Guide to Establishing a Company in the TRNC: Process, Types of Companies, Tax Advantages, and Government Incentives

Advantages of Establishing a Company in TRNC

Tax Advantages

One of the biggest advantages of establishing a company in TRNC is the tax exemptions provided. These exemptions, especially valid for Free Zone and International Business Companies, increase the profitability of businesses.

• Corporate Tax Exemption: Free Zone and International Business Companies are exempt from corporate tax.

• Income Tax Exemption: These companies are also exempt from paying income tax.

• VAT Exemption: Free Zone companies do not pay VAT.

Capital Freedom

Companies in TRNC can freely transfer their profits abroad. This is a significant advantage, especially for businesses engaged in international trade.

Language and Currency Compatibility

The official language in TRNC is Turkish, and the currency is the Turkish Lira. This facilitates business processes for investors coming from Turkey.

Geographical Location

TRNC is located at the crossroads of Europe, Asia, and Africa. This strategic location provides advantages in terms of trade and logistics.

Types of Companies That Can Be Established in TRNC

1. Local Companies

Suitable for entrepreneurs who want to operate locally in TRNC. At least two shareholders, one director, and one secretary are required. A registered address is mandatory.

2. Foreign Company Branches

It is possible for companies established abroad to open branches in TRNC. Approval from the Council of Ministers is required, and the parent company's capital must be at least 100,000 USD.

3. Free Zone Companies

They are established in the Famagusta Free Zone. They engage in activities aimed at foreign countries and benefit from tax exemptions. There is no requirement to set up an office or warehouse; a PO box address is sufficient.

4. International Business Companies

Suitable for companies providing services to foreign countries. They are exempt from all local taxes and pay a fixed tax of 1% of their profit.

Company Establishment Process

1. Name Approval: An application is made to the Registry Office for the company name.

2. Preparation of Articles of Association and Bylaws: The purpose of the company, shareholder structure, and other details are determined.

3. Collection of Necessary Documents:

   • Copy of ID or passport

   • Criminal record certificate

   • Residence certificate

4. Capital Blockage: At least 50,000 Euros of capital is blocked in the bank before the establishment of the company.

5. Application and Registration: An application is made with the necessary documents, and the company is registered.

State Incentives and Investment Supports

Various incentive and support programs are available for entrepreneurs who wish to invest in TRNC. These incentives may vary depending on the type and size of the investment.

Investment Incentive Certificate

This document issued by the State Planning Organization provides investors with various tax reductions and exemptions. Some advantages provided under the Incentive Certificate are:

• Customs Duty and Fund Exemption: Machinery and equipment to be imported are exempt from all customs duties and funds.

• VAT Exemption: 0% VAT is applied to imported and domestic machinery and equipment.

• Construction Permit Exemption: Exempt from fees, taxes, and all contributions related to building construction permits.

• Stamp Duty Tax Reduction on Capital Increase: Discounts are provided on the stamp duty tax to be paid during capital increases.

Entrepreneurship Grant Programs

There are various grant programs for entrepreneurs in TRNC. These grants, especially provided for young entrepreneurs, offer financial support during the business establishment process. For example, grants ranging from 10,000 TL to 150,000 TL are given to entrepreneurs born after 1987.

Establishing a Company in TRNC with ORTAC

As ORTAC, we guide you through the process of setting up a company in TRNC. We are with you at every step, from name approval to registration processes, from preparing necessary documents to tax consultancy.

👉 To safely start the process of establishing your company in TRNC, contact us