Cyprus is growing rapidly and enhancing its reputation as a reliable financial and capital management centre. Major conglomerates have established their headquarters and expanded their business activities in Cyprus, given its extremely competitive commercial advantages. Cyprus has long been a fundamental, geostrategic location in the Mediterranean crossroads of Europe, Asia and Africa. As a member of the European Union since 2004 and the Eurozone in 2008, Cyprus enhanced its role as robust and reliable destination for key players in various industries and sectors. The professional services industry evolved to cater for businesses of local and international clients, in line with the risks of the Digital Age and the challenges of globalisation.
The Cyprus legal system provides comfort through familiarity to international executives who conduct local or cross-border business through Cyprus. Cyprus law and regulations are formulated to facilitate compliant transactions of businesses smoothly. The national tax framework and incentives as well as international or bilateral treaties with countries worldwide remain useful business structuring tools.
The Cyprus Companies Law Cap. 113, as amended, is in line with the EU Directive 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law, particularly in relation to cross-border mergers with Cyprus entities. Subject to confirmation from foreign counsel that the Directive is also in line with their respective foreign member state, provided that Memorandum of Association of the relevant companies permits so and that they have settled their local obligations, a foreign company may merge with a Cyprus company.
To initiate the cross-border merger process the management of the Cyprus and foreign companies must agree to a merger plan, which must be filed with the Cyprus Registrar of Companies and published in the Official Gazette of the Republic, prior to calling a general meeting of the shareholders of the Cyprus company. Subsequently, upon consideration of the directors’ (and experts’) report(s), the merger plan must be approved by way of a special resolution at the general meeting of the Cyprus company. Thereafter, the Cyprus company must apply to the Cyprus Court to grant a pre-merger certificate confirming compliance from a Cyprus legal perspective with the required preliminary actions and formalities. Simultaneously, such pre-merger certificate must also be procured by the foreign company in its respective jurisdiction.
In addition, if the Cyprus company is the absorbing entity, it must apply to the Cyprus Court to grant approval of the completion of the merger as of its effective date and to submit the pre-merger certificate procured by the foreign company in its respective jurisdiction. The issued Court Order must subsequently be submitted to the Registrar of Companies who must in turn notify the competent authority of the foreign company’s member state of the completion of the merger as of its effective date. Whereas, if the foreign company is the absorbing entity, the competent authority of its member state must – following receipt of the pre-merger certificate issued by the Cyprus Court – notify the Registrar of Companies of the completion of the merger as of its effective date. Finally, provided all requisite actions and formalities have been duly complies with, the Registrar of Companies will strike off the Cyprus company from its Registry and make the necessary publication in the Official Gazette of the Republic.
We undertake cross-border mergers and acquisitions from a Cyprus legal perspective. We assist from inception to completion of such projects, throughout the pre-merger and feasibility phases, by liaising with the Registrar of Companies and coordinating foreign counsel, and with drafting and reviewing the requisite merger proposal, plan, report, corporate authorisations, consent letters, Court application and affidavits. We can also undertake ancillary matters, including corporate governance and substance requirements.
Our firm advises on local and international corporate, commercial and M&A projects in a variety of industries. We combine our technical skills and commercial awareness to provide optimal, customised solutions for our clients.
Please do not hesitate to contact us if you require further information or support on such matters.