Transfer of the registered seat of companies from / to the Republic of Cyprus

By: Antria Aristodimou, PARTNER │ HEAD OF CORPORATE DEPARTMENT @ A. Karitzis & Associates LLC

Understanding the Procedure for Cross-Border Company Seat Transfers: A Comprehensive Guide

A company may, for different business or other reasons, decide to transfer its seat to a country and/or jurisdiction other than the country and/or jurisdiction in which such company has been incorporated and/or currently exists.

However, according to the relevant applicable legislation, the main legislative instrument of which is the Companies Law, Cap. 113 (the “Law” or “Cap. 113”), the procedure to be followed for the transfer of the registered seat of a company mainly depends on the country/jurisdiction the company would like to transfer its seat to in the event of transferring the registered seat of a company outside the Republic of Cyprus or the country/jurisdiction where the company currently has its seat in the event of transferring the registered seat of a company incorporated abroad to the Republic of Cyprus, as the case may be.

The procedure for transferring the registered seat of a company from a European member state to the Republic of Cyprus or vice versa is referred to as, and governed by the rules for, ‘cross-border conversion’ (“Cross-border Conversion”), defined as “an operation whereby a company, without being dissolved or wound up or going into liquidation, converts the legal form under which it is registered in a [European] Member State into a legal form of the destination [European] Member State […] and transfers at least its registered office to the destination [European] Member State, while retaining its legal personality.”

In this respect, it is worth stressing that the Cross-border Conversion was only introduced in Cap. 113 by virtue of the Amending Law No. 3 of 2024 to Cap. 113 (Law 26(I)/2024), incorporating the Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers, and divisions (the “EU Directive 2017/1132”).

In the course of the completion of a Cross-border Conversion involving the Republic of Cyprus, the procedure is further differentiated depending on whether the Republic of Cyprus will be the departure member state or the destination member state:

1. In the event a Cyprus company is going to transfer its seat to another European country, in which case Cyprus is to be considered as the departure European member state, the whole procedure must commence in the Republic of Cyprus. To be more precise, upon preparation by the Board of Directors of the company of the Draft Terms of the Cross-border Conversion, a solvency declaration, and the Reports for the members and employees of the company, as the case may be, and subject to the examination of such Reports by an expert, if necessary, the company must take all appropriate steps for the publication—within the time frame prescribed in the Law—of its intention to proceed with a Cross-border Conversion, either by filing all relevant documents with the Department of Registrar of Companies and Intellectual Property or by making the said documents available on its website free of charge to the public. Then, a General Meeting will be convened, which is to decide by means of a special resolution (subject to the provisions of the existing Articles of Association of the company) on the approval of the Cross-border Conversion as well as the adaptation of the Constitutional Document (M&AA) of the company. Upon approval by the General Meeting, an Application is filed with the Court requesting the issuance of the “Pre-Conversion Certificate,” upon issuance of which the latter is transmitted to the destination European member state through the system of interconnection of registers. Given the fact that the company shall be converted to a company under the laws of another European member state, the procedure for the completion of the conversion shall continue in the destination European member state, the competent authority of which shall be called upon to confirm/approve the Cross-border Conversion.
   
   The Department of Registrar of Companies and Intellectual Property proceeds with the deletion of the company from the national Companies’ Register only upon confirmation/approval of the Cross-border Conversion by the destination European member state, shared through the system of interconnection of registers.
   
   
2. In the event a company is going to transfer its seat from a European country to the Republic of Cyprus, the Cyprus Courts are competent to review the legality of the Cross-border Conversion upon provision of the “Pre-Conversion Certificate” issued by the competent Court of the departure European member state. Subject to the successful review of the proposed Cross-border Conversion, the Court accepts and approves the Cross-border Conversion while the Court Order approving the Cross-border Conversion is filed with the Department of Registrar of Companies and Intellectual Property, which is responsible for updating the national Register of Companies as well as notifying the departing European member state, shared through the system of interconnection of registers.

On the other side, the procedure for transferring the registered seat of a company from a third country to the Republic of Cyprus or vice versa is referred to as, and thus governed by the rules for, ‘re-domiciliation’ (“Re-domiciliation”), introduced in Cap. 113 by virtue of the Amending Law No. 2 of 2006 to Cap. 113 (Law 26(I)/2024). 

The procedure relating to Re-domiciliation is differentiated depending on whether the Republic of Cyprus will be the departure jurisdiction or the destination jurisdiction:

1. In the event a Cyprus company is going to transfer its seat to a foreign jurisdiction, the procedure must commence at the Republic of Cyprus by passing a resolution to this end by the General Meeting of the Company, as well as filing an application, accompanied by all supporting information/documentation, with the Department of Registrar of Companies and Intellectual Property requiring the latter to provide its consent for its re-domiciliation from the Republic of Cyprus to a foreign authorized country or jurisdiction; simultaneously, the company’s intention to be re-domiciled abroad must be published in accordance with the provisions of the Law. The Department of Registrar of Companies and Intellectual Property does not grant any consent for re-domiciliation unless a period of 3 months from the publication date has lapsed. During the said 3-month period, any creditors of the company are given the right to object to the re-domiciliation of the company by applying to the Court to this end. In that regard, the Court may approve, approve provided sufficient guarantees are given, or reject the re-domiciliation of the company. Following the lapse of the said 3-month period, in the absence of any objections or in the existence of a Court order approving (unconditionally or given the guarantees) the re-domiciliation of the company, the latter is granted the Registrar’s consent to be re-domiciled. Then, the procedure is continued in the destination foreign jurisdiction for the purpose of obtaining the “Certificate of Continuance.” Upon obtaining the “Certificate of Continuance,” it is submitted to the Department of Registrar of Companies and Intellectual Property, and the latter proceeds with the de-registration of the company from the Companies Registry of the Republic of Cyprus and the issuance of the “De-registration Certificate.”
2. In the event a company is going to transfer its seat from a foreign jurisdiction to the Republic of Cyprus, the foreign company must, following any steps necessary to be brought in the foreign jurisdiction, file an application for its continuance in the Republic of Cyprus to the Department of Registrar of Companies and Intellectual Property of the Republic of Cyprus, accompanied by all supporting information/documentation. Upon receipt of such an application, the Department of Registrar of Companies proceeds with the provisional registration of the company and issues the “Temporary Certificate of Continuation” to this end, indicating that the company continues to exist under the laws of the Republic of Cyprus as of the date of such registration. Then, within a period of 6 months (or a further 3 months, if deemed appropriate), the company must provide the Department of Registrar of Companies and Intellectual Property with supplementary documents, issued by the competent authority of the foreign jurisdiction, evidencing that its existence in the foreign jurisdiction has ceased. Upon the provision of the required documents to the Department of Registrar of Companies and Intellectual Property, the latter issues the “Certificate of Continuation” of the company. Otherwise, the Department of Registrar of Companies and Intellectual Property is duly entitled to strike off the name of the Company from its archives.

In light of the above, it is worth stressing that the opportunity for a company to transfer its seat must be contained in the Constitutional Document of the Company.