The Famagusta Free Zone in the TRNC offers a compelling proposition for businesses seeking to leverage tax incentives, strategic location, and modern infrastructure. While there are challenges related to the political status of the TRNC, the FFZ remains a viable option for companies aiming to expand their operations in the Eastern Mediterranean and beyond.

For more detailed information, it is advisable to consult with local authorities or legal experts familiar with the TRNC's business environment.

Famagusta Free Zone: Company Registration Benefits

The Famagusta Free Zone offers substantial advantages for businesses seeking to establish a presence in Northern Cyprus. Companies registered in this zone enjoy complete exemption from corporate tax, with a profit tax rate of 0%, as well as exemptions from customs duties and Value Added Tax (VAT). These tax benefits create an attractive environment for international businesses looking to optimize their financial operations.

Financial operations for Free Zone companies are streamlined, with smooth transaction processes for both deposits and withdrawals in corporate accounts. These companies have access to banking services from both local banks (UBAN) and Turkish bank branches that provide SWIFT and IBAN services, facilitating international transactions. Additionally, the Free Zone offers unhindered access to global markets, allowing companies to expand their operations internationally without significant barriers.

Further enhancing the attractiveness of the Free Zone, companies benefit from additional tax advantages, including no tax on dividends and the freedom to distribute profits internationally. Companies can also obtain a postal box or legal address for correspondence, providing a formal business presence in the region.

To establish a Free Zone Company, specific documentation is required. Non-EU and non-Turkish citizens must submit a Certificate of No Criminal Record. All shareholders, directors, and the company secretary must provide copies of identification documents such as ID cards or passports. Proof of residency within the Turkish Republic of Northern Cyprus (TRNC) is also necessary. Financial documentation includes a bank confirmation letter verifying the reservation of funds for the company's share capital. The company director must additionally provide a bank guarantee letter specifying an amount equal to ten times the Minimum Monthly Wage (MMW), which must remain valid for 24 months.

The Articles of Association for Free Zone companies are created under TRNC Companies Law and must adhere to specific stipulations. Founders' shares must be allocated within a range from 10% to 90%. The Articles must explicitly list all proposed business operations and specify that the company is authorized to operate in the global market. Any amendments to the Articles of Association require judicial approval, ensuring regulatory compliance.

Property acquisition in the Free Zone follows specific requirements. For a Free Zone Company to purchase or lease property in the zone, it must have a resident member who is a TRNC citizen and owns at least 51% of the company shares. The company's Master Agreement must clearly define the maximum number of directors allowed and stipulate the minimum vote percentage required from shareholders to change the directorship.

The company formation process involves several stages. It begins with verifying the availability of the company name and securing necessary approval. Next, foundational corporate documents, including the Articles of Association and Master Agreement, must be drafted. The company must obtain reference letters from banks and submit a complete set of documents to the TRNC's registration authorities. After paying the required fees, the company can collect the official incorporation documents.

Additional registration steps include registering the company with the TRNC's tax authority, opening a corporate bank account, securing necessary business permits or licenses, registering with the local municipal authority, and complying with social requirements by registering with the Pension Fund and Ministry of Labor.

Currently, the fee to establish a Free Zone Company stands at 33,000 EUR. This investment provides access to the significant tax benefits and operational advantages that make the Famagusta Free Zone an attractive option for international business operations.