If you’re thinking of relocating to North Cyprus with a view to starting a new business, or even perhaps relocating your current business to the island, there are many things to consider! Initially it can be very confusing, we will not tell you otherwise, but once you have done the deed and you have all that is required, then things can be relatively straightforward and problem free in terms of running your business on the island.
There are also other reasons for setting up a company in North Cyprus, for example you may want to purchase land of over one donum – which is the limit for a foreign purchaser unless they buy through a limited company.
First things first, you will definitely require the services of a good solicitor and an accountant. There is so much to do in terms of sorting out taxation and in terms of understanding company structures, legal process, registrations and the like, that it is best left to the experts, and there are some very good ones around too. In fact, you cannot do without either an accountant or a solicitor really as they will apply for all the government permissions required to give approval for your business to start.
If you would like details or to be referred to a reputable accountant in North Cyprus then please get in touch and we can advise you.
We will not detail the whole process in this article, as it would possibly be too tedious a read and something which could prompt further questions rather than providing answers! Suffice to say, if you are looking into the possibilities, then at least we can give you some initial guidance.
For any person of foreign origin wishing to set up a business in North Cyprus there are certain processes and procedures applicable. Firstly appoint a solicitor to advise you with regard to your business requirements, as there are different rules depending on the type of company you want to set up. Despite differing statements to the contrary, you may not necessarily have to appoint a Turkish Cypriot partner as a majority shareholder. You may also wish to think about an appropriate company name at this point.
At the time of writing, it will also be necessary to deposit an amount of 10,000 USD into a bank account in North Cyprus, which will be needed as proof of funds for the duration of setting up the company. However, a bank statement is all that is required as proof. The director of the company will also be required to deposit a sum into a bank account which will be frozen until such time that the company is sold or closed, relieving the director of their responsibilities. At the time of writing this was 10,000TL.
In order to form a company (limited or not) you need to instruct a local accountant to make appropriate applications to the Council of Ministers. This will encompass requirements of company intentions, operations, owners, share capital, directorship and so on.
With regards paperwork and other documentation involved in a company’s formation, you would require a document of Memorandums and Articles which reiterates all the above in relation to the company’s function, management structure and share information. Your solicitor will normally deal with this for you, as it will need to be passed by the relevant government offices such as Companies House.
You will also need a business permit (a stamp in your passport), which is specifically issued to the directors of a company and which is different to work or residency permits. Permits will be issued after the relevant medical tests which the majority wishing to reside in North Cyprus has to obtain. Various other permits may be needed, dependent on your company’s remit, for example if you are running a restaurant serving alcohol then a beverage license needs to be obtained from your local council department.
On the cost and financial side of things, apart from the costs which we have already detailed above, once your company permission has been granted you will need to register with the tax office, the social security and pensions departments. The costs vary depending on company turnover, but there will be costs involved for any workers you employ, the paying for their permits and their monthly state contributions. As a director, at the time of writing you would be responsible for a state contribution every 3 months and which is a minimum of 980TL. Again though, it is worth checking costs with your accountant, as these do change from time to time.
You will also require company certificates such as a tax authorisation certificate and a certificate of company incorporation which have to be displayed in your premises at all times should there be spot checks by the local council authorities. You will also be given your company’s registration documents which must be kept in their original form for any future amendments, and must never be mislaid or lost!
So, that is the outline by which you should base any decisions on the formation of a company in North Cyprus. It is not an easy process, with much paperwork to be completed, but if you find the right people to help you it can take only a matter of weeks to complete, leaving you free to run your successful business!