Can a foreigner register a company in Northern Cyprus? If it is possible, then would it make any sense to do that given the fact that the jurisdiction is not recognized by any country apart from Turkey? While the answer to the first question is affirmative, you might think that the answer to the second one should be negative. Not necessarily. In spite of its shaky legal status and a controversial political position, the Turkish Republic of Northern Cyprus (TRNC) has been successfully doing business for years.
It is true that you would not be able to use your TRNC-based company to trade with companies in other countries but if you would like to do business with Turkish partners, establishing a company in Northern Cyprus would be a perfect choice. You will find many opportunities (including tax benefits) that are unavailable in Turkey. Below we discuss why you should consider registering an offshore company in the TRNC and how you could do that.
Conditions for opening a company in Northern Cyprus
You can become a legal resident of the TRNC if you purchase real estate in Northern Cyprus and we discuss this opportunity below. Please note that you do not automatically become a legal resident of the TRNC by purchasing property there: you have to meet some additional conditions. However, when you have established legal residence in the jurisdiction, you are eligible to apply for company formation.
This said, however, you do not have to become a legal resident of Northern Cyprus to be able to register a company there. You can partner with a local person or legal entity to form a company in the jurisdiction. The local person/ company can be a co-owner of the business venture or he/ she/ it can act as your representative in Northern Cyprus who will maintain contacts with various governmental agencies including the tax committee.
The procedure of company formation
You have to meet certain criteria to be able to establish a company in Northern Cyprus:
- When the company is formed, it has to have at least US$ 5,000 in its bank account;
- When the company is in operation, the security balance has to be at least US$ 30,000;
- A qualified and experienced notary public has to handle the procedure of company registration (his or her fee starts at US$ 1,500);
- If you are going to hire personnel, the number of local company workers has to exceed the number of foreign workers by 3 times.
The good news is an offshore company does not have to rent or buy an office in Northern Cyprus – it can have an office anywhere in the world.
Specifics of business procedures in Northern Cyprus
Certain restrictions are in place in the TRNC that are related to performing business operations in the jurisdiction:
- An offshore company registered by a foreigner cannot borrow money from local banks, companies, and individuals;
- The company has to be engaged exclusively in the types of business activities listed in its By-laws unless you register a Free Zone Company in Famagusta;
- All the corporate records have to be kept in the Turkish language;
- No VAT is charged in the jurisdiction and all other taxes are paid quarterly (if your offshore company owns real property or other assets beyond Northern Cyprus, no taxes are charged on that);
- A 1% tax is payable on any money that comes to the company’s bank account.
An offshore company in Northern Cyprus can engage in any types of legal business activities with the exception of casino, gambling, and betting services.
Mandatory payments
When the company is registered, you will have 30 days to make a one-off payment of US$ 5,000. There is one more fixed payment of US$ 4,000 that has to be made in January each year. You have to add another US$ 2,500 to this sum as the company maintenance costs. As you can see, the overall operational costs are not too high in Northern Cyprus for an offshore company.
Northern Cyprus – a place to invest in foreign property
Northern Cyprus is a paradise-like place in the Mediterranean Sea that gives visa-free access to visitors from many countries. The combination of a wonderful climate, beautiful nature, and comparatively low property prices makes Northern Cyprus highly attractive for those people who would like to invest in foreign property.
Advantages of investing into property in Northern Cyprus
A significant advantage that real estate in Northern Cyprus boasts is its affordable price. You won’t find such prices in any other place in Southern Europe. Moreover, the prices for real property in the TRNC are several times lower than they are in some other Mediterranean resorts while the quality of the building as well as the building management services is quite comparable.
Another important advantage of the jurisdiction is the fact that it is rapidly developing and its economy is growing. New residential complexes are appearing in Northern Cyprus at an amazing speed. What is more, the property prices never go down: they only grow in Northern Cyprus. This means that the jurisdiction offers fantastic opportunities for long-term investments.
Comfortable life and a sea of impressions
Apart from investment attractiveness, Northern Cyprus is a very nice place where you could live. The most obvious advantages of the jurisdiction are as follows:
- A warm climate with more than 300 sunny days per year;
- An advanced infrastructure: shops, parks, business centers, and so on;
- Visa-free entry for many nationalities and a legal residence program;
- Competitive property prices;
- Good environmental conditions and unique nature of a Mediterranean island;
- High quality of educational services available at prices much lower than they are in Europe;
- A stable economy and a non-interfering Government;
- Friendly attitude to immigrants on the part of locals;
- Comparatively low prices for food, clothes, utilities, and so on. Prices in Northern Cyprus are much lower than they are in continental Europe;
- Not too many tourists;
- Flexible business regulations and a small tax burden for private entrepreneurs;
- The crime rate is close to zero.
Consider investing in real property in Northern Cyprus
With professional support, you can choose a piece of property in Northern Cyprus that is simply perfect. Modern residential complexes have all the amenities that you can think of. You can make Northern Cyprus your home or you can go there on vacations. Alternatively, you can rent your property out thus obtaining a source of passive income.
The recent pandemic has taught us that many things can be done from home, as a matter of fact. You can choose the property in Northern Cyprus from the comfort of your home because local realtors offer virtual tours of the villas and apartments in residential complexes. The purchase agreement can also be made remotely.
