THE ESTABLISHMENT OF AN OFFSHORE BANK

Foreign real persons and corporate bodies may apply to the
Ministry responsible for economic matters
for the purpose of carrying on offshore banking operations.
• Real persons or corporate bodies intending to establish an
offshore bank shall be; nonresidents, residents of or carrying on business
in Turkey, OECD Countries or countries having diplomatic relationship with
TRNC and holding the control of a bank directly (at least 51% of the
shares) or indirectly. Corporate bodies shall have a valid business permission
obtained from the authorities of banking operations in these countries.
• Documents to be submitted on application and establishment and the contents
thereof shall be specified in regulations to be issued by the Council of
Ministers.
• Charge payable on application is US$ 1,000, which has to be deposited at the
Central Bank.
• The Ministry responsible for economic matters evaluates applications and if
deemed suitable gives a provisional licence within 10 working days after
receiving the views of the Central Bank.
• Minimum cash paid-up capital required of offshore bank is US$ 500,000.Upon
payment of the cash capital into a blocked account at the Central Bank the
provisional licence is rendered absolute.
• Offshore banks which have been issued with a provisional licence are caused
to be registered with the Official Receiver and Registrar after completion
of requirements provided for the
Companies Law.
• Having received the provisional licence and completed the registration
procedures, an offshore bank must deposit US$ 20,000 to the Revenue and
Tax Office as licence fee. This amount of licence fee has to be deposited
every year in January. Otherwise the banking licence shall be deemed
invalid.
• An offshore banking unit must, within three months at the
latest after receipt of the provisional licence, specify its place of
business and be fully staffed. In addition the unit has to submit
an approval certificate obtained from the Official Receive and Registrar,
the opening balance sheet approved by an authorized auditor and the
certificate of deposit of licence fee to the Ministry responsible for
economic matters in order to obtain a business licence.
• Offshore banks shall perform all banking operations with non-residents.
• Offshore banks have to submit the personnel list to the Ministry responsible
for economic matters after beginning business. At least one of the General
Director or Assistant General Directors and minimum half of the personnel
has to be resident and national of TRNC.
• Offshore banks shall perform their international banking and other financial
dealings freely and independent of the taxation and financial provisions
in force in the TRNC.
• Offshore banks may transfer abroad earnings and resources they have secured
freely.
• Offshore banks shall be subject to tax at a rate of 2% on taxable income to
be ascertained under the provisions of the Corporation Tax Law and Income
Tax Law.