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M. Paraschou Law

Company Branch in Cyprus: What you need to know

Foreign (Overseas) Companies wishing to expand their operations in Cyprus may do so through the establishment of a place of business in Cyprus, known as a Branch.

What is a Company Branch?

A Branch essentially consists a permanent establishment in Cyprus, which serves as an extension of the Foreign Company. It enables a Foreign Company to carry out operations in Cyprus, without having to incorporate a subsidiary or a seperate company. A Branch gives the Foreign Company access to the Cyprus and EU Markets, with also the right of ownership of real estate in Cyprus.

A Company Branch needs to be registered in the register maintained by the Registrar of Companies in Cyprus, within one (1) month of its establishment. 

Unlike a subsidiary company, a Branch is not a separate legal entity and must therefore be registered under the same name of the Foreign Company and offer the same services. As a single legal entity, the Foreign Company has unlimited liability for all the activities of the Branch. 

Why set up a Branch in Cyprus?

Setting up a Branch in Cyprus will allow a Company to deal directly with consumers in Cyprus without having the need for an intermediary. The Branch will need to file annual Audited Financial Statements with the Registrar of Companies in Cyprus, and any profits generated by its activities will be subject to the Cyprus Corporate Tax of 12.5%. Any initial losses made by the operation of the Branch may be offset with profits made by the Foreign Company, leading to a tax reduction in their country of registration.

Large corporations may benefit off the pre-existing goodwill that their brand name carries. 

How to set up a Branch in Cyprus

The Foreign Company will need to submit a relevant application with the Registrar of Companies in Cyprus, providing all required information and documentation. Including the Certificate of Incorporation and the Memorandum and Articles of Association of the Foreign Company. The application must further specify the physical address of the Branch (which cannot be a PO Box) and appoint an authorised person who will accept on its behalf the service of legal documents and represent the Foreign Company and the Branch in transactions with third parties and before Courts and Authorities in Cyprus.

Additionally, an overseas company must have at least one (1) director and one (1) secretary, who must be at least eighteen (18) years of age. The Secretary is responsible to maintain the Corporate Records of the Company and to maintain accurate records with the Registrar of Companies in Cyprus. 

This article is only for informative purposes and does not constitute legal advice.

Should you wish to find out more, contact our team at info@parascou.com.cy.

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