Establishing an International Business Company (IBC) in Northern Cyprus offers foreign investors various tax advantages and flexible management structures. This type of company engages in international trade, finance, and investment without conducting business in local markets. IBCs are subject to the Income and Corporate Tax Laws and are required to pay an annual operating fee of 5,000 Euros. However, companies operating as International Business Companies enjoy certain exemptions.

Advantages of Establishing an IBC

• 1% Corporate Tax: IBCs are subject to only 1% corporate tax.
• Tax-Free Dividend Distribution: Dividends distributed by IBCs are exempt from tax.
• VAT Exemption: IBCs are exempt from VAT laws.
• Customs Duty Exemption: Motor vehicles, office equipment, and household goods imported for business use are exempt from customs duties.
• Tax-Free Share Transfers: Shareholders do not pay any tax on the transfer of shares.
• Tax-Free Capital Gains: Profits from the sale of securities are not subject to tax.

These advantages make IBCs an attractive option for international investors. However, it is crucial to comply with the legal regulations in Cyprus.