In general, many entrepreneurship ideas appear in the minds of those who come to Northern Cyprus for the first time or for a seasonal holiday.
Like “if I do x business here, I will make a lot of money”. Or there are those who live in the TRNC, work in an institution and think that it is time to start their own business.
The subject they quickly research is establishing a company in Northern Cyprus. When you look at it, you can think of it as a simple procedure that can be done anywhere in the world after paying the installation cost.
However, establishing a company is something that should be taken more seriously in Northern Cyprus.
From the idea of establishing a company, it is important to get support from an expert who really knows the business and the market you are thinking of.
Financial consultancy offices carry out the establishment of a TRNC company. Financial advisors are also called auditors in Northern Cyprus.
The institution that oversees the establishment of companies is the TRNC Registration of Companies. Let’s start in order.
Why would you want to establish a company in Cyprus? Or why is it wanted?
– To have a job
– To avoid paying less tax than your current country or even no tax if possible
– To carry its brand and experience to a new country market Generally, those living in the TRNC prefer the first option and set up the company to have a business.
Especially if the owner company in Turkey, Northern Cyprus TRNC tax companies as the model for the Free Zone Company assesses the options.
What are TRNC Company Types
A company type sole proprietorship established by individuals who want to operate in any field in Northern Cyprus, is real persons, by registering their names.
It is the fastest among company establishments and has the lowest cost of establishing a TRNC company.
But let’s share the most critical detail. Only TRNC citizens can establish the Cyprus sole proprietorship model.
If you are not a TRNC citizen, you cannot own a private company.
This type of responsibility, also known as Cyprus sole proprietorships, belongs to a single person, that is, the creator of the business.
After the approval process of the Registrar of Companies, the only addressee of the TRNC Ministry of Finance and the TRNC Revenue and Tax Office becomes the owner of the business, not the workplace.
For example, while the tax debt is written to the company in limited companies, it is written to the business owner here. In other words, while there are people who close a limited company due to debt and establish a new company, you cannot do such a thing in a private company. It appears all the time. For the documents requested in the establishment of a private company, we can only call identity card.
It is the most preferred type of company in Northern Cyprus by both TRNC citizens and foreign investors.
The limited company has a partnership structure. It needs to be established with at least two partners. If the company’s shareholders are TRNC citizens, there is no obligation to show capital. If the citizens of Turkey or other countries, 50 thousand Euros for the completion of the Bond company organizations need to take.
Previously, this blockage amount was 100 thousand dollars. After the company establishment is complete, you can use this money again.
In a limited liability company structure, you need to appoint 1 director and 1 secretary. Director means responsible manager. He has all the signing authority for the company, not the shareholders. If your director is not a TRNC citizen, you need to bring 10 thousand dollars and 18 months of guarantee under the name of tax security.
There are two types of branch company establishment in the TRNC.
– TRNC Branches of Foreign Companies
– Branches of Local Companies The agency that manages the process for foreign companies is the Ministry of Economy.
The establishment is completed by bringing the capital amount to be determined by the Ministry to the country.
Free Zone Port Company, type of company located in Famagusta Free Zone.
The most important feature that distinguishes Free Port companies from limited companies is that they are not subject to Corporate Tax, Income Tax and VAT.
Of course, the only condition is that companies should carry out their activities abroad or within the free port zone within the island.
Otherwise, you cannot use this company type. Generally, international shipping companies and IT companies prefer this type of company.
If you look at the contact details of Turkey’s many famous brands server and domain, Cyprus – referred to as Famagusta. Here they are among the ones who established a free zone port company in TRNC to use the tax advantage.
This company model, also known as a North Cyprus tax-free company, is frequently sought by entrepreneurs.
For establishing a free zone port company, you must work with a good financial advisor. Especially if you are going to operate abroad and will not travel to the TRNC frequently, it is useful to entrust your accounting to safe hands.
About Company Establishment in TRNC Frequently Asked Questions
As everywhere in the world, you first need to find a good business idea, business plan and a name related to your business.
Then, you can start the process by applying to a firm you trust among the TRNC financial advisors.
The establishment of your company is completed after completing the documents and investments that the ministry and tax office will request from you during the establishment of the TRNC company.
If you say how many days it takes to establish a company in the TRNC, do not get too hoped with short-term promises, it takes an average of 1 month.
Because many operations are still done manually.
The TRNC financial advisor with whom you will work in this process will guide you in the best possible way.
They usually provide a pre-establishment cost table and a presentation file with the required documents.
Your ID / passport is required to get started first. Second, you have to choose a good name.
Because TRNC Registrar of Companies is a bit sensitive about name approval. If there is even similarity, they can give refusal. That’s why a unique name is important. (This is why names and surnames are generally given to companies)
If you are a TRNC citizen, there is no such requirement. However, the capital requirement of Northern Cyprus for foreign investors decreased to 50 thousand Euros with the last update. It was previously 100 thousand dollars. You have to deposit 50 thousand Euros to the bank close to the completion of the establishment and receive a written letter of guarantee on behalf of the company you will establish in return.
This name issue is very, very important. After the installation process is complete, you can unblock and use your money.
If you do not have such a savings, some financial advisory offices or banks solve the capital process for you by charging daily interest.
Unfortunately, this is a constantly updated figure with the increase in fees.
You can think of the cost of establishing a TRNC company as an average of 10.000 TL in 2021.
After the establishment, you will have to pay a monthly financial consultancy service fee. It is between 750-1000 TL on average for small-scale companies.
Many financial advisory offices can receive payments by credit card.
This is one of the most curious subjects.
This tax is paid on earnings that are not distributed after deducting corporate tax.
The Northern Cyprus income tax rate is 15 percent.
The TRNC corporate tax rate is 10 percent.
The institutions that pay the corporate tax in the TRNC are published in newspapers every year. Tax record holders attract great attention.
Northern Cyprus value added tax rate is 16 percent.
However, there is a VAT advantage for some sectors. We recommend that you ask the current table before the company establishment.
A type of permit obtained for foreign business owners who are company directors in Northern Cyprus. Business permit is renewed every year.
We can say that it is similar to the flow of work permit. The process is usually run by the financial advisory office you work for. Documents required when obtaining a business permit:
2 Copies of Business Establishment Document
“No Debt” articles from the Social Insurance,
Provident Fund and Tax Office of the workplace Approval Documents for the current year (Original)
Passport Copy (Picture Page, Back Page and Pages with Valid Visa)
Photocopy of the Page of the Company’s Registration Number (Photocopy of the Pink Card)
Certificate of Receipt from the Social Insurance Office on behalf of the Employer (SS2)
Company Statute (Main Contract) If the Tax Liability Certificate is carried out by a power of attorney, the Power of Attorney
This is the type of permit issued for foreign national staff working / working in your company.
There is no need for such a permit for TRNC citizens, you can start work quickly. But you have to remove a work permit if you bring staff from abroad, including Turkey. (If you are a third country citizen, you also need to deposit in the bank.) At first you preview it.
Documents required for pre-application application:
1 Set of Pre-Permit Form Documents showing that the workplace has no debt from the Social Insurance, Provident Fund and Tax Office
Letter of Bank Guarantee if you are a 3rd country citizen
Passport Copies Power of Attorney if carried out by power of attorney Eligibility
Approval for Employment from the Labor Office
Work permit is issued in 6-month or 1-year periods. It is renewed by applying the same procedures.
If the employee leaves the institution that received the leave, the leave must be revoked within 30 days. Otherwise, they may be fugitive and deported from the country. Let’s share one more note.
Work permit or who have permission to set up in business should always use passports traveling between Cyprus and Turkey. They cannot travel with ID.
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