There is an opportunity to establish businesses within the Republic of Cyprus using foreign subsidiary corporation under the Companies Law Act (section 347, Chap. 113). This procedure isn’t viewed as a setting up a new legal entity, because there is already an incorporated organisation abroad.
This means that a foreigner owning a branch in Cyprus may use this offshore affiliate for any legal activities on an international level. This subdivision can also be established as separate firm from the main enterprise or an extension. The head institution remains fully liable for all activities the overseas affiliate is undertaking, therefore it has to take all obligations and responsibilities as well as efficaciously keeping a record of its loss and profit account.
Overseas division registration procedure
Although the business establishment process in this country is similar to the setting up procedure of a completely new organisation, there remains the necessity to file a proof of the holding company’s existence. This means that, the list of documents enumerated below should be sent to the Registrar of Companies, for successful partnership legalisation in Cyprus, within one month:
- The organisation’s charter/ Articles of Association.
- Memorandum of Association.
- Other significant documents providing company information.
- Any documents concerning the company authorities (Director, Secretary information).
- Branch register name.
- Representative address in Cyprus.
The Representative will receive the power to control the subdivision registration process and make necessary notices and documents with the help of a Power of Attorney. All the submitted materials should be legitimatised by public notaries and the Cyprus Council in the country of origin, with an apostille. Translation of all appropriate documents into Greek to be filed with the Companies Registrar. If any amendments to company information take place, you should immediately inform the Registrar.
The overseas division should bear the same responsibility as the main establishment and its head office should also be based in the Republic of Cyprus. You cannot appoint a Shareholder for the branch, for the sole reason they are a part of the holding company. The firm is also obliged to create a bank account in its own name for an effective subdivision registration.
When the offshore affiliate registration is completed, all the documents should be passed to the firm’s management office. Moreover, it is requested to file a special document providing proof of corporation’s capital deposit existence. Certificate of Legalsation should then be passed to the Ministry of Commerce by the representative, in order to submit a tax application, along with the information about the principal firm, its affairs, shareholders and list of directors. You should also register VAT and provide annual accounts.
For every financial year, the main company owning a branch within the Republic should submit financial statements made according to the laws (of the native country) and head organisation’s tax return.
If the affiliate authorities and business activity’s control is in Cyprus then the taxation on the profits is 10% lower, and if the authorities and activities control is not situated in the county, the profits are free from taxation.
The corporation’s division registration in Cyprus is definitely the best means of conducting your practical affairs all over European countries. This legalization process is not difficult and time-consuming, if all the necessary information was submitted and the subdivision name has been approved, it should only take approximately six-seven days.