The choice of corporate structure and organising a group of companies have significance in many aspects. Optimising the corporate structure can save tax and VAT, facilitate favourable financing and an optimal distribution of risk, as well as free capital flow between companies. Companies and regulations are constantly changing, so it is important to stay informed and regularly assess whether a company or group ought to be reorganised.  

Sections 198-201 Cyprus Companies Law, CAP 113, provide for such reorganisations of companies. The provisions recognise mergers, divisions, partial divisions, transfer of assets and exchange of shares in two or more companies intending to merge together. Reorganisations falling within the scope of the law result to profits that are exempt from corporate income tax, provided that they do not result to the acknowledgement of income neither at the company nor at the shareholders’ level. Further, reorganisations that fall outside the scope of VAT, there is a stamp duty exemption on agreements concluded for reorganisation purposes and there is a capital gains tax exemption on profits deriving from the transfer of immovable assets in the course of reorganisation as well as a transfer fees exemption on the transfer of immovable property.

Our role as your advisor will be to:

  • Understand the Client’s business and operating model
  • Discuss with the Client the scope of the reorganisation
  • Identification and assessment of reorganisation options available
  • Identification of the reorganisation structure that will enhance value and provide optimum flexibility for possible mergers and acquisitions
  • Evaluation of the tax and other implications of the proposed restructuring plan
  • Assist the client to complete and submit to the tax authorities the proposed reorganisation scheme