North Cyprus – Limited Company - DISTINCTIVE FEATURES
As Cyprus was a British Colony, then company law is based on the UK Companies Act of 1948. Comapny law in the UK is currently governed by the Companies Act of 2006, but this does not, of course, apply to North Cyprus (TRNC - Turkish Republic of North Cyprus).
The distictive features of North Cyprus limited companies are as follows -
1. There must be at least one Director and a Company Secretary. There must be at least two Shareholders.
2. The process of forming a limited company has not been streamlined, as in the UK. The choice of a company name can be protracted as the TRNC Companies House will often object to what appears to be inocuous names, and the Directors need to supply police check documents from their customary country of abode.
3. While the process of forming a company is underway, the principals of the company need to lodge funds in North Cyprus. The amount of funds varies depending on what sector the company intends to operate in. For example, general trading as opposed to construction or property development. More importantly, if the company is deemed to be foreign owned, then a temporary deposit of 100,000 USD is normally required. This does not need to be paid into the bank account of the company. Prior to the conclusion of the company formation process, it should be held in the name of one or more of the Principals of the company. Once the company has been formed, the Principals can transfer the funds out of the TRNC.
4. There is a strict distinction between a Local Company and a Foreign Owned Company. The difference relates to the fact that a Local Company will have at least one or a majority of TRNC Citizens as Directors and that the majority shareholding of at least 51% must be held by TRNC citizens.
5. Any company that operates in the TRNC and wishes to own land assets in excess of one donum MUST BE a Local Company. While a trading company may be foreign owned, it will face tedious restrictions on the importation of goods from Turkey and elsewhere and the bureaucratic requirements will be greater than those imposed on a Local Company.
For this reason, overseas businessmen and women will wish to form a Local Limited Company. This poses the problem of finding a suitable TRNC to act as a Nominee Shareholder and Shadow Director. Follow this link to find a suitable TRNC Company Director and Shareholder..
There are several pages of information on this topic -
North Cyprus Company
North Cyprus Limited Company - Distinctive Features
TRNC Company - Nominee
Copyright - Leslie Hardy, 21 June 2013