Northern Cyprus having been off the international map for 30 years has returned to the fore-front of smart investor minds since the UN’s attempt to re-unify the island on May 1st 2004. Despite the fact that re-unification attempts failed, Northern Cyprus hit the press and people started to realise there was a whole different side to Aphrodite’s island.
The southern part of Cyprus is far better known by British holiday makers and investors but is often criticised for having become over commercialized and very expensive.
The North which is the more beautiful of the two regions now poses a real opportunity for investment enthusiasts. It still remains an undiscovered secret, retaining natural beauty and Cypriot character with beautiful sea and mountain views stretching along the coast. Although there is something of a property boom in progress in the North it is still highly undeveloped offering prices approximately 50% lower than their equivalents in the south.
Expected returns can give up to 30% or more in one year from plans to completion in the surrounding Kyrenia district with healthy rental returns should you wish to keep the property for holiday lets during the summer duration. The new up and coming area is East of Kyrenia, Esentepe, Bahceli and Tatlisu where the island’s first golf course is under construction and a large marina at planning stage. All the projects in this area are located close to the sea with the most stunning mountain backdrop and at a fraction of the price of more developed Mediterranean countries.
Property Development Investments
Property is no longer considered an ‘alternative investment’ but a way of reaching excellent returns on initial capital. Northern Cyprus is at the beginning of the growth potential spectrum and therefore can provide excellent returns in a very short period of time.
We have many interesting and original investment opportunities available to our clients. Due to our connections with some of the largest developers and building companies on the island we are constantly kept abreast of the best investment packages and projects available.
Foreign investment is actively encouraged, and those willing to invest in North Cyprus can be sure of a positive Government attitude.
Leasing of land for extended periods at favourable rates.
- Contribution to brochure/advertisement expenditure up to 75%.
- Exemption from income tax and corporation tax for a period of ten years in the case of investment in tourist accommodation units.
- For public companies which have shareholders in excess of 50, tax exemption can be extended.
- Government contribution to charter risk.
- Annual interest and principal instalments of foreign loans enjoy a transfer guarantee.
- Tourism establishments or hotels may deduct each year 20% of their annual foreign exchange gross earnings from taxable income.
- Free transfer of proceeds in case of liquidity of investments.
- Repatriation of profits without restriction or limitations.
- Employment of foreign personnel who are not available locally.
- Transfer of net income earned by foreign personnel is free.
- Exemption of construction license fee.
Also deductible when calculating annual taxable profit are all travel expenses related to promotion and marketing, plus all kinds of advertisement, promotion and marketing expenses.
With reference to the registration of a company, the legal form widely used for business undertakings in the TRNC, both by foreign investors and by local businessmen, is the private limited company. The provisions concerning the limited company are set out in the Company’s Law, Cap 113, which is almost identical with the UK’s Company Act of 1948.
Permission is obtained from the Council of Ministers for foreign ownership of TRNC registered companies, usually within two or three months of application. The foreign ownership can be up to 49%, with the main share holder(s) being of TRNC citizenship owning at least 51%. A business permit is also required, which may be obtained from the Immigration Office – this is dealt with later on this page.
Visas, Permits and Licenses
The TRNC is encouraging a policy of attracting foreigners to come and live and work in N Cyprus – in particular, to invest in businesses, especially within the tourism sector. This, of course, opens up a multitude of trades and businesses, from travel agencies, transport companies (whether land, sea or air), hotels, bars, restaurants, holiday villages, tourist related services such as water sports, recreational land sports such as tennis, golf, horse riding and much more.