The Turkish Republic of Northern Cyprus offers opportunities for new investment in its developing economic structure. The establishment of an institutional structure in the TRNC for the realization of these investments is one of the priorities of both domestic and foreign investors. The sector in which the institutional structure to be established will be located also determines the law under which the company will be established. The basic law to which companies registered in the TRNC are subject is the TRNC Companies Act Chapter 113, which essentially regulates the formation and working conditions, as well as the corporate bodies and their powers and responsibilities.
Companies registered in the TRNC fall into different tax categories depending on their activities. The formation and working principles of companies in the different tax categories are determined by the laws enacted in addition to the TRNC Companies Act.
One of the most important decisions that can be made at the beginning of the investment is the fact that investors who intend to invest in the TRNC and therefore want to create the legal structure in which they will carry out the investment, receive the most accurate and professional information support. In addition to the procedures for establishing the company as a legal entity, the legal nature of this process in other legal
Our company has great experience and knowledge of the TRNC Companies Law and other laws related to the establishment of a company. We have been advising major institutions in the world and in the TRNC with their companies or branches for many years in relation to company law and tax laws. A resident of the country or a person coming to the TRNC from abroad must receive correct and reliable advice, no matter who they are. If this is not done, the additional costs and the possibility of misdirecting the investment will cause great losses, especially for large investments. For this reason, you can always contact our company if you need a first-class service from our experienced and
The persons or institutions wishing to do business in the Turkish Republic of Northern Cyprus (TRNC) may establish and operate companies in their own name on the basis of a real personality or a legal entity. The legal structures of companies are determined according to the laws in force in the TRNC.
There are various laws that regulate the legal structure and working conditions of enterprises in the TRNC. The laws that determine the legal structure and working conditions of enterprises are as follows;
– TRNC Companies Act Chapter 113
– General and Limited Partnership and Commercial LawAct.
– Foreign Capital Act – TRNC Banking Act
– International Banking Units Act – Free Ports and Districts Act
– Lawon International Trading Companies
– Insurance Services (Regulatory Control) Act
The Law on Companies is not only the most important law regulating the legal structure of companies in the TRNC, but also the 113th law regulating the legal structure of companies in the TRNC. In addition to the Law on the Establishment and Working Conditions of Companies to Operate in Certain Sectors, the Banking and Insurance Law regulates the activities of the bank or insurance company under the
In addition to the laws containing sectors, there are also laws that determine the permits and working conditions of companies with special tax benefits, as well as their areas of operation and locations. The Free Port and Free Zone Law and the International Companies Law, which regulate the permits and working conditions of companies in the free zone and companies operating abroad, are also considered related laws.
The businesses that can be established in the TRNC are listed below. 1.companies 2. collective and limited liability companies (partnerships) 3. local limited liability companies 4. TRNC branches of foreign companies 5. free port companies 6. international companies
Companies incorporated under special law within the Local Limited Companies are:
b. International banking units
c. Insurance companies
Basic conditions for the establishment of companies
Companies must abide by the contents of the main statutes of the TRNC Companies Law, even if they will carry out their activities in accordance with other laws.
1- There must be at least 2 (two) shareholders (partners) of the companies.
2- There must be at least 1 (one) director (a board member) of the companies.
3- The secretary defined in the TRNC Companies Law means the person who filed the legal documents of the company.
4- The company must have a registered address in the TRNC.
“The conditions mentioned here are the conditions that the company must meet without being bound by the law or the region in which it is incorporated.
Types of companies
Natural persons (individuals) who wish to operate in the TRNC in any sector (commercial, industrial, agricultural, installation and repair, service) are registered by registering a workplace in their own name. The company is owned by a single person and all responsibilities and obligations related to the activity rest with that person.
General and limited partnership
General partnership describes the partnership by which two or more persons make a profit.
A written partnership agreement may be concluded between the partners on the formation of the general partnership. In cases where there is no partnership agreement, the rights of the partners are determined by applying the articles of the Law on General and Commercial Partnerships and Titles (Partnerships).
In general partnerships, the partners are personally responsible when the activities of the company arise. For this reason, the general partnership is not subject to taxation. The difference between the general partnership and the limited company is that the liability of the shareholders in the limited company is limited and in the limited partnership is limited. The liability of the members (shareholders) in the limited companies is limited by the capital they have paid in.
Unlike general partnerships, there are one or more partners and many non-responsible persons who are liable for the obligations of the company. The non-accountable partners of limited liability companies cannot participate in the management of the company and cannot decide to hold the company accountable. Decision making is the sole responsibility of the partners. Apart from this, the partners share the profits in accordance with the partnership agreement or the rules laid down in the Law on General and Limited Partnerships.
Partners who have no responsibility in corporations cannot participate in the management of the company and cannot make decisions to put the company under responsibility.
Decision making is the sole responsibility of the partners. Apart from this, the partners share the profits in accordance with the partnership agreement or the rules laid down in the Law on General and Limited Partnerships.
Partners who have no responsibility in corporations cannot participate in the management of the company and cannot make decisions to put the company under responsibility. Decision making is the sole responsibility of the partners. In addition, the partners share the profits according to the rules set out in the partnership agreement or the law on general and limited partnerships and the commercial title.
Partners who are not responsible in limited liability companies cannot participate in the management of the company and cannot make the decision to place the company under responsibility. Decision making is the sole responsibility of the partners. In addition, the partners share profits according to the rules set forth in the partnership agreement or the General and Limited Partnerships and Commercial Titles Act.
As with general partnerships, tax liability for limited partnerships rests with the partners.
General and limited partnerships commence their activities by being registered in the TRNC’s Commercial Register.
Local limited liability companies.
Local limited liability company is a company registered under the TRNC Companies Act.
(a) Private companies
(b) It is divided into listed companies.
Number of Shareholders: the number of shareholders in Private Limited Company is not less than (2) two.
The number of shareholders in the publicly traded Limited Company is not less than (7) seven.
Number of Directors: the number of directors in the Private Limited Company is at least (1).
Public Limited The number of directors in the company is not less than (2) two.
Restriction on transfer of shares: The existing shareholders of the Private Limited Company cannot transfer the shares they wish to dispose of to non-shareholders without offering them to the existing shareholders. For this purpose, the regulation for Private Limited Companies must contain an article restricting the transfer of shares.
In the case of the listed Limited Company, the existing shareholders can transfer their shares to persons other than the existing shareholders.
Local limited companies are registered with the TRNC Registrar of Companies.
TRNC branches of foreign companies
The branch of a company with its head office and registered address in a country other than the TRNC may be registered in the TRNC. The branch to be registered in the TRNC is subject to the same conditions as local companies under the Turkish Republic of Northern Cyprus Law on the TRNC, despite its status as a foreign company. A decision of the Council of Ministers of the TRNC is required for the registration of branches of foreign companies in the TRNC. In addition, the capital of the parent company must be at least US $100,000.
Companies operating under the Freeport Law of the Republic of Northern Cyprus register with the Freeport Administration. The principles of incorporation and operation of companies registered in the Freeport Zone are set out in Article 113 of the TRNC Companies Law. Free port enterprises differ from local enterprises in that they are not subject to corporate income tax, personal income tax and value-added tax for the activities carried out by these enterprises abroad or in the free port area. These companies are only responsible for the tax and social security expenses of the personnel they employ. Freeport zone companies lure investors with the tax benefits they offer.
International trading companies (UİŞ) registered under the Law on International Trading Companies in the TRNC and operating under the rules of this law carry out their activities entirely abroad within the limits offered by the law. Apart from this, they are not liable to pay tax on the basis of the activities they carry out.