Looking for a reliable jurisdiction with a dynamically growing economy that offers plenty of advantages to non-residents? Northern Cyprus is a popular destination that you are sure to appreciate!
Northern Cyprus, a Prime Destination for Businesses
Cyprus has a really advantageous geographical location. It stands right at the crossroads where Asia, Africa, and Europe meet. Your Northern Cyprus company will quickly reach a considerable number of markets.
However, it’s not all about geography: you are sure to take advantage of other benefits here. As the government is focused on stimulating measures to boost the local economy, it does its best to offer incentives that are sure to attract foreign investments.
Northern Cyprus is a tourist paradise as crowds of people come here to enjoy the mild Mediterranean climate, spectacular natural landscapes, and beautiful sandy beaches. The country’s cultural heritage is also worth taking a look at. As a result, the tourist industry is growing at a tremendous pace, attracting many related businesses to have their share of profit.
If you need local employees, you will find plenty of well-trained workforce here. All of them speak Turkish, but there are also enough English speakers as the country was once a British colony, which left its mark.
If you are interested in the local real estate market, you are welcome to take advantage of the wide range of opportunities it offers. You can rent any piece of residential or commercial property to your liking—there is something to choose from!
Non-resident entrepreneurs come to take advantage of the destination’s advantageous taxation system, among other things. You are not supposed to pay any inheritance tax, and the profit tax is charged at a very moderate rate.
If you are considering Northern Cyprus as a place to live, do not hesitate to get a business visa and settle down here. You will surely appreciate the country’s high living standards.
International Company: Basics
We call a company international if its business operations are conducted in foreign countries other than the country where it is incorporated. Here are the main features that distinguish such legal entities:
- They usually set up branches and subsidiaries in other countries that they fully control
- It is typically the company’s head office that exercises the controlling functions
- The company’s subordinated units located abroad are engaged in practical cooperation with each other.
Transnational corporations with production facilities scattered all over the world can also be called international companies. However, having a broad presence in many countries is not easy. Such giants face numerous risks, including currency rate fluctuation, political and economic instability, changes in administrative regulations, restrictions imposed by customs, and so on. Still, the opportunities for business expansion that they get usually outweigh all the possible menaces.
Choosing a Legal Form
Foreign entrepreneurs typically opt for a Limited Liability Company (LLC) in Northern Cyprus as the most practical and convenient entity to set up. Here are the main characteristics of a local LLC:
- You are required to have at least two company owners.
- Two mandatory positions have to be filled: director and secretary.
- The required authorized capital is 20,000 euros. The total amount is blocked on your bank account during the incorporation procedure (it usually takes two to four weeks).
- The nominal legal address will be considered the address of company registration.
- Not all kinds of business activities are permitted. However, the list of those you can choose from is quite long: advertisement, online trade, online tutorship, tourism, consultancy, IT services, import and export, and so on.
Any foreign entrepreneur who opts for Northern Cyprus should keep in mind that a critical restriction will apply to business activities: a locally registered international company is prohibited from carrying out any business operations within the jurisdiction or concluding any commercial agreements with local businesses. All commerce is limited to any other country outside Northern Cyprus.
Northern Cyprus Company: Benefits
In a nutshell, you will take advantage of the following beneficial conditions if you decide to set up a legal entity in Northern Cyprus:
- The profit tax rate is as moderate as it can be (1%).
- You will not have to pay any CAT or corporate income tax.
- You will be able to use the services of Turkish bank branches that provide all the financial services that business owners need, including SWIFT and IBAN.
- No limitations are imposed on non-resident corporate bank accounts: you can freely use them for incoming/outgoing payments.
- International business activities can be conducted without any restrictions.
- You will not have to pay taxes on dividends, and you are free to transfer them to any country.
There is no requirement for business owners/directors to be local residents; they can live in any country. The company is required to elaborate By-laws to regulate the hiring and dismissal of company directors.
Company Registration in Northern Cyprus: Step by Step
Start by thinking about a name for your company. It seems an easy thing to do until you ask yourself whether it will resonate with your audience, remain relevant when you expand your operations, and so on. What is more, it should be unique! So there is some work to do here.
Here are the following steps:
- Prepare official documents.
- Get reference letters.
- Submit an application to the Council of Ministers of Northern Cyprus to obtain company registration permission.
- File the application documents package with the registration bodies.
- Pay all the required state duties.
- Make sure your bank account contains the amount that equals at least the minimum authorized capital.
- Receive a package of documents that confirms your company registration.
- Pay all the applicable registration fees.
- Register your company with the local tax authorities.
- Set up a business account with a bank in Northern Cyprus.
You can handle all these steps on your own if you have sufficient experience in international business. However, if this is not your case, you may need expert help. It will include:
- Consultancy on tax matters
- Monthly submission of tax reports
- Consultancy on any matters related to business and obtaining a license
- Accounting services
An international legal entity incorporated in Northern Cyprus is required to pay annual fees:
- Profit tax (1%)
- Fee for accounting services and nominal legal address (EUR 11,000 annually)
- Fee to keep your international business license valid (EUR 13,000 annually)
Interested in Northern Cyprus but have no idea how to start? Need an answer to a specific question that will help you make a decision? Follow the above link to talk to a qualified expert free of charge using a live chat.
