A Cyprus, the third largest island of the Mediterranean, attracts domestic and foreign tourists as well as investors. With the increasing number of hotels, tourist, real estate investments and opened universities in the Turkish Republic of Nothern Cyprus in recent years, the number of those who want to invest in North Cyprus is increasing.
In 2016, 3.188.000 tourists visited North Cyprus which caused the income to increase by 2 billion 360 million Euros. The tourism sector, which has grown even more by investing in airports and hotels, has also increased the employment in this sector and thus the demand for real estate and thus the real estate sector in North Cyprus has been positively affected.
In North Cyprus, the education sector as well as the tourist sector is growing rapidly. By 2017, there are approximately 97.200 students studying at 17 International universities, including the Eastern Mediterranean University and the Near East University. By 2025, the number of students with new universities is estimated to be approximatley 200.000. People are allowed to buy or rent houses in North Cyprus such as students, faculty and administrative staff and others.
Compared to Europe, as well as having very affordable real estate prices, in recent years, the high return on investments attracts the attention of Turkish as Europeans to invest in Northern Cyprus real estate market. Also, those who invest in Northern Cyprus will benefit more by continuing to buld a modern and profitable projects in the areas of Girnem Nocosia, Famagusta and Iskele.
The return of real estate investment in North Cyprus by investors, villa or land purchasers, students and employees due to the demand for real estate, and thus rising rents, can be in excess of 8 – 10 years. Rental income in North Cyprus is in British Sterling (GBP), which means buying a real estate in Northern Cyprus will be more interested to those who want to invest.
Turkish Republic of Northern Cyprus has a typical Mediterranean climate with about 300 days
of sunshine per year. It enjoys dry, warm summers and mild winters. The bulk of the rain falls
during the period from November to March. The coldest month is January having minimum
and maximum mean temperatures of 6 oC and 16 oC respectively. In the hottest month August
the corresponding minimum and maximum mean temperatures are 21oC and 35 oC.
No visa is required for British or EU (European Union) citizens wishing to visit North Cyprus. The only requirement is a valid passport at the time of travel to North Cyprus. If you prefer not to have your passport stamped on arrival, you can ask at passport control for a separate piece of paper, which will be stamped instead.
Ambulance 112, Fire 199, Police 155, Forest Fire 177.
There are no longer any restrictions on border crossings for EU citizens in Cyprus, as of 2003. EU citizens are free to cross and spend as much time as they wish on either side of the border any time of the day (24 hrs). At present, there are seven crossing points where pedestrians can cross at the Ledra Palace and Lokmaci border gates are in Lefkoşa (Nicosia), whilst those who intend to cross by vehicle can use the Metehan (Kermia) border gate in Lefkoşa, Beyarmudu (Pile) near the British Sovereign bases at Dhekelia and the Akyar border gates near Gazimağusa (Famagusta) on the Larnaca-Famagusta road, Bostanci near Guzelyurt and Yesilirmak west of Lefke.
The international dialing code 00 90 392 should precede the seven digit local telephone numbers when calling landlines from abroad. Mobile numbers are simply preceded by 00 90 and then the mobile number with the code, taking off the first zero. Mobile numbers usually start 542, 533 or 548. Public telephone booths are available and telephone cards can be purchased from the Telecommunications Office.
There is a multi-party of democracy in TRNC where human rights, political pluralism and
private property are safeguarded. The head of the state is the President of the Republic who is
elected by universal suffrage for a period of five years. Legislative power is exercised by the
Assembly of the Republic which consists of fifty deputies. The country is managed by a Council
of Ministers led by the Prime Minister who is appointed by the President. Elections are held
freely every five years, based on universal suffrage.
The official currency in TRNC is Turkish Lira (¨TL). Real persons and corporate bodies are
free to keep and save foreign currency, to use foreign currency as a means of foreign exchange
and to express in foreign currency figures appearing on payment orders and contracts.
The official rates of exchange are fixed daily by the Central Bank and announced. Banks,
foreign exchange bureaus and the Central Bank are free to fix different rates of exchange for
the purchase and sale of foreign currency.
There is a developed banking system in TRNC. In addition to the Central Bank and the
Development Bank there are 21 onshore commercial banks and 7 International Banking Unit
(IBU) exist. Banks are free to keep foreign currency, act as intermediary in import and export
transactions, accept foreign currency savings, engage in purchase and sale of foreign
currency, deal in bonds required to be paid in foreign currency, give foreign currency loans,
engage actively in money and foreign currency markets and in compliance with international
banking usage, to deal in every kind of foreign currency transactions.
Encouragement of foreign investment is among the primary objectives of the Turkish Republic
of Northern Cyprus’ development policy. Consequently, those wishing to invest in Turkish
Republic of Northern Cyprus can be sure of a positive Government attitude.
In accordance with its development policy, Northern Cyprus is giving preferential treatment to
export-oriented industries. Due to its small domestic market, the TRNC authorities focus on
export of goods and services. Priority is given to those projects that facilitate transfer of modern technology, know-how, new management techniques into the TRNC and that provide highest value added. However, it should be mentioned that every project proposed by an investor will be considered on its own merits.
Co-operation between local and foreign firms in the form of joint ventures is actively promoted, and Northern Cyprus offers numerous advantages and incentives to the foreign investor including full protection of his property rights. Nationalization has never been part of
government policy nor is it contemplated in the future. The Constitution of TRNC guarantees
the right on private property while it does not discriminate between citizens and aliens.
The fixed capital investments have been 1,814.13 million TL at current prices in 2016. The
public sector financed 12.6% of total fixed investments and the remaining 87.4% was financed
by private sector. Public services with %35.2 and transportation-communication sector with
%30.7 constituted the biggest shares of the public sector investments. On the other hand private
sector investments have been concentrated mostly on dwelling with 45.7% and, business
and private services 17.1%.
Under the Incentive Law, 601 incentive certificates have been granted until the end of the year
2017. The total of fixed investments with incentive certificate amounted
9,620.28 million TL. Tourism sector has the highest share in fixed investments and this sector
occupies 79.06%. Industry and education dorm investments follow it with 8.84% and 7.60%
Investment Incentives Applied Under The Incentive Law
The following incentives are applied to investments with Incentive Certificates, regardless of
whether an investor is local or foreign. Incentive Certificates are granted from the State
• Investment Allowance
Investment allowance is 200% on the initial fixed capital investment expenditure for
the investments to be made in the Development Priority regions determined by the
State Planning Organization in the development plans and / or annual programs.
Investment allowance is 100% on the initial fixed capital investment expenditure for
the investments in other sectors and regions.
Güzelyurt, Lefke, İskele and Geçitkale were determined as Priority Development
Regions by the Council of Ministers.
• Exemption from Custom Duties and Funds
Import of machinery and equipment concerning the project are exempt from every
kind of custom duties and funds in accordance with Incentive Certificate.
• The Rate VAT for the imported and locally purchased machinery and
Zero rate VAT is applied for both the imported and locally purchased machinery and
equipment in accordance with the Incentive Certificate.
• State Owned Land and Building Lease
State owned land and building lease is possible for the investments that are granted
Incentive Certificate in accordance with the regulations in force.
• Exemption from Construction Licence Fee
Investments that are granted Incentive Certificates are exempt from all kinds of taxes
and fees related with construction licence.
• Reduction of Stamp Duty for Capital Increase
Reduction of stamp duty concerning capital increase is provided for the investments
that are granted Incentive Certificate.
• Reduction of Fee on Mortgage Procedures
Reduction of stamp and registration fees is applied on mortgage procedures
necessary when using bank credit for the investments that are granted Incentive
1. Registration of a Company
The legal form widely used for business undertakings in the TRNC both by foreign investors and by the local businessmen, is the private limited company. The provisions concerning the limited companies are set out in the Companies Law, Cap.113.
For the registration of a local company with foreign capital participation the following documents have to be presented to the Official Receiver and Registrar:
• A letter of intent, explaining the objectives of establishment, the area of activity of the company to be established and the registered projected paid-in capital.
• Articles of Association
• M.S. 1, 2, 3 Forms
• Revenue stamp
• Good character certificate obtained from the Investor’s local “Security Office” for directors and/or the shareholders who have no TRNC representative in their country.
• However, good character certificate is not required for directors whom are the citizens of EU, United States, Member States of the Islamic Conference, or the 5 Permanent Members of the United Nations.
• Approved photocopy of passport or identity card.
• Tax-Payment guarantee certificate for directors, obtained from the TRNC local Revenue and Tax Office.
• Certificate of the deposit of the foreign capital share at a local bank.
In case the company is a foreign company or a branch of a foreign company, it is registered under the status of “Foreign (Overseas) Company” and is subject to approval of the Ministry responsible for economic matters and authorization of the Council of Ministers.
For the registration of a branch or a place of business as “Foreign (Overseas) Company”, thefollowing additional documents have to be presented to the Official Receiver and Registrar
• Update list of shareholders.
• Update list of Board of Directors and good character certificate obtained from their local “Security Office” for the board members who have no TRNC representative in their country.
• Update certificate obtained from the foreign company’s local “Chamber of Commerce” indicating whether the company is active.
• Decision of Board of Directors regarding the appointment of one or more real or legal person with the names and addresses who is/are declared as authorized and on duty to accept official notification issued by the TRNC authorities and court notifications in the name of the company and represent in the TRNC. The appointed real or legal person/persons has/have to be resident in the TRNC.
• Decision of Board of Directors indicating the intention of the company concerning the kinds of activities which will be engaged in the TRNC.
• Tax-Payment guarantee certificate for corporate body, obtained from the TRNC local Revenue and Tax Office.
• Y.Ş. 1, 2 and 3 Forms.
Having satisfied the required registration conditions the businessman or company is awarded a certificate of incorporation by the Official Receiver and Registrar and henceforth as a legal person may engage in investment activities in TRNC.
2. Investment Development Agency (YAGA)
Cyprus Turkish Investment Development Agency (YAGA) is established with the aim of to promote investments necessary for economic development of TRNC, contribute in improving the investment climate and determining promotion strategies.
The Agent, provides necessary information and consultancy services to investors, before, during and after the investment in cooperation with the relevant institutions.
YAGA supports the investors in all their dministrative process dealing with bureaucracy such as obtaining licenses and starting a business.
1. Personal Income Tax and Corporation Tax
All companies and other corporate bodies, except cooperative societies, are chargeable with
Corporations which are registered in the state as “Local Companies” are chargeable with 10%
tax on chargeable income.
Corporations which are “Foreign Companies” whether registered in the state or not, are also
chargeable at the rate of 10% on chargeable income only derived from trade or other income in
A corporation is “Locally Registered Company” in the case where the central management and
control of its business is in TRNC. For tax purposes, all profits of such companies, including
profits from other countries are liable to Corporation Tax, but for the avoidance of double
taxation a set off for similar tax paid abroad is allowed. Corporation Tax is paid in two
instalments; May and October of each year.
In addition to the Corporation Tax liability the corporations which are specified under the
Corporations Tax Law have to withhold income tax at source at a standard rate of 15% on the
net chargeable income after corporation tax is deduced. Companies (registered in the state)
engaged in education and health facilities and engaged in industrial activities in the regions
approved by the council of Ministers, withhold income tax according to the Undistributed
Profit/Paid Up Capital ratio (This ratio must not exceed the standard rate).
Foreigners operating in the field of transportation, including corporations, shall not be subject
to withholding tax on taxable income to be ascertained under the provisions of the Corporation
Tax Law and the Income Tax Law.
The net amount of earnings and revenues obtained from all sources within the borders of the
Turkish Republic of Northern Cyprus in a calendar year depends on the Income Tax.
For permanent residents income arising within or outside the TRNC is subject to income tax,
but for the avoidance of double taxation a set off for income tax paid abroad is allowed.
Before income tax is charged, allowances granted to individuals under Income Tax Law are as
• Contributions to Social Security Funds
• Personal Allowance
• Private Allowance
• Wife Allowance
• Child Allowance
• Having more than 3 Children Allowance
• Disability Allowance
Individuals are liable to income tax under a progressive tax system. The personal income tax is
levied at the statutory rates ranging from 10% to 37%.
2 Value Added Tax
Value Added Tax was introduced in 1996 as a Consumption Tax. Five VAT rates are applied
in accordance with VAT rates regulation. Applied VAT rates are: 0%, 5%, 10%, 16% and 20%
The Government of TRNC is keen to encourage foreign capital investment, either in the form
of joint-venture or independently, through capital commitment or introduction of improved
technology in all sectors. The Gazimağusa Free Port and Zone covering an area of 115 acres
offers foreign investors excellent opportunities for transit trade as well as manufacturing
opportunities for middle-east and near-east countries.
The Free Port and Zone Law states that only ‘Approved Enterprises are entitled to operate and
erect concerns in the Free Port and Free Zone Areas’. An “Approved Enterprise” is defined as
one which has received approval from Free Port and Zone Council to function in the Free Port
and Zone Areas. Applications for “Approved Enterprise” status are to be submitted to the Free
Port and Zone Council on forms supplied by this body.
Operations and activities permitted in the Free Port and Zone Areas are as follows:
• Engaging in all kinds of industry, manufacturing and production.
• Storage and export of goods imported to the Free Port and Zone Areas.
• Assembly and repair of goods imported to the Free Port and Zone Areas.
• Building, repair and assembly of all kinds of ships.
• Banking and Insurance services.
• Any other kind of activity approved by the Council of Ministers.
Investors applying to the above activities are charged a fee up to 1000 $, this fee being
changeable according to the activity undertaken.
Incentives provided to businesses established in the Free Port and Zone are as follows:
• All income derived from activities and operations undertaken by investors in the
Free Port and Zone are exempt from Corporate and Income Tax. This exemption
does not apply to the exports of goods and services not manufactured and undertaken
in the Free Port and Zone and that are directed to the TRNC.
• No limit on repatriation of profit and capital
• Exemption from custom duties and indirect taxes.
• Permission to employ foreign expert, engineer and technical personnel.
In addition to the above incentives there is ample supply of skilled and unskilled labour and
wages are reasonable. The Port’s handling charges are much lower than the other neighbouring
ports. The port, which is geographically well located, offers sufficient covered storage area,
experienced stevedoring and good security. A sound and receptive civil service, coupled with
minimum of formalities, provides investors and dealers with a favourable working climate. All
types of port machineries (fork-lifts, cranes etc) are available.
BUSINESS COMPANY AND MAIN INCENTIVES
The establishment of an International Business Company in TRNC is subject to the approval of Ministry responsible for economic matters.
Foreign real person, foreign corporate bodies and non-residents may apply to the Ministry responsible for economic matters for the purpose of carrying on International Business Company operations.
• The minimum paid-up capital required of International Business Company is €20.000.
• Charge payable on application is €500. This application fee is never returned to the
applicant under any circumstances. This amount can be increased or decreased 50% by the Council of Ministers.
• The Ministry evaluates applications and if deemed suitable gives a provisional licence within 15 days at the latest.
• Having received the provisional licence, the applicant has to complete the registration procedure at the Official Receiver and Registrar within a period of two months. Otherwise the provisional licence shall be deemed invalid.
• An International Business Company, within one month at the latest after completion of the registration procedure, has to submit a main contract, regulation, opening balance sheet and one set approval document to the Ministry responsible for economic matters in order to receive an operation licence. That application is concluded within 15 days at the latest.
• An International Business Company, within two months at the latest after receipt of the operation licence from the Ministry, has to specify its place of business, must commence business according to its main contract, otherwise the operation licence shall be deemed invalid.
• International Business Companies shall perform all activities aimed at overseas (Off-Shore) and derive income from activities abroad.
• International Business Companies cannot provide financial resources from banks, credit companies and real person or corporate bodies in TRNC.
• This kind of companies run their activities without being dependent to Income Tax Law, Money and Foreign Exchange Law and Corporation Tax.
• The year after the registration of the company was first founded, the companies applied for operation to the ministry, must paid annually with pro-rata method 5000 Euros to the tax office cash desk for Activity Permit Fee.
• International Business Companies shall be subject to tax at a rate of 1% on taxable income to be ascertained under the provisions of the Corporation Tax Law and
Income Tax Law. This Tax should be paid within five months at latest to the Income and Tax Office after each accounting period.
• International Business Companies must carry on their activities and accounting enrolments according to Turkish Lira and/or convertible exchange units.
• International Business Companies may transfer abroad, earnings and resources they have gained and transferred from abroad freely.
New Year`s Day (1 January), Children`s & Sovereignty Day (23 April), Labour Day (1 May), Youth and Sports Day (19 May), Peace and Freedom Day (20 July), Victory Day (30 August), Turkish Republic Day (29 October), North Cyprus Republic Day (15 November). The dates of religious festivals vary from year to year.
The official language is Turkish, but English is also widely spoken as a second language.
GMT + 3
Driving is on the left and traffic and road signs are international. Maximum speed is 100 km/hr. Vehicles entering North Cyprus must be insured upon arrival. Seat-belts must be worn at all times. Drinking and driving is illegal, as is using a mobile phone whilst driving.