RE-DOMICILIATION OF A CYPRUS COMPANY OUT OF CYPRUS
Re-domiciliation of companies in and out of Cyprus became possible on the 28th July
2006, when the House of Representatives enacted the Law 124(I)/2006 which amended
the Companies Law Cap. 113 and made the transferring of the seat of a company to and
from Cyprus possible.
This article focuses on the re-domiciliation of a Cyprus company out of its jurisdiction.
The applicable law, the Cyprus Companies Law Cap. 113 (the “Law”) section 354, is
clear that in order to re-domicile a Cyprus company out of its jurisdiction the Cyprus
Company must (a) obtain the consent of the Registrar of Cyprus Companies and, (b)
apply to a foreign country to continue its existence under the jurisdiction of that country,
provided the laws of that country allow it.
Obtaining the consent from the Cyprus Registrar of Companies
The procedure for obtaining the consent to re-domicile out of Cyprus from the Registrar
of Companies is rather simple.
Firstly, there is a pre-requisite that the company’s memorandum and articles of
association contain a provision allowing the company to change its seat and re-domicile.
If this is not provided in the Memorandum and Articles of Association of the company
then the company must amend them as per the provisions of the law.
If the company’s memorandum and articles of association do contain the power of the
company to re-domicile then, an application must be prepared and submitted together
with a statement signed by two directors of the company (or in the case where there is
only one director then to be signed by that one), which according to section 354IA of the
Law must contain the following information:-
(i)
The Name, Registration number and address of the registered office of the
Cyprus Company;
(ii)
The nature of the activities of the Company;
(iii) The proposed Continuing Name outside Cyprus;
(iv) The Country or jurisdiction where the Company intends to continue;
(v)
The name and address of the relevant Overseas Authority;
(vi) The date that it is proposed to establish the seat of the company at the foreign
country.
Apart from the above though, in order of the Cyprus Registrar of Companies to approve
the continuation of the company at another country, it must be satisfied that:-
(a) the application for re-domiciliation was approved by a special resolution of the
company members;
(b) the special resolution also approved the interim financial statements that were
presented before the general meeting, showing the market value of the assets of
the company ;
(c) that the said special resolution and interim financial statements have been filed at
the Registrar of Companies’ office according to Section 354 IB(a) of the Law;
(d) that a statement of solvency was submitted to the office of the Registrar of
Companies signed by two directors (or in the case where there is only one
director then to be signed by that one) attesting that the directors are not aware
of any matters that may negatively affect the solvency of the company within a
period of three years
Each director of the company which will swear the affidavit without being
aware of facts of which he should have been aware of in order to justify the
affidavit, will be guilty of an offence punishable with one year’s imprisonment
or a fine not more than CYP20,000 (approx EUROS34,200).
(e) documents from relevant Authorities were filed confirming that the Company
does not owe any taxes and customs duties according to Section 354 IB(1) (h);
(f)
in case that the company is carrying out in Cyprus or from Cyprus activities
which requires specific permit, that a consent of the relevant authority for the
continuation of the company abroad was presented to the Registrar of
Companies.
(g) An approval from the relevant Cyprus supervisory or regulatory authority for
continuance of the Company outside the Republic has been submitted (where
applicable);
(h) where the Company has listed its shares on the stock exchange, that a Consent
from the Stock Exchange of the Cyprus Council of Securities and Exchange
Commission has been obtained and submitted (where applicable);
(i)
the consent from the Cyprus Securities and Exchange Commission was obtained
and submitted (where applicable);
(j)
a Statement in lieu of prospectus or corresponding document for public
companies according to Section 354 IB(1)(D) was prepared and submitted.
(k) That all relevant fees in relation to the application for re-domiciliation have been
paid;
(l)
That there are no pending court cases or liquidation procedures against the
company and that,
(m) All taxes and duties have been paid by the company.
If any of the above is pending during when the company is making the application for redomiciliation, then the company must finalise it in order for its application to continue.
De-registering the Cyprus company from the records of the Cyprus Registrar of
Companies
In addition to the requirements mentioned above, the Company must publish a notice of
the special resolution in two daily newspapers; proof of the publication must be filed at
office of the Registrar of Cyprus Companies within fourteen days from the date of the
publication.
Upon the receipt of the publications, the Registrar will allow three months before deleting
the company from its records so that any company creditor will have time to submit an
objection to the court for the continuation of the company abroad if s/he so requires. The
Court has the power to approve the continuation of the company or prohibit it.
After the elapse of three months, if there is no objection and provided that all
requirements and documents mentioned above are met and submitted, the Cyprus
Registrar of Companies will eventually give its consent for the re-domiciliation of the
Cyprus company to a foreign country.
The company then must provide to the Cyprus Registrar of Companies a copy of the
Certificate of Continuation issued by the foreign Registry, and finally the Registrar will
delete the name of the Cyprus Company from its Registry and will issue a Certificate of
Deletion.
It is noted that the Cyprus Registrar of Companies retains a record of all the companies
for which the Registrar gave its consent to continue in another country, the record
containing all the relevant details.
By Andria Thrasyvoulou (Associate) at Michael Kyprianou & Co. LLC