The European Commission has recently proposed a new Directive to make it easier for companies to use digital tools and processes in EU company law, including in Cyprus. This proposal is the second step of digitalisation for EU company law, building on the 2019 Digitalisation Directive (EU) 2019/1151.
The proposal is intended to facilitate cross-border companies' operations, increase business transparency and trust, and cut red tape for cross-border businesses. It aims to increase the availability of company information, remove administrative barriers, and promote "digital by default" solutions when accessing or using company information in interactions between companies and business registers or authorities.
It will also make more information about companies publicly available at EU level. To ensure greater transparency and trust in companies, the proposed rules will make sure that important information about companies (such as partnerships and groups of companies) is publicly available, make searches for information about companies in the EU easier, and ensure that company data in business registers is accurate, reliable, and up-to-date.
The proposed rules include the "once-only principle," which means that companies in Cyprus won't need to resubmit information when setting up a branch or a company in another Member State. Instead, the relevant information can be exchanged through the Business Registers Interconnection System (BRIS). Other proposed rules include an EU Company Certificate, a multilingual standard model for a digital EU power of attorney, and removing formalities such as the need for an apostille or certified translations for company documents.
The proposed Directive is intended to adapt EU rules for companies to digital developments and new challenges and stimulate growth and competitiveness in the single market, including Cyprus. Once adopted, Member States will have two years to transpose the Directive into national law.
This new proposal is an essential step towards improving the predictability and adaptability of the legal framework for companies operating in the EU, including Cyprus, and increasing their competitiveness in an increasingly digital world.
The full text of the Proposal for a Directive to further expand and upgrade the use of digital tools and processes in company law can be found here.
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