The Turkish Republic of Northern Cyprus (TRNC) enjoys a highly advantageous location at the intersection of Europe, Asia, and Africa’s major trade routes, with vast opportunities for international investors. With their economy expanding rapidly (over 5% annually), the TRNC government is improving conditions for foreign investment through tax reforms and various tempting business incentives. If you take into account the above background, establishing a company with foreign capital in Northern Cyprus is an advantageous move for entrepreneurs about to broaden their business scope.
Choosing the right company type
In 2024, non-residents who wish to establish a business in Northern Cyprus have a variety of company types to choose from. The most common options include Limited Liability Companies (LLCs) and Public Limited Companies. These structures are designed to cater to different business needs and scales, from small enterprises to larger corporations.
In Northern Cyprus, Limited Liability Companies (LLCs) are an accessible and adaptable choice if you are looking to leverage the region’s prime location. The key advantage for owners is the protection of personal assets, which are not at risk in case the company faces financial challenges. Public Limited Companies in their turn are ideal for bigger operations, since they provide the opportunity to generate funds by selling shares to the public.
No doubt, the region offers compelling incentives for businesses, with the Free Trade Port Law among them. This legislative instrument allows companies to establish operations in free trade zones, where they enjoy substantial tax benefits. Specifically, businesses operating there are not subject to corporation tax or value-added tax (VAT), which greatly boosts their appeal for global commerce.
Thriving in Northern Cyprus: benefits for international companies
Currently, Northern Cyprus offers a range of incentives and discounts for international business owners. Say, importing vehicles and office equipment into TRNC incurs only a 3.5% customs duty.
For your convenience, the benefits of registering a company in Northern Cyprus are listed below:
- Stable Currency: The local currency remains stable with Turkey’s backing.
- Easy Registration: The company registration process in Northern Cyprus is simple, especially when handled by experts.
- Tax Advantages: Businesses may enjoy a corporate tax rate as low as 0%.
- Global Access to Funds: Account holders in TRNC banks can manage their funds globally.
In Northern Cyprus, companies have the flexibility to conduct both cash and non-cash transactions with minimal oversight from local tax authorities. The efficient financial monitoring and tax accounting system in place reduces the risk of account freezes and cuts down on paperwork.
Setting up an LTD with foreign investment in Northern Cyprus: here’s how
As always, the fastest and the most efficient way to do it is by engaging industry professionals. International Wealth services include help with establishing an LTD (Limited Liability Company) with foreign investment. Here are the benefits of this option:
- Unrestricted Access: Operate freely within the TRNC’s domestic market.
- Fluid Transactions: Effortlessly transfer funds to and from LTD accounts.
- Banking Services: Utilize services offered by Turkish bank subsidiaries, including SWIFT and IBAN.
- Work Visas: Secure work visas for all company staff.
- Residency: Become eligible for permanent residency after residing in TRNC for 6 years.
- Citizenship: Gain the opportunity to obtain citizenship following 10 years of employment.
These are the documents you’ll need to provide to set up an LTD in Northern Cyprus in 2024:
- apostilled certificate of no criminal record
- passports of all the LTD founders
- proof of residence in the TRNC
- bank statement verifying the reservation of funds in a Cypriot bank equal to the company’s authorized capital
- two-year valid bank guarantee letter in the LTD director’s name for an amount equivalent to 10 times the minimum monthly wage.
Before registering a company with foreign capital in Northern Cyprus, be sure to consider specific details in the Articles of Association. Make certain that the document comprehensively lists all activities your company intends to undertake. This step is critical because future amendments to this section will require a court’s approval. You may only add or remove activities with a court’s favorable ruling. Also, be aware of activities that foreign-capital companies are not allowed to conduct, say, construction and healthcare.
For certain business areas, a TRNC citizen must hold a majority share of 51% in your LTD. The distribution of shares among founders should range from a minimum of 10% to a maximum of 90%.
The company’s general agreement must specify the maximum number of directors it is allowed to have, as well as the minimum percentage of votes needed to remove a director.
Below, you will find the simple steps you must take to register a company in Northern Cyprus:
- Verify the uniqueness of the chosen company name.
- Draft corporate documents, including the Articles of Association and General Agreement.
- Acquire bank confirmation letters.
- Compile and submit the complete set of documents to the TRNC registration authorities.
- Settle all applicable duties and levies.
- Collect the company’s constituent documents.
- Register the LTD with the tax authorities.
- Open a bank account at a local financial institution.
- Secure a permit for the company’s primary business activity (note: the license incurs a separate fee).
- Enter the company’s details into the municipal register.
- Record the company’s information in the Ministry of Labor and Pension Fund’s register.
International Wealth’s LTD support services come with a comprehensive suite of offerings:
- Accounting Outsourcing: We handle your accounting needs and ensure timely submission of monthly reports to the tax authority.
- Tax Consultancy: Our experts provide tax-related advice and services.
- Business Licensing and Management Consulting: We guide you through the process of obtaining necessary licenses and offer advice on managing your business effectively.
- Business Visa Acquisition: We assist in procuring business visas for international operations.
- Document Preparation: We take care of printing invoices and credit receipt vouchers for your transactions.
- Cash Register Setup: The International Wealth expert team will help install cash registers for your business.
- Company Signage Permit: We facilitate the process of obtaining the required permit to display your company’s sign.
Interested in the prospect of living and working in a scenic European country that offers favorable conditions for foreign investors? Contact International Wealth experts without further delay to make the most of this opportunity!