Company And Corporate Law
The Turkish Republic of Northern Cyprus (TRNC) presents new opportunities for foreign investors in its continuously evolving economic environment, particularly in the real estate market where construction development is a growing industry. The procedure for forming a company in North Cyprus through the TRNC is determined by the type of company you wish to establish. The fundamental law governing the formation of companies in North Cyprus is the Companies Law (Cap 113). This law outlines the processes and regulations for company formation, as well as the authorities and responsibilities of the companies. We provide assistance to individuals who want to establish businesses in North Cyprus. Our services aim to navigate the process efficiently and ensure compliance with all requirements.
If your company’s primary purpose is to acquire and hold immovable property in The Turkish Republic of Northern Cyprus (TRNC), there are specific regulations regarding the composition of shareholders and the board of directors. The following conditions must be met:
1. Majority Shareholding: The majority (at least 51%) of the company’s shares must be registered in the name of a TRNC citizen or a TRNC legal entity. This ensures that the company is predominantly owned by local individuals.
2. Board of Directors: The majority of the board of directors must consist of TRNC citizens. This means that TRNC citizens should hold more director positions than foreign individuals.
By adhering to these conditions and establishing a company structure with majority TRNC ownership and control, you can invest in larger-scale property acquisitions without the need for permission from the Council of Ministers. (Limitations imposed on foreigners, such as the quota of one property (house or flat not exceeding 5 donums or land not exceeding 1 donum)
If you are a foreign national seeking to establish a company in the TRNC with the intention of holding immovable property and you must appoint local citizens to act as trustee shareholders on your behalf, it is crucial to seek legal advice to protect your interests. This can be done through a deed of trust, where the nominees hold the shares and fulfil directorial responsibilities, while you maintain the beneficial ownership and control over the company.
However, if you wish to establish a company to be foreign nationals and/or foreign controlled company – and constitute more than 49% of the Directors and/or Shareholders, there are certain restrictions on property purchase for foreigners, such as the quota of one property (house or flat not exceeding 5 donums or land not exceeding 1 donum and foreign-controlled company must apply for permission to purchase application.
If you wish to open a business as a foreigner in North Cyprus and have no intention of purchasing any immovable property in the name of the company, all shareholders and directors can be of foreign nationality. The process of forming a company is relatively quick in such cases. Please feel free to contact us for a consultation on the requirements and procedures involved.
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What is the process and minimum requirements of setting up company in North Cyprus?
Determine whether you want to establish a local, limited liability company based on your business goals and needs.
Select a unique and suitable name for your company, adhering to the naming regulations of the TRNC and is not already registered by another company.
Identify at least two shareholders, one director, and one secretary for your company.
Arrange for a registered office in the TRNC. This will serve as the official address of your company for legal and communication purposes.
Ensure that your company meets the minimum paid-up share capital requirement. Deposit the amount into a TRNC bank, and obtain a block letter as proof of compliance.
If you have foreign directors, they need to provide a bank guarantee letter from a TRNC bank. This guarantees payment for any potential tax liabilities. The bank guarantee letter should be lodged with the TRNC Inland Revenue to obtain a “Tax Security Certificate.” Foreign Shareholders: If there are any foreign shareholders, a minimum capital must be invested in the company.
You must follow the registration process prescribed by the TRNC authorities, which includes submitting the necessary documentation, forms, and fees to the Registrar of Companies. These documents typically include the company’s memorandum and articles of association, shareholder agreements, and details of directors and secretary, applying for permission if required by the TRNC Authorities.
It’s essential to note that specific regulations and requirements may change over time, so it’s advisable to consult with a local legal professional, company formation service, or the TRNC authorities to ensure you have the most up-to-date information and guidance when setting up an Ltd company as a foreigner in TRNC.