Cyprus is a reputable and well established financial centre and many foreign companies choose to do business in Cyprus and register companies here. Although most investors tend to register new companies, it is also common for foreign companies to set up branches in Cyprus. The process is simple and very close to the process of setting up a new company. However, the branch is not a separate legal entity as it is owned by the foreign company that sets up the branch in Cyprus. The foreign company is liable for all debts, obligations and liabilities of the branch. This is different to the relationship of a parent and subsidiary companies whereby the subsidiary is liable for its own obligations and the parent company is not commonly held liable for the actions or liabilities of the subsidiary.
A foreign company that wishes to register a branch in Cyprus must within one month from the date of the establishment of this branch register itself with the Companies Registrar as an overseas company. In order to do that the foreign company must file with the Companies Registrar a number of documents translated in Greek. These documents are:
1. Certified copy of the Memorandum and Articles of Association or Charter or equivalent document defining the constitution of the company.
2. Details of the directors and secretary of the company.
3. Name and address for one or more persons authorised to accept on behalf of the company any notices that may be served to the company.
Further, along with the above documentation, forms AE1, AE2 and AE3 should be completed and submitted to the Companies Registrar.
Upon registration of the branch, the company will be provided with a set of documents including the certificate of registration. A branch is required to file each year financial accounts, auditors’ report and directors’ report. Exemptions exist under Cypriot law for certain companies registered in EU countries and on the basis of specific EU directives.
A branch in Cyprus of an EU company can serve the company’s clients throughout the European Union. Registration process usually takes only around one week.