Government has been actively promoting the development of North Cyprus as a base for the persons and companies operating in foreign countries. For this purpose, the Offshore Companies Act was repealed and International Companies Act was introduced by the Government. Many incentives have been provided to international companies operating in North Cyprus. These are;
•International Business Companies pay 1% Corporation Tax on their net profit after deducting depreciation and expenditures.
•There is neither income tax nor VAT for income earned on royalty fee, interest and any other services provided internationally.
•International Business Companies are allowed to transfer abroad interest and profits earned on foreign operations.
•International Business entities and their expatriate personnel are exempted form exchange control restrictions in their dealings with non residents and are permitted to maintain freely transferable bank accounts in any currency in North Cyprus and abroad.
•Dividends paid by International Business Companies are not subject to withholding or other taxes. There are no withholding or other taxes on interest paid by international business companies, royalty fee earned and interest earned on foreign funds deposited with a local bank.
•International Business entities are exempt from tax on capital gains arising on disposal of assets outside North Cyprus. Furthermore, shares held in an offshore company are exempt from estate duty.
•The anonymity of the beneficial owners of international business entities is assured and any information disclosed to the Ministry of Economy, including the names of beneficial owners and financial or other information about the Company and its owners, remains strictly confidential.
•International Business entities which have established an office in North Cyprus and their expatriate personnel living in Cyprus may import or purchase locally office and household equipment, cars and yacht free from customs duties. Furniture and air conditions are excluded from the concessions.
Taxes and Duties:
•The authorised paid up share capital of InternationalBusiness Companies (IBC) cannot be less than 20.000 €
•On the application of IBC 500€ application charge is paid and it is not refundable
•Under the Act governing IBC the companies which will operate in the Northern part of Cyprus by establishment of head office or not is subject to pay 5000 € business operation fee to the government. (This amount is due to be paid by the latest in one month following incorporation and consecutive payments will be paid until the end of January of each calendar year on pro-rata basis.)
Appointment of Authorised Representative
International Business Companies are required to appoint authorised representative by letter of attorney who might be a Certified Public Account or a lawyer who is the member of Attorney General in the Northern part of Cyprus. The representative is responsible to receive all notices and return all documentations related to the Company. The information regarding name-surname, address and identification number of representative must be disclosed in the letter of attorney.
In case of non-appointment of authorised representative, at least one Turkish Cypriot company director must be appointed.
For more information please contact us.
Company Incorporation Conditions for International Business Companies
International Business Companies are incorporated in the Northern part of Cyprus and they have tax advantage related with their operations. The tax advantage arises since the operations are undertaken abroad. The shareholders of International Business Companies must be foreign nationals. The company is exempt from all tax and duties. International Business Companies pay 1% Corporation Tax on their net profit.