar of Companies, for the continuation of the Cyprus company in another jurisdiction.  Key Documentation Includes:

1. Declaration of solvency (ME2 Form), confirming the solvency of the company and that the directors are not aware of any circumstances that could adversely affect the solvency of the company within a period of three years. This declaration must be signed by at least two duly authorized directors of the company, or if the board consists of one director, by the sole director of the company.
2. A special resolution of the company approving the said application and interim statements of the company;
3. The certified and approved interim statements;
4. Documents from competent authorities certifying that the company does not owe taxes and duties;
5. The approval / consent of the competent licensing or supervisory authority in case the company is licensed or supervised by a competent authority in the Republic (if applicable);
6. The stock market’s consent, in case the company is public and its shares are listed on a stock exchange;
7. The consent of the Cyprus Securities and Exchange Commission, if applicable;
8. Notice relating to the special resolution referred to above should be published in 2 daily newspapers of wide circulation in the Republic of Cyprus and a copy of such publications must be submitted to the Cyprus Registrar of Companies.

Phase 3: Finalization of the process

The Cyprus Registrar of Companies will review the application. If three months have elapsed after the date of the above-mentioned publications, and no creditor has raised any objections nor has the company had outstanding duties, fees, or annual returns, the Registrar of Companies will issue a certificate of approval for the transfer out.

The company will need to provide to the Cyprus Registrar of Companies the certificate of continuation issued by the competent authority of the country of choice, to enable the strike off of the company from the Cyprus register and issue a certificate of deletion (“Striking off Certificate”). At that point, the company ceases to be a registered company in 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.

Following the submission of the competent authority’s certificate of continuation, the Registrar of Companies proceeds to strike off the company from the companies register, issue the certificate of strike off and make the relevant publication in the government’s gazette.

For further information on this topic please contact AMG Mylonas & Associates, LLC by telephone +357 25 101080 or by e-mail [email protected]

Disclaimer

This publication has been prepared only as a general guide and for information purposes. It does not constitute or should not be read as a legal advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication.