Setting Up a Company in North Cyprus: Steps, Capital and Taxes (2026)

The most common way to set up a company in North Cyprus (TRNC) is to register a private limited company under the Companies Law (Cap. 113) with the Official Receiver and Registrar's Office (Resmi Kabz Memurluğu ve Mukayyitlik Dairesi, the companies registry) in Nicosia. Companies with foreign shareholders need the approval of the Ministry of Economy and Energy, and as of November 2026 the minimum capital applied is the TL equivalent of €25,000. Corporation tax is 10%; together with the 15% income tax applied to the remaining profit, the effective tax burden reaches approximately 23.5%.

Note: Capital requirements, fees and sector restrictions change often, and figures in older guides may be out of date. Before setting up a company, confirm the current rules with a lawyer, an accountant or Dornika.

What types of company can be set up in North Cyprus?

Private limited company

Most entrepreneurs who want to trade in the local market, provide services or run real estate choose a private limited company. Companies are registered under Cap. 113 with the Official Receiver and Registrar's Office in Nicosia. A private limited company can usually have a maximum of 50 shareholders; the company must have at least one director, a secretary and a registered address in North Cyprus. Clarify the minimum number of shareholders and the structural requirements specific to your company with your lawyer.

Branch of a foreign company

A company incorporated abroad can also be registered in North Cyprus as a branch. According to the fee schedule dated 16 February 2026, the registration fee for a foreign company is 7,500 TL. The branch operates as an extension of the parent company; for this reason, preparing the parent company's documents and, where necessary, translating them can lengthen the process.

International business companies and free zone companies

International business companies, formerly known as "offshore" companies, and free zone companies are licensed by the Ministry of Economy and generally cannot trade in the local market. The capital, tax and licensing rules for these company types change often; if you are considering this route, start with a lawyer's opinion that clarifies the current rules.

Can foreigners set up a company in North Cyprus?

Yes, foreigners can set up a company in North Cyprus or become a shareholder in an existing company. However, there are additional requirements for companies with foreign shareholders:

• Ministry approval: Companies with foreign shareholders require the approval of the Ministry of Economy and Energy.
• Minimum capital: According to the Registrar's practice of November 2024, the minimum capital is €25,000, paid as its TL equivalent. You may come across different figures in older guides, such as €50,000 or $100,000; always confirm the current amount before applying.
• Blocked capital: The capital is held blocked in a bank until registration is complete.
• Turkish citizens: For company formation, citizens of the Republic of Turkey also count as foreign shareholders.
• Sector restrictions: In some sectors, 51% of the company must be owned by TRNC shareholders.

So when drawing up your business plan, the first task is to check whether your field of activity is open to foreign ownership, and to what extent. This check saves you from having to rebuild the structure from scratch later on.

Setting up a company in North Cyprus step by step

The formation of a local limited company generally proceeds in the following order. If there is a foreign shareholder, Ministry approval and blocked capital are added to these steps.

1. Name check: The availability of your chosen company name is checked at the Registrar's Office. The fee for this is 120 TL.
2. Memorandum and articles of association: The company's memorandum and articles are drawn up by a lawyer. Shareholdings, directors' powers and the capital structure are set out in these documents.
3. Capital duty: The duty calculated on the capital is paid to the tax office.
4. Incorporation forms: Forms M.Ş.1, M.Ş.2 and M.Ş.3 are submitted to the Registrar's Office and the company is registered.
5. Tax and VAT registration: The company is registered with the Inland Revenue Department.
6. Bank account: A bank account is opened in the company's name.
7. Social Insurance registration: The company is registered with Social Insurance.
8. Trade licence: A business trade licence is obtained from the municipality where the company will operate.

How long the steps take depends on name approval, ministry permission and whether your documents are ready. Preparing certified translations of documents from abroad in advance speeds up the process.

Checklist before you start

• Is your field of activity open to foreign ownership, and is there a 51% TRNC shareholder requirement?
• Have you built the minimum capital and the blocked period until registration into your cash flow plan?
• Will the company have a registered address in North Cyprus?
• Is it clear who will take on the roles of director and secretary?
• Are translations of passports, addresses and parent company documents ready?
• Have you chosen an accountant to handle bookkeeping and tax returns after formation?
• If you or foreign employees will work in the company, have you planned the timing of the work permit application?

If the answers to these questions are clear, your first meeting with your lawyer will be far more productive and delays caused by missing documents during formation will be reduced.

What taxes do companies pay in North Cyprus?

Corporation tax and income tax

In North Cyprus, 10% corporation tax is levied on company profits under Corporation Tax Law No. 41/1976. A further 15% income tax is applied to the remaining profit, which brings the effective tax burden to approximately 23.5%.

A simple example: if your company makes a pre-tax profit of 100,000 TL in the year, 10,000 TL corporation tax is paid first. The 15% income tax on the remaining 90,000 TL comes to 13,500 TL. Total tax is 23,500 TL, i.e. approximately 23.5% of the profit.

VAT

The standard VAT rate is 16%. The VAT registration threshold, sector-specific rates and exemptions vary according to the company's activity; check them with your accountant or through the Inland Revenue Department.

Other obligations

If you have employees, social insurance obligations arise. Lease agreements for offices or business premises rented in the company's name are also subject to stamp duty of 0.5% of the total contract value within 1 month of signing. Working with a local accountant to keep the bookkeeping and tax return schedule on track makes life easier, especially for foreign entrepreneurs.

After setting up the company: bank, work permit and office

• Bank account: A company account is needed both for the blocked capital and for day-to-day transactions. For documents and choice of currency, see our guide to opening a bank account in North Cyprus.
• Work and residence permit: If you or foreign employees will work in the company, a work permit is required. The application is made by the employer, i.e. the company; the company covers all costs and these cannot be deducted from salaries. For residence permit options, read our North Cyprus residence permit guide.
• Office or business premises: Since a registered address is mandatory, plan a suitable address before setting up the company. You can explore office and business premises options in our rental listings.

Does buying property through a company change the rules for foreign buyers?

A frequently asked question is whether setting up a company makes it possible to get around the property acquisition limits for foreigners. We advise you not to rely on this. Companies with foreign shareholders may also be treated as foreign for property acquisition, and under the 2026 rules, a separate apostilled criminal record certificate is required for each shareholder of the company in the purchase permit application.

Under Decree No. 89/2026 of August 2026 there is also a separate investment route: an investment of at least €10 million in tourism, education, healthcare, industry, agriculture, technology or R&D. This amount must be deposited with a TRNC bank in the company's name and spent within 2 years; build-and-sell housing projects do not qualify. Since decrees must be approved by Parliament and these rules changed several times in 2026, confirm the current position with a lawyer before proceeding. For details of property acquisition, see our guide to buying property in North Cyprus as a foreigner, and for investment structuring, our investment consultancy service.

How Dornika can help

Dornika plans the formation process with you, from choosing the company type and checking the name to coordinating the lawyer and accountant and handling the bank account and work permit steps. For details, see our company formation consultancy page or get in touch with us.

Frequently asked questions

Can foreigners set up a company in North Cyprus?

Yes. Companies with foreign shareholders require the approval of the Ministry of Economy and Energy, and in some sectors 51% of the company must be owned by TRNC shareholders.

How much capital do you need to set up a company in North Cyprus?

According to the Registrar's practice of November 2024, the minimum capital for companies with foreign shareholders is the TL equivalent of €25,000, held blocked in a bank until registration. As you may come across different figures, confirm the current amount before applying.

What is the corporation tax rate in North Cyprus?

Corporation tax is 10%. Because 15% income tax is levied on the remaining profit, the effective tax burden is approximately 23.5%.

Are Turkish citizens treated as foreigners when setting up a company in North Cyprus?

Yes. For company formation, citizens of the Republic of Turkey are also treated as foreign shareholders and are subject to the same approval and capital requirements.

Can you set up an offshore company in North Cyprus?

International business companies, formerly known as offshore companies, and free zone companies can be set up with a Ministry of Economy licence, but they generally cannot trade in the local market. Get a lawyer's opinion on the current capital and tax rules.

How much does it cost to set up a company in North Cyprus?

Some of the official fees are fixed; for example, the name check is 120 TL and registering a foreign company branch is 7,500 TL. Capital duty and lawyer and accountant fees, however, vary according to the capital and company structure.