Northern Cyprus - IBC Company Incorporation

Company Type	Time to Incorporate	Cost
IBC	3 weeks	email us for a quote

The Offshore Company in the Turkish Republic of Northern Cyprus

The Northern Cypriot International Business company is:

• Not strictly speaking an offshore structure, as 2% Corporation Tax is paid on net profits
• There are no withholding taxes on dividends paid out to foreign shareholders
• Laws are based on the UK Companies' Acts, and professionals such as lawyers and accountants have often been educated in the UK
• There a no exchange controls within Northern Cyprus, with the exception of IBC companies involved in activities which generally require special licenses
• It is easy to open bank accounts, and the bank accounts can be administered outside Northern Cyprus

Guidelines of a Northern Cypriot IBC company

• All shareholders need to be non-residents
• All profits need to be generated from activities carried outside Northern Cyprus

To take advantage of IBC status for the company:

• Your company is not permitted to work with Northern Cypriot residents
• The company must be financed from outside the jurisdiction
• An audit is required for the Company
• Audited financial statements need to be lodged
• Shareholders need to be non-residents

Corporation Tax

Only at 2% on net profits. Tax is calculated after:

• Capital gains on the sale of foreign assets - which are exempt
• Capital allowance on any assets
• All costs of maintaining the company

Withholding Taxes

There are no withholding taxes on dividends, bank interest for a non-resident company, or for foreign funds lodged with a bank in the jurisdiction. Also there is no withholding taxes on management charges, salaries for non-residents or on the transfer of shares in these companies.

Shareholders

Minimum number of shareholders are two.

Northern Cyprus Company Incorporation - IBC

If a shareholder is a person

• Photocopy of the shareholders’ passports. Where the directors to be appointed are different, the photocopy of the passports of such persons too.
• Character reference i.e. clean police record of the shareholders who are not of EU or Turkish origin. Foreign persons who are to be directors, irrespective of origin, must provide a clean police record.
• Foreign persons who are to be appointed as directors to the company need a letter of guarantee from a local bank – value 10% of share capital (minimum amount of 5,000YTL, approx £2,200) for a period of 18 months in respect of their possible tax liabilities in Northern Cyprus

If a shareholder is a limited company

• Certificate of incorporation
• The Memorandum and Articles of Association of the company including the latest amendments
• The registered office of the company
• List of Directors, their addresses and nationality
• List of major shareholders (latest) names, addresses, nationality and number and value of shares held
• Photocopy of all directors’ passports as well as those of the major shareholders
• Character reference of all directors - a statement from the National Identification Service, police or attorney general stating that the person concerned has no criminal record
• A statement from the local chamber of commerce or other related body i.e.  Bankers Association, Lloyds Insurance etc .stating that the company is presently active and operating
• The last two years audited accounts

A board decision in respect of their envisaged investment in Northern Cyprus which should also incorporate the name of the person or persons authorised or empowered to sign the Memorandum and Articles of Association of the proposed company and to undertake to subscribe and/or purchase for and on behalf of the company the said number of shares.

If a shareholder is a non-limited company

If the prospective foreign investing company does not want to register a limited company, it can, as an alternative and subject to the approval of the Council of Ministers, establish a place of work in the Northern Cyprus as a foreign or overseas company.

In such a case, the list of company documents to be submitted to the Registrar of Companies which need to be notarised where available at the Northern Cyprus Office or the Turkish Embassy or Turkish Consulate are:

• The Memorandum of Association and Articles of Association together with all its amendments
• The latest list of the board of directors (name, address, nationality) together with photo- copy of their passports and their clean police record (for U.K. citizen from the National Identification Centre, Scotland Yard- see sample copy attached)
• The latest up-to date list of shareholders (name, address, nationality, number and class of shares held)
• A fairly up to date certificate from the local Chamber of Commerce and/or Chamber of Industry or other related body or association stating that  the company is a shareholder and that the said company is currently operational and/or  in business
• A resolution of the Board of Directors quoting that the company is intending to establish a foreign and/or overseas company in the Northern Cyprus, stating the line of activity to be carried out and the fact that they will  allocate or allot a minimum of $30,000 or an equivalent amount as working capital to this company
• A resolution of the Board of Directors giving the name and address of one or more resident Northern Cyprus citizen or company who has been appointed by the company to be registered, as their representative in the Northern Cyprus, authorised and empowered to represent the company, to receive official documentation and court orders or notices

All documents stated above must be notarised by the local notary and thereafter notarised  preferably by the Northern Cyprus consulate or the local Turkish Embassy or Turkish Consulate. As a last resort the above documents can be apostilled by a notary with the authority to apostille documents authorised to apostille documents under the La Hague Convention (not an ordinary notary).

Share Capital

Minimum share capital is $30,000 for trading companies and $40,000 for construction and/or property development companies which must be transferred to Northern Cyprus via a bank.

Please note that there are certain restrictions for foreign owned or foreign controlled companies in acquiring land. They need a Council of Ministers approval for any land acquisition.