Why should you setup a North Cyprus Company?
By setting up a North Cyprus Company your business will enjoy strong multinational banking system and tax efficient business environment. Due to unique situation in North Cyprus the government has introduced very attractive company types for investors to utilise. These tax efficient business structures will help you save whether you are buying Real Estate or making International Sales. North Cyprus, by law, offers non-discriminatory business environment to both local and foreign investors. Therefore your investments are no different from a local investor. Furthermore the political stance in the North Cyprus is for the European Union. Hence you know the legal framework is getting ever closer with Europe. North Cyprus Company types available for you:
Forming a North Cyprus Company (Local)will allow you to conduct business both within TRNC and Abroad. This company type is based on 1949 UK Company Law. Hence the structure of Shareholders and Director is very similar to that of an UK Company. if your income is mostly from TRNC based customers, North Cyprus Company (Local) is the most tax efficient company type. Additionally, North Cyprus (Local) Company is ideal for Real Estate investment in TRNC. You can use Local Company as a vehicle to administer your estate and sell your property. Selling your property via a Local Company will be a lot cheaper than simply selling it on your own. Furthermore by making your investments via a Local Company your interests will be protected same as that of a Local investor. Hence you will get the largest assurance on your real estate investment. Following procedures, which will all be done by our office, are for Local North Cyprus Company Formation:
- Limited Liability Company Articles of Association and Memorandum of Association prepared,
- Stamp Duty and Relevant fees (Amount needed depends on Company Paid-Up Capital),
- Proof of ID and Proof of Address documents presented,
- For Non-Citizen Directors a certification from TRNC Tax Office obtained,
- Company Share Capital (min 100,000USD for non-citizens) deposited to a Bank Account.
Under TRNC legislation, Foreign Companies can operate branches or offices under Cap 113 – Companies Law. North Cyprus Company (Branch) type is used by foreign companies that want to operate their own subsidiaries in North Cyprus. Some of the examples are large Multinational Banks that operate in North Cyprus (i.e. İş Bankası, Ziraat Bankası, Garanti Bankası etc…). Procedure for company formation are very similar to that of a Local Company.
North Cyprus Free Trade Zone Company is setup under Free Trade Port Law 26-1983. Similar to its counterparts around the rest of the world, Free Trade Zone offers generous tax advantages. While setting up the company same requirements need to be fulfilled, like a local company, as set out by Cap 113 – Companies Law . North Cyprus Free Trade Zone Companies are exempt from Corporation Tax and Value Added Tax. Additionally there is no withholding tax on dividends paid to shareholders. There is also no capital restrictions on movement of capital. Hence you can freely conduct your trade with no tax burden. North Cyprus Free Trade Zone became a more popular option in the recent years. With its tax exempt status North Cyprus Free Trade Zone also grants operating license to Service businesses that does not take any physical place at the port. Examples of these activities are Consulting, Advisory, IT Services, Financing and Insurance activities. Some of the largest Hosting providers and IT Companies that service Turkey is based at North Cyprus Free Trade Zone. (See: Ofis Game, BTC Turk, Webadam, IHS Hosting) proving the success of North Cyprus Free Trade Zone. There are more than 400 Companies utilising North Cyprus Free Trade Zone company type. In the Free Trade Zone there is no annual fee payable. Only fees unique to this company type is Application fee (ranges 200$-1000$) and Initial Free Trade Zone Licence Fee (2,500$). Click Here to read more about North Cyprus Free Trade Zone Company.
North Cyprus Offshore Company structure is based on European Union compliant 38/2005 International Business Company (Offshore) Law. This company type provides services solely to clients outside TRNC. Therefore if you are planning to make any sales to TRNC based customers you should choose one of the alternative company types. North Cyprus Offshore Company allows you not to pay Value Added Ta (VAT) on your sales and limits the Corporate Tax rate to 1% of taxable income. There is no tax withholding tax on dividends paid and no restriction on movement of capital to and from the company. Only cost you will incur is annual renewal of International Business Licence for 5,000 Euro per year. Another unique feature of North Cyprus Offshore Company is that this company allows for proxy Shareholders and Directors. Meaning your personal information remains hidden if you wish. Similar to other company types, you need to fulfil company requirements as set out by Cap 113 – Companies Law .However minimum paid-up share capital is 20,000 Euro instead of 100,000USD. Additionally, 500 Euro Application Fee is paid. Time it takes to incorporate is approximately 3-4 weeks. North Cyprus Offshore company attracts investors from all over the world in following fields: Travel Agency, Aviation Services, Finance, Consulting, IT, Online Services and Telecommunication. See a list of companies with North Cyprus Offshore company structure, proving the success of this company type,: Prodo Travel, Triplestar Aviation, Toma Finance, Ata Game, There are more than 300 offshore companies utilising this company type. Click Here to read more about North Cyprus Offshore Company.
Advantages of North Cyprus Company Formation
- Foundation of Legal Framework in North Cyprus is set during Colony rule of British Empire. Therefore all crucial laws surrounding Contracts, Companies and Mortgages are very similar to U.K. Laws in respective fields. (See section titled ”Legal Framework in North Cyprus”)
- North Cyprus is fully integrated with Internatinal Banking System with 6 multinational banks. Türk Ekonomi Bankası (Owned by BNP Paribas – Multi National French Bank), Garanti Bank (%40 owned by BBVA – Multi National Spanish Bank), HSBC Bank (Owned by HSBC – Multi National UK Bank) Ziraat Bankası (Largest Turkish Bank by number of branches), İş Bankası (Largest Turkish Bank by Deposits – Among top 100 Banks in the World) and Halk Bankası (Another large Turkish Bank).
- In No other Low-Tax/No- Tax jurisdiction you can get direct access to such a number of multinational banks.
- Contrary to common belief there are NO EMBARGOES in international funds transfer in US Dollar, Euro, GBP or ANY OTHER international currency. International trade of North Cyprus with third party countries (Countries other than Turkey and North Cyprus) amounts to more than 1 Billion USD as per TRNC Central Bank Publications, where North Cyprus currently has more than a million Tourist a year and has more than 100,000 University Students currently studying.
- Cost to incorporate a North Cyprus Company is cheaper than other comparable Low-Tax/No-Tax jurisdictions. In alternative locations minimum cost to deposit goes up to $50,000 and no immediate option to pull your funds out. In other locations with no deposit requirements the cost to incorporate easily reaches $1000’s.
- Foreign Investor rights are protected by 69/2002 Foreign Investment Law. The law guarantees 1) Equal treatment as a Local Investor, 2) Against nationalisation 3) Free Movement of Capital (Which was a severe problem for South Cyprus in 2012 South Cyprus Economic Crisis)
- If you wish to base your operation in North Cyprus, than you will also benefit from favourable exchange rate of Turkish Lira against USD/GBP/EURO.
- Pro Cyprus Solution and Pro European Union stance in North Cyprus is very strong. Large increase in real estate values are expected in a potential solution scenario. You can simply compare the Villa Prices in Limassol (South) and Kyrenia(North) and see the pricing difference yourself.
Legal Framework in North Cyprus
The foundation of Turkish Republic of Northern Cyprus Legal System is laid during British Empire Colony rule in 1940s and 1950s. In fact most of the fundamental laws surrounding commerce in North Cyprus is one-to-one copies of U.K. Laws enacted during this period. Cap 113 – Companies Law (which is the longest and most comprehensive law in North Cyprus) is almost a one-to-one copy of UK Companies Act 1948. By clicking on the links you can find out about the similarities yourself (see Cap 113 – Companies Law Cyprus). North Cyprus Companies are set on sound foundation with UK legal framework. Another major legislation that affects everyday business dealings is the Contract Law. Similar to Companies Law, North Cyprus uses, fundamentally all features, of Cap 149 – Contract Law as enacted in 1959. Another UK alike fundamental legislation is around Lending Laws. Turkish Republic of Northern Cyprus utilises the legal framework of United Kingdom Case Law. Where outcome of cases whether in North Cyprus or U.K. (or any other location with British Laws in place), are applicable in North Cyprus Court of Law.
Why should you work with Celebioglu &Co Chartered Accountants?
We are operating as an Institute of Chartered Accountants of England and Wales – ICAEW Member Firm. We are one of the few Accountancy Offices, including Turkey, with such credentials. Therefore you know that you are getting your money’s worth in professionalism and due care with highest ethical standards unparalleled in North Cyprus. We also aim to have the most qualified workforce to serve you better. Professional services that you will get depend on the quality of the workforce we have as an office. Hence we have an ongoing cooperation with Association of Chartered Certified Accountants providing excellent trainee development services for our workforce. Additionally, our staff is up to date with its knowledge of International Financial Reporting Standards – IFRS. Hence we can provide you with accountancy services that are acknowledged by your investors all over the World. As you see from our internationally renowned qualifications, certifications and experience, we are aiming to provide you the level of service you can get at world’s largest financial centre’s from the warm and sunny climate of North Cyprus. Large portion of our client portfolio consists of international businesses and high net worth individuals with investments all over the world. We aim to give you latest knowledge about world markets and help you utilise latest regulations to your benefit. Whether your investments are in North Cyprus or anywhere else in the world, our office is capable of providing you services that will rival that of top firms in London or New York with additional personal touch that you cannot get from them. You can find our columns and TV coverage from Press section.