IP Migration

Overview

Transferring an existing intangible into a Cyprus company is a normal transaction between two entities. It requires an independent valuation, arm's length contractual terms and transfer pricing documentation, and it produces a disposal in the transferring jurisdiction with whatever consequences follow there.

What it does not produce is nexus. Under the modified nexus approach the acquisition cost enters overall expenditure and leaves the qualifying numerator untouched, so the receiving company begins with a low fraction. The uplift, capped at 30 percent of qualifying expenditure and limited by the non-qualifying amount, softens this without removing it.

That has a direct consequence for how the engagement is scoped. The transfer is the first step, not the objective. The fraction improves only as the Cyprus entity funds further qualifying development, and because the measure is cumulative across the asset's life, that improvement is gradual and needs planning rather than hoping.

Where the company itself can move instead, redomiciliation is usually the better route, because no disposal occurs and the nexus history stays with the same entity.

What is included

• Comparison of the available routes: transfer, redomiciliation, or establishing Cyprus management and control over the existing entity
• Nexus modelling of the post-transfer position and the trajectory under a stated development plan
• Independent valuation coordination for the asset being transferred
• Assignment and IP transfer documentation, including any outstanding founder and contractor assignments
• Transfer pricing documentation supporting the consideration and any ongoing licensing
• Exit analysis in the transferring jurisdiction, including deemed disposal and exit charge exposure
• Post-transfer development structuring so subsequent spending is qualifying expenditure
• Governance establishing that the asset is directed and exploited from Cyprus
• Documentation of the technical audit trail supporting the ongoing claim

How Doviandi approaches this

We test whether the transfer is the right route at all. Redomiciliation preserves the nexus history and avoids a disposal. Establishing Cyprus management and control over the existing company achieves the same without moving anything. A transfer is the correct answer sometimes, not by default.

The post-transfer plan is part of the advice. A model showing the fraction at the point of transfer is incomplete. We show it over the following years under the client's actual hiring intentions, because that is what determines whether the benefit materialises.

Valuation is independent. A related-party transfer priced by the parties is the arrangement most likely to be revisited. Independent valuation coordinated at the time is the cheapest form of support available.

The exit side is analysed first. Some jurisdictions impose a charge on the outbound transfer of intangibles, and that cost can exceed the Cyprus benefit for several years. It is established before the transaction is designed rather than discovered afterwards.

Related knowledge

Background reading on the questions this service answers:

• Can a foreign company use the Cyprus IP Box? compares transfer, redomiciliation and establishing management and control.
• How qualifying profit is calculated shows what an acquired asset does to the fraction, with a worked example.
• Where should a founder own software IP? on why ownership should follow funding and what moving later costs.