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Form a Trust Company in Northern Cyprus

Today, Northern Cyprus is not just a popular tourist resort but also a favorable destination for business people. Foreign entrepreneurs are attracted by the loyal local policy, low taxes, and broad opportunities. The formation of a trust company in Northern Cyprus is a popular service in TRNC. This type of entity will ensure the protection of trust property to preserve the financial well-being and safety of beneficiaries.

Trust company in North Cyprus

Why Northern Cyprus?

The main share of the GDP generated by the Turkish Republic of Northern Cyprus is connected with the tourist sphere. However, the local government is interested in expanding the spheres that may bring profit to the state. To achieve this goal, a unique business environment has been created here so that foreign investors would choose this country to keep their capital in. Entrepreneurs from abroad can take advantage of a flexible taxation policy, special free economic zones, and the absence of double taxation. 

Let’s look at some more advantages of TRNC:

  • Advantageous geographical location. Northern Cyprus is located between Africa, Asia, and Europe, which considerably simplifies opening international companies here.
  • The possibility to obtain a residence permit. A foreign entrepreneur who decides to start a business in TRNC can benefit from the convenient procedure of acquiring a residence permit.
  • Economic stability. TRNC has been showing stable economic growth in recent years, which inspires confidence of potential investors.
  • Affordable commercial and residential real estate. Foreign entrepreneurs have an opportunity to rent or buy an apartment or an office here.

Northern Cyprus is a popular tourist destination, which creates new opportunities for entrepreneurs in the field of hotel and restaurant business, tourist services, etc.

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What Is a Trust Company?

A trust company is an organization that specializes in property management on behalf of third persons known as beneficiaries.

The main peculiarities include confidentiality and protection of beneficiary interests. Trusts are used to establish structures that ensure anonymity and protection of assets against legal claims.

Here are the main benefits of such organizations:

  • A high level of confidentiality.
  • Asset protection from creditors. The assets in fiduciary management are not considered to be the founder’s property: they belong to the trust as an organization.
  • The possibility of optimizing tax burden by transferring the trust to a jurisdiction with flexible tax laws. 
  • Taking care of inheritance transfer. Trusts are often created to ensure the financial well-being of children or other beneficiaries.
  • Efficient financial planning. You can use the trust to plan your inheritance or pension.

Flexibility is also an important advantage of the trust company. The organization can be easily adapted to the founder’s particular goals.

Consider one more option for business establishment in TRNC: registration of a company with foreign capital in Northern Cyprus.

Trust Company in TRNC

We can help you establish a trust company in Northern Cyprus.

General characteristics:

Organizational and legal formLTD (Limited Liability Company) 
Minimum number of co-owners2 (two), 51% of the company is owned by a citizen of TRNC, while 49% belongs to a foreign citizen
Mandatory positions in the companySecretary and two Directors (a nominee director and an actual director)
Requirements for authorized capital25,000 euros (for some kinds of activity, the minimum authorized capital exceeds the specified amount: currency exchange — 100,000 euros, factoring or financial leasing — 2,000,000 euros). 49% of the authorized capital is blocked in the bank for the period of company establishment (2–4 weeks).
Place of registrationActual legal address

Peculiarities To Be Taken Into Account

The organization can engage in the following kinds of activities:

  • construction
  • education
  • medicine
  • real estate sale
  • currency exchange
  • factoring and other kinds of activity permitted for local companies except for tourism.

If you increase the amount of the authorized capital to 2.5 million euros and engage in investment activities, you can obtain citizenship by investment. The trust has the right to buy commercial and real estate.

Documents you will need to set up a trust company:

  • ID of a citizen of Northern Cyprus and a passport of the foreign founder
  • The foreign citizen will need an apostilled certificate of no conviction
  • Proof of place of residence in TRNC
  • A lease agreement or a utility bill in TRNC
  • A letter from the bank about the blocking of funds to form 49% of the authorized capital.

You will also need a letter of guarantee from the bank in the name of the company’s director.

Articles of Association and General Agreement:

Peculiarities of the Articles of AssociationThe ratio of the founders’ shares: a TRNC citizen owns 51%, while a foreigner owns 49%.

The kinds of activities are recorded at the stage of drafting the Articles of Association.
Peculiarities of the General AgreementMaximum number of directors in the company.

Minimum % of co-owners’ votes to replace the director.

Advantages of a trust company in TRNC:

  • Operation in the domestic market of Northern Cyprus without any limitations
  • Obtaining business visas for owners and work visas for employees
  • The possibility to withdraw and deposit funds from/to the company’s accounts without limitations
  • Access to the products offered by Turkish banks by using their subsidiaries in Northern Cyprus
  • Obtaining permanent residence after 6 years of operation.

You can also become a TRNC citizen after 10 years of work.

Trust Deed

A Trust Deed is a unilateral irrevocable agreement where the nominee owner confirms the right of the real owner (beneficiary) to the trust company.

Peculiarities of the document in TRNC:

  • A foreign founder combines the positions of a beneficiary, secretary, and director
  • A founder represented by a citizen of TRNC is a nominee director and owner
  • The company’s shares are transferred to the beneficiary by the nominee owner under a Trust Deed
  • The foreign director deals with all operational activities by the decision of the Board of Directors
  • The directors shall be liable for the debts of the trust company, payment of taxes, and its financial activities.

The services of a nominee founder will cost 500 pounds sterling a month.

Steps to be made:

  1. Make up a name and check whether it is unique. Following that, obtain a permit to use it.
  2. Stage of drafting constituent documents in accordance with the requirements (Articles of Association and General Agreement).
  3. Receiving letters from the bank.
  4. Submission of the collected package of documents to the authorities that deal with the registration of such enterprises.
  5. Payment of taxes on the authorized capital and state duties.
  6. Obtaining a package of constituent documents.
  7. Recording the organization’s data in the database of the tax service in Northern Cyprus.
  8. Opening corporate accounts in TRNC banks.
  9. Receiving a license to perform the required kind of activity (this option requires a separate fee).
  10. The data about the company is recorded in the municipal register.
  11. The company is registered with the Ministry of Labor, Social Security Organization, and the Pension Fund.

The cost of company establishment is GBP 6.000.

Support for the Trust Company

We can provide support to your trust company on a high professional level. Here are the additional services we offer:

  • Consulting on taxation and licensing.
  • Obtaining business visas for directors and work visas for employees.
  • Accountant’s services.
  • Submission of monthly reports to the tax service.
  • Installation of cash registers.
  • Printing invoices and credit receipt vouchers.
  • Receiving a permit to use the company sign.

All these services come for an additional fee.

Trust Company Expenses:

Monthly expensesAnnual expenses
Accounting services, nominee founderExtension of licenses
Payroll taxes (social security, pension fund)Visas for directors
VAT (from 5 to 20% depending on the kinds of goods and services) Visas for employees
Municipal permission to have an office and a sign
Income tax payment in the amount of 23.5%

How to Set Up a Trust Company in Northern Cyprus

Interested in the establishment of a trust company in TRNC? Please get in touch with our experts for more detailed advice! We will help you register a trust and provide all the required support. The cost of services will depend on whether you need to get a license, hire an accountant, or get any additional services.

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