Nursal & Co. provides consultancy services for the incorporation of companies under the Companies Law, Partnership and Business Names Law, Free Port and Zone Law, International Banking Unit Law and International Business Unit Law. In addition, the firm provides consultancy services for trademark registrations.
Companies in TRNC:
Citizens of TRNC are can carry on business in their own name or under a business name registered under the Partnership and Business Names Law, Chapter 116. In this type of business, the person who owns the enterprise are responsible from the entire responsibility for its management and operation. The sole proprietorship for enterprises are subject to Income Tax and not the Corporation Tax.
Partnership is the relationship between two or more persons carrying on a business in common with a view to profit. In a general partnership every partner is liable jointly with the other partners for all debts and obligations of the firm. In a limited partnership there is at least one general partner with unlimited liability and one or more limited partners who are not liable beyond the amount of capital they have contributed.
All types of companies in TRNC are given below. All companies in TRNC are registered to Registrar of Companies.
Local Private Companies
The Company is subject to Companies Law Chapter 113. There should be at least two shareholders an one director (who can not be secretary at the same time). There is no necessity to have local directors. There can be maximum 50 shareholders.
Shares can not be sold to public, unless present shareholders declare that they don't want to buy further shares.
Local Private Companies are subject to Corporation Tax. Corporation Tax is 10% of the Net Profit of the company. Further 15% is charged as Income Tax, making the total tax to 23.50%.
Foreign individuals or companies can become shareholders in a TRNC registered company after securing the approval of the Ministry of Economy. The paid up capital of such a company is determined by the Ministry and must be remitted to TRNC before incorporation.
Public companies must have a minimum of seven shareholders and at least two directors.
Public companies have the power to extend an invitation, through a prospectus, to the public to subscribe for its shares or debentures.
Local branches of overseas companies are companies which has the head office and the place of registration in a country outside the TRNC. These companies operate under the same conditions as Local Private and Public Companies and subject to the same rate of taxation.
Overseas companies may establish a branch in TRNC provided they obtain the approval of the Council of Ministers, remit to TRNC as capital the amount determined by the Ministry of Economy in cash or in kind.
Free Zone Companies
Free Zone companies are subject to number 26/1983 Law on Free Zone and Port and their registration and supervision is made in accordance with Companies Law, Chapter 113.
The company must have at least 2 shareholders. Companies having foreign investors as shareholders must have a minimum of USD 100,000 paid up share capital. Companies operating in Free Zone carry out their activities through their place of business or by having a post box as an adress.
Companies operating in Free Zone are exempt from the TRNC corporation tax for the activities they perform within the Free Zone and outside the TRNC. However if company have sales to the TRNC, it will be subject to Corporation Tax and Income Tax.
Companies operating in Free Zone, like all other companies, are required to calculate income taxes (PAYE), social security premiums and provident fund premiums of their employees and make payments for them.
The following fees are payable to the Free Zone Directorate;
USD 200 Application Fee
USD 2,500 Registration Fee and
USD 50 for each set of certified documents of the company.
International Business Companies
All kinds of activities of International Business Companies stated in their memorandum of association shall be foreign oriented (Off-shore) and their income shall be derived from abroad.
Paid up share capital can be minimum 20,000 (Twenty Thousand Euros)
International Business Companies are subject to %1 (one percent) tax on their taxable income determined in accordance with the regulations in the Corporation and Income Tax Laws. The Corporation Tax is paid to Inland Revenue within 5 (five) months following the end of the financial period.
International Business Companies can open any kind of account including a deposit account in the banks operating in the Turkish Republic of Northern Cyprus. The withholding tax on the interest cannot exceed the International Business Companies tax rate of 1%. The withholding tax forms the final tax liability of the interest income of the International Business Companies and in case of losses or in any other way this tax cannot be offset or refunded. However The International Business Companies cannot obtain loans from the Government or from any local bank or investment companies in TRNC for financing their investment projects.
International Business Companies are not subject to customs duty in respect of the products listed below, except for the Contributions to Defence Fund:
Motor vehicles (buses, motorcycles are not included)
Office equipments (air conditioners and consumer goods are not included)
Household goods (furniture and air conditioners are not included)
Dividends paid to International Business Companies shareholders are exempt from income tax.