There are different types of business entities which can be established in the TRNC under Companies Law, International Business Company’s Law, Banking Law and Offshore Banking Law.

2.1. SOLE PROPRIETORSHIP

Person who are intending to carry out small scale business operations can register a business name which can be their personal names or any other name. In this type of business, the person who owns the enterprise shoulders the entire responsibility for its management and operation. The share capital is injected by the sole proprietor and all the assets and liabilities belong to him. The sole proprietorship for enterprises are subject to Income Tax not the Corporation Tax. All the activities of the business are considered the be the activities of the proprietor. Therefore the tax liability of the business is the tax liability of the proprietor.
Although there are no restriction on the establishment of sole proprietorship enterprises by foreign nationals, due to personal obligations and liabilities it is not a preferable type of enterprise.

2.2. PARTNERSHIPS

Partnerships can be either general or limited.
In a general partnership every partner is liable jointly and severally with the other partners for all debts and obligations of the firm. In a limited partnership there is at least one general partner with unlimited liability and one or more limited partners who are not liable beyond the amount of capital they have agreed to contribute.

The number of partners cannot exceed twenty. A partner may be general or limited partner in a partnership.

The relations of partners between themselves may be regulated by a partnership agreement. Such an agreement need not be registered.

 2.3. COMPANIES:

A company is a distinct "legal person" created in order to separate legal responsibility for the affairs of a business (or any other activity) from the personal affairs of the individuals who own or operate the business.

The Companies Law of the TRNC, which closely resembles the United Kingdom's Companies Act 1948, provides for private companies, exempt private companies and public companies.

Although the International Business Companies, Local Banking Units and Offshore Banking Units are operating under different Laws, their incorporation and registration procedures are all governed by the Companies Law.

All companies are required to register with the Registrar of Companies.
Different type of Companies can be listed as below:

1. Local Private Companies
2. Local Public Companies
3. Foreign Companies
4. International Business Companies
5. Local Banks
6. Offshore Banks

2. 3(a). - LOCAL PRIVATE COMPANIES

Local Private companies need 2 or more founding members, are limited to 50 shareholders (except for employees or ex-employees), cannot offer shares for public subscription and impose restriction on the transfer of shares. Exempt private companies are subject to the same regulation as other private companies except that they are not required to the file financial statements with the Registrar of Companies. Shares in exempt private companies may not be held by a foreign registered company or a corporate body. Only registered holders of shares can have any interest in the company's securities.

Local Private Companies are subject to Corporation Tax. Corporation Tax is 10% of the Net Profit of the company. Further 15% is charged as Income Tax taking the total tax to 23.50%.

2. 3(b). - LOCAL PUBLIC COMPANIES

Public companies need 7 or more founding members, can seek public subscription of shares and do not restrict share transfers. There is no restriction as to the maximum number of shareholder.

Local Public Companies are subject to Corporation Tax at rates specified above.

A general meeting of shareholders must be held once a year (the annual general meeting), although special meetings of shareholders can be called.

The following information is required for the registration of a company (Private and Public)

1. Name of the company, approved by the Registrar of Companies
2. Memorandum and Articles of Association, in Turkish. The Memorandum describes the scope of the intended corporate activities and the Articles contain the rights of members, the rules governing the internal management of the company, the duties of the directors etc.
3. Names and addresses of subscribers (first shareholders)
4. Address of registered office
5. Names and addresses of the company secretary and directors.

2. 3(c). - FOREIGN COMPANIES

Foreign Companies are the local branches of foreign companies which has the head office and the place of registration in a country outside the TRNC. These companies operate under the same conditions as Local Private and Public Companies and subject to the same rate of taxation. Foreign Companies are registered in the Registrar of Companies by filing the full documents of the head office.