The strategic location of the Turkish Republic of Northern Cyprus (TRNC) at the crossroads of Europe, Asia, and Africa presents significant opportunities for foreign investors. The republic’s economy has been expanding rapidly, with an annual growth rate exceeding 5%. The TRNC government fosters an investor-friendly environment by reforming the tax system and providing various incentives. Establishing a company with foreign capital in Northern Cyprus is a lucrative option for those looking to broaden their business horizons. Let’s delve into the process and see what obstacles you can encounter on the way.

Advantages of Establishing a Company in Northern Cyprus

The Turkish Republic of Northern Cyprus (TRNC) provides numerous benefits to foreign business people due to its investor-friendly policies and strategic location. Here are some critical advantages of establishing a company in Northern Cyprus:

• Stable currency. The local currency, backed by robust support from Turkey, remains steadfast, guaranteeing minimal fluctuations and a dependable economic environment.
• Straightforward registration process. Setting up a company is simple, primarily when handled by professionals, making it easy to establish your business with minimal effort.
• Tax benefits. Sometimes, the corporate tax rate can be as low as 0%, providing significant tax savings.
• Currency accounts. Business owners in TRNC can open personal or corporate accounts in local banks, providing global access to their funds.
• Customs duty reduction. The customs duty on importing transportation and office equipment is just 3.5%.

Furthermore, businesses in Northern Cyprus enjoy a simplified financial monitoring and tax accounting system. This system enables cash and cashless settlements with minimal oversight from local fiscal authorities, reducing the risk of account blocking and streamlining document flow. These advantages make Northern Cyprus an appealing destination for expanding your business operations.

LTD Registration in Northern Cyprus

We offer comprehensive support for establishing an LTD (Limited Liability Company) with foreign investment in Northern Cyprus.

Advantages of Registering an LTD:

• Unrestricted access to the TRNC market. Operate within the internal market of TRNC without limitations.
• Flexible fund management. Quickly deposit and withdraw funds from LTD accounts.
• Banking services. Access services at Turkish bank subsidiaries, including SWIFT and IBAN.
• Work visas. Obtain work visas for all company employees.
• Path to permanent residence. Qualify for permanent residence after six years of residing in TRNC.
• Citizenship eligibility. Potential to acquire citizenship after ten years of continuous operation.

Organizational and Legal Details

• Legal form. LTD (Limited Liability Company)
• Minimum number of co-owners. 2
• Mandatory full-time positions. Secretary, Director
• Authorized capital. 25,000 euros, with 100% of the capital blocked in the bank during the company establishment period (2–4 weeks)
• Place of registration. Requires an actual legal address

Limitations

• Property restrictions. Cannot purchase residential or commercial real estate within TRNC.
• Activity restrictions. Certain activities are restricted, including tourism, construction, medicine, real estate sales, currency exchange, and factoring.

By establishing an LTD in Northern Cyprus, you can take advantage of a supportive business environment, strategic location, and a pathway to long-term residency and citizenship. Let us assist you in navigating the registration process to establish your business successfully.

Below are the documents required for submission:

• Apostilled certificate of no criminal record. An authenticated certificate indicating no criminal record.
• IDs (passports) of all LTD founders. Identification documents for all founders of the LTD.
• Proof of residence. Documentation confirming residence in TRNC.
• Bank statement. Evidence of funds equivalent to the company’s authorized capital must be deposited and blocked in a Cypriot bank.
• Letter of guarantee. A bank guarantee letter, addressed to the company’s director, in an amount equal to 10 times the minimum monthly wage, should remain valid for two years.

Ensuring the timely submission of these documents will facilitate smooth registration for your LTD in Northern Cyprus.

Important Considerations

Consider these key points before registering a company with foreign capital in Northern Cyprus:

1. Comprehensive Articles of Association. Ensure that the main corporate document includes all planned activities of the organization. This is crucial as any amendments to this clause will require a court decision.
2. Activities prohibited for foreign capital companies. Be mindful of activities prohibited for companies with foreign investment, such as construction and healthcare.
3. TRNC citizen requirement. An operation may require a TRNC citizen to hold a 51% share in specific sectors. The distribution of founders’ shares typically ranges from 90% to 10%.
4. General Agreement details. The general agreement should specify the maximum number of company directors and the minimum percentage of votes required for director replacement.

Considering these peculiarities will help ensure compliance and smooth operation for your company with foreign investment in Northern Cyprus.

The company registration process in Northern Cyprus involves the following stages:

1. Name check. Verify the uniqueness of the selected company name.
2. Drafting corporate documents. Prepare corporate documents, including Articles of Association and General Agreement.
3. Bank letters. Obtain letters from banks.
4. Document preparation and submission. Prepare remaining documents and submit a complete package to TRNC registration authorities.
5. Payment of duties. Pay applicable duties and levies.
6. Receipt of constituent documents. Receive the company’s constituent documents.
7. Registration with tax authorities. Register the LTD with tax authorities.
8. Bank account opening. Open a bank account with a local credit and financial institution.
9. Permit acquisition. Obtain a permit (license fee is separate) for the primary type of LTD activity.
10. Municipal register. Record company data in the municipal register.
11. Ministry registration. Record company data in the Ministry of Labor and Pension Fund register.

Company Maintenance Expenses

If you’re considering registering a company with foreign investment in Northern Cyprus, factoring in the associated maintenance expenses is essential. Here’s an overview of monthly and annual costs:

Monthly Expenses:

– Accounting services and nominee founder: EUR 1200

– Payroll taxes (social insurance, pension fund)

– VAT: Typically ranges from 5% to 20%, depending on the type of goods or services

Annual Expenses:

– Extension of licenses

– Permits from municipal authorities: For signage and office rental

– Obtaining or extending business visas for directors and founders

– Obtaining or extending work visas for employees

– Income tax: Typically 23.5%

If you want to live and work in a beautiful European destination with favorable conditions for foreign investors, contact our experts today for guidance and assistance! Click the link above to receive initial professional assistance at no cost.

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