The European Company (known formally by its Latin word “Societas Europae” (SE)) is a European public limited company which can be formed in any Member State of the European Economic Area.
The concept of the SE was first proposed 30 years ago and is now accepted by all the EU Member States.
The formation and maintenance of an SE is governed by the European Statute which consists of two parts: a Regulation and a Directive on employee involvement which has to be reflected in national legislations of the Member States.
The majority of the countries have already implemented the amendments to the national legislation, including Cyprus.
A European Company can be set up in the following ways:
- The formation of a holding company by public or private limited companies from two different Member States.
- The merger of two or more existing public limited companies from at least two different member States.
- The formation of a subsidiary from at least two different Member States.
- The conversion of a public limited company, incorporated under national law, having had a subsidiary for at least two years in another Member State.
- The formation of an SE by the existing European Company.
The European Company must be registered in that country where it has its administrative head office. The incorporated company must be registered in the Registrar of the Member State and its registration must be published in the European Company’s Official Journal.
The restrictions on the choice of the name conformed to SEs are regulated by the legislation of Cyprus.
Regardless of the currency the SE is required to have a minimum amount of share capital of the equivalent of at least EUR 120.000,00 (Euro One Hundred and Twenty Thousand).
The formation of a European Company in Cyprus has a range of advantages. There is the possibility to conduct its activities avoiding the complicated management of the Company governed by the regulations of different national laws. Moreover, the SE can transfer its registered office within the EU without winding up and re-registering in the different Member States.
For tax purposes the SE are treated according to the national tax legislation. The low tax rate of 10% and the presence of an extensive range of double tax treaties make Cyprus a very good choice for the formation of the European Company.