Free Trade Zone Companies (FZC) - also known as free trade zones (FTZ) - are essentially economic areas where goods and services can be traded at preferential tax and customs rates. FTZ hold a special status under the law and on top of having tax advantages, FTZ offer benefits such as 100% foreign Company ownership. They were originally implemented to boost international business.
FTZ in the TRNC - namely the Famagusta Port - represents a customs institution that has encouraged external trade and transit trade development by offering certain incentives for the storage and distribution of goods. Such financial incentives have made North Cyprus a hub for foreign investors and businesses. The Famagusta Port sits near the Republic of Turkey, Europe and the Middle-East providing for easy and faster exportation of goods. The principles of registration of FZC are subject to the Companies Law Cap 113 as well as under the Free Trade Port Law 26-1983. Companies operating in the TRNC Free Zone are registered with the Free Zone Administration. The main difference between Local Limited Liability Companies and FZC is that FZC are not subject to corporation tax and value added tax (VAT). Why set up a Free Trade Zone Company? The huge popularity of the FTZ is predominantly down to the tax advantages it offers to business owners. There is no time limitation for stocking goods and there is an inflation protection, with every payment being made with convertible currencies. Ready infrastructure at the Famagusta Free Port & Zone offers modern and ready infrastructure, facilitating business operations. FTZ have an easy and straightforward setting up process in comparison to other Company types.
Due to the rise of international investors establishing a FTC in the TRNC, the Turkish Cypriot Free Zone began allowing Companies to operate without a physical place at the port – through a mailbox - as well as being able to operate in offices and/or warehouse/factories located in the Free Port Area. Currently, more than 500 Companies are operating in the North Cyprus FTZ. Businesses such as Manufacturing, Banking and Financial services, Insurance, Storage & Export of Goods, Assembly & Repair of Goods, Transit trade and Service Companies (plus any other type of activity approved by the TRNC Council of Ministers) may provide services under a FZC. Those wishing to establish a FZC in North Cyprus contact our office should you require any further details.
This article is intended for general information purposes only and does not constitute legal or professional advice. BHLEX Law and Consultancy Bureau does not accept liability for any loss which a person may incur as a result of relying on or otherwise using this information.