In Northern Cyprus, every business activity is protected by the government and the constitution. The incentives given to foreign investors have brought a lot of business to Northern Cyprus. Thanks to the multinational banking system and efficient business environment, North Cyprus allows investors to run offshore companies.
Government policies and ongoing incentives have been effective at attracting investors into Northern Cyprus. Tax-efficient business structures and the environment allows companies to operate freely and be more financially effective. Company operations are more effective, whether buying real estate or making international sales to the world. In addition, both local and foreign investors have a non-discriminatory business environment. Therefore, investments are not different from the local investors.
Offshore companies are under the law of “38/2005 International Business Company Law”. International business company law is compliant with European Union legislation. Company officials can set up an office anywhere in TRNC. Also, there are several opportunities for virtual offices. North Cyprus offshore company license allows the employment of foreign nationals. Company officials and investors can make proxy directors and shareholders. Proxy directors and shareholders allow the organization’s real owners to remain hidden.
The Council of Ministers has only the authority to approve foreign branches. There are no restrictions on the free movement of capital, but investments in the construction and travel agency sectors have certain rules. In these sectors, there must be a Turkish Cypriot citizen taking part in capital ownership or the company management. Foreign investors need to allow 51% of local participation in construction and travel agencies.
In North Cyprus, except for online gambling and sports betting (these sectors have different rules and regulations), the following fields can conduct businesses without any restrictions: Finance, IT, consulting, communication, online services, and aviation.
Advantages of North Cyprus for offshore companies
- Corporation tax is %1 in year-end taxable profits. This company type cannot be subjected to any other tax types.
- All kinds of direct tax are exempted (VAT, stoppage tax, and others)
- Immovable property tax is also exempt for North Cyprus offshore companies.
- Shareholders are exempt from any inheritance or income tax that can result from transferring shareholding.
- Interest income on the company savings is limited to 1% tax.
- North Cyprus Offshore Company can open saving accounts in foreign currencies (USD, GBP and EUR) and pay only 1% tax on interest income.
- For competitive advantage, proxy directors and shareholders can keep the identity of the company owners.
Requirements for North Cyprus offshore companies
- The minimum number of shareholders allowed is two people, one director, and one secretary. Both can be non -TRNC citizens.
- Shareholders must be of foreign origin and not originally reside in TRNC.
- In the event of renting and setting up office space, at least one of the employees must be a TRNC citizen.
- One person should appoint a local person as a representative in TRNC. The biggest reason is to receive any notices or documents sent to the company from TRNC authorities.
- North Cyprus offshore companies must keep account records the same as a local company type.
- All the documents that are not in English and Turkish must be officially translated from certified translators and certified by a notary.
Documents to be Provided for North Cyprus Offshore Company
- Application Form for North Cyprus offshore company must be provided.
- Notarized photocopies of the applicants’ passports for proof of ID.
- Proof of Address with utility invoice for electricity, water, or local phone.
- Criminal records clearance needs to provide in the application process.
- Founder’s original CV.
If an already established company would like to operate in the TRNC, organizations should provide the following documents certified by a notary:
- Certificate of Incorporation
- The Memorandum and Articles of Association
- List of the shareholders showing type, number, and value of shares.
- Shareholders’ nationalities and addresses.
- Directors and secretaries’ names, addresses, and nationalities.
- A newly issued and dated certificate from the foreign Chamber of Commerce or Industry.
Fees of North Cyprus Offshore Company
- Minimum share capital is €20.000, which must be deposited into any TRNC bank.
- The annual license fee is €5000 per annum. The annual license fee is payable in the month following incorporation
- During the application process, stamp duty and related costs for company documents will be determined.