When you use a free trade zone company for your import and export activities, you stand to benefit from a large number of tax incentives. Free trade zone companies are exempted from payments such as income tax, corporation tax, customs duty, and value-added tax for income generated via international trade.
Another benefit you get from using a free trade zone company in North Cyprus is that there are no restrictions on the transfer of profits and retained earnings abroad. Furthermore, you can employ as many foreign nationals as your firm may require. By using a free trade zone company, you get to save money on taxes.
North Cyprus free trade zone also allows service companies to be incorporated and operate out of a P.O. box. Some service companies operating out of North Cyprus free trade zone are; Ofis Game, BTC Turk, Webadam, Key to VoIP, Affilysis, etc. There are other service categories from consulting to online commerce that can be undertaken.
Securing an office space is quite easy as many real estate agencies operate in the free trade zone areas. Rental fees can be discussed with the free trade zone companies, operators, and tenants. Rental fees can also be negotiated with the tenants and operators. This company type allows the investors to operate in traditional production, buying-selling, or such.
Free trade zones are also security conscious. Security officers keep the area under control 24/7. Magusa Port (Famagusta Port) provides a better geographical advantage for the Middle East markets. Thanks to the strategic location of the port, goods can be exported faster and easily.
Advantages of North Cyprus Free Trade Zone Company
- North Cyprus Free Trade Zone company is not subject to any value-added tax (VAT).
- Other than the incorporation fees, there is no annual renewal fee required.
- 0% Tax on Corporate Profits.
- No withholding tax on Dividends paid from your company.
- No Income tax for no resident shareholders (Residing in TRNC less than 183 days in the calendar year).
To form a Free Trade Zone Company, there are some essential requirements you must fulfill. These requirements include;
- Minimum 2 shareholders required for incorporation
- If any shareholder has no TRNC citizenship, the minimum paid-up share capital is 50,000 Euros.
- According to the Cap.113 Companies Law, Free Trade Zone Companies must prepare a Memorandum of Association and Articles of Association papers.
- There needs to be 1 Director and 1 Secretary for the company board. Both can be no-TRNC citizens.
- Proof of address and proof of I.D. is required.
- Free Trade Zone Licence Fee costs $2,500. (Paid only once)
Investing in North Cyprus
The Cyprus Turkish Investment Development Agency (YAGA) was established to identify and execute investment guidance and promotional strategies. The agency is responsible for improving the investment climate and ensuring investments are more accurate and efficient. This is done to attract investments needed in the economic development of TRNC.
Cyprus is one of the most attractive locations for foreign investments. As an island, Northern Cyprus has tax promotions and treaties for the protection of investments. In the last decade, financial incentives provided to foreign investors have made the island a magnet for foreign investors and investments. As a result of this opportunity for foreign investors, income tax has decreased, offshore partnership profits have gone full tax exemptions, tax deductions on all expenses incurred for the earning of income, and full capital gains tax exemption.
In addition to all of these opportunities, there are other incentives, including a ten-year tax exemption for the manufacturing of the new products, investment discounts, duty-free status in free industrial zones, and reduced taxation for foreign experts employed there. The Northern Cyprus government introduced all these.
In Northern Cyprus, the constitution guarantees private property rights and does not discriminate between Cypriots and non-Cypriots. In 2000, Northern Cyprus liberalized all foreign direct investment controls on local businesses for residents of the European Union, who may now own 100% of local companies.