The ECS team are accustomed to all the challenges surrounding establishing overseas companies, representative offices, branches or subsidiaries in different jurisdictions for more than 10 years. We also provide accounting and other maintenance services to many of the companies, representatives and subsidiaries we incorporated.
An entity incorporated in a foreign country may own multiple branches in other jurisdictions, therefore use it for conducting international activities. These can be set up as separate entities from the parent company (for example, Cypriot companies set the overseas company up as a Shareholder) or an extension of the parent-company in Cyprus. The head office will be fully liable for all activities the branch is undertaking; hence the foreign company is liable for any debts, obligations and can also effectively manage profit.
The Procedure of Branch Registration in Cyprus:
The procedure for registering a subsidiary in Cyprus is similar to a company’s registration, in that proof of an existing parent company must be provided. Within one month, the following documents should be filed to the Companies Register:
- Memorandum and Articles of Association or the charter or other instrument defining theconstitution of the company.
- Details of the Directorsand Secretary of the company and,
- Registered company name and address of a Cyprus resident individualor company representative.
A Cyprus representative shall be authorised, through a Power of Attorney, to collect on behalf of the company any notices, documents and to fulfill in general the establishment of the process. The documentation listed above, should be legalised and apostilled in the country of origin or legalised by both public notary and the Consul of the Republic of Cyprus in the country of origin.
Forms AE1, AE2 and AE3 must be completed and filed to the Registrar of Companies and also translated into Greek. The registered office of the branch must be situated in Cyprus and the name of the branch must be the same as the parent company’s name. A Shareholder cannot be appointed for the subsidiary as it’s only an extension of the head office. Setting up a bank account in the company’s name is also one of the initial steps for a subsidiary registration in Cyprus.
Furthermore, it is mandatory to obtain a document certifying the capital deposit. Once the registration procedure of the branch is finalised, its management should be provided with a full set of documents. The Certificate of Registration should be provided to the Ministry of Commerce by the authorised representative, in order to submit an application to the tax register. Furthermore, details of the parent company, list of Directors, Shareholders, and business activities must also be provided.
Requirement to file annual accounts.
A parent company with a branch in Cyprus must submit copies of its financial statements (as per its last AGM) and publish them in accordance with the legislation of the country of incorporation and tax return of the parent company, required to be filed with the Income Tax Office for each financial year. Tax rates that apply to subsidiaries, if the management and control of the activities of the branch is in Cyprus, then the profits of the branch have a reduced tax rate. However, if the management and control is not based in Cyprus, the profits of the branch are exempt from taxation.
Registering a Cyprus branch may best serve your clients business needs within the European Union. The completion of its registration should take no longer than a week, once all requested documentation is provided to the Registrar of Companies.
Contact us for more details or advice on how to register a subsidiary in various jurisdictions.