Frequently Asked Questions

1. What are the necessary procedures for investments?

Each investment requires various licences depending on its general and specific nature.

2. Who can be a foreign investor?

A foreign investor can be either a legal entity or an individual. In both cases, investors have equal rights. The term “foreign investor” refers to a company established in the TRNC by a foreign individual and/or foreign legal entity. Foreign investment can be in the form of money, securities, properties, services, and property rights.

Foreign Companies are local branches of foreign companies whose registration and headquarters are outside the TRNC. These companies operate under the same conditions as Local Private and Public Companies and are taxed equally. Foreign Companies register with the Registrar of Companies by completing all documents of the headquarters. Prior approval from the Council of Ministers is mandatory.

Foreign individuals also have the option to establish sole proprietorships, provided there is no public partnership. Foreign investors can form joint ventures with one or more foreign or local investors. If foreign investors wish to operate in the construction and/or tourism agency sectors, they must meet certain conditions. In such cases, 51% of the company’s shares must be held by TRNC citizens.

3. What is the required amount for investment?

There are no restrictions on investments unless stated as a “maximum required investment level” in the investment agreement or legal action.

4. Can foreign investors acquire property rights in the TRNC?

After acquiring property rights in the TRNC and obtaining approval from the Council of Ministers, foreign individuals can own land not exceeding 1 dönüm (14,400 square feet) and real estate not exceeding a total of 5 dönüm (for personal use). The same conditions apply for leasing.

With the approval of the Council of Ministers, foreign individuals and enterprises can purchase property without any dönüm limitations for direct investment purposes.

If private property is to be leased or purchased for investment purposes for a long-term period, the foreign investor must deposit at least 3 million Euros in their or their company’s name in any bank operating in the TRNC and use this amount for investment purposes.

5. How can the right to use public/state land be obtained?

When it comes to state land, the Minister is authorized for leases up to 10 years. For lease periods between 11 to 50 years, the approval of the Council of Ministers is required, and for lease periods exceeding 50 years (up to 99 years), the approval of the TRNC Parliament is necessary. Any individual or entity can apply to YAGA with the application and accompanying documents or directly to the relevant Department/Ministry (e.g., State Property and Material Department, Ministry of Interior, Industrial Department).

6. What is the fee for the right to use public/state land?

The right to use public/state land has the following characteristics:

• It depends on the ownership of the building constructed;
• It is granted for a specific period;
• It is non-transferable, but it automatically transfers with the sale of the constructed building. The fee is determined by the “State Properties Lease and Valuation Commission.” The fees are generally quite competitive and can be classified as another form of incentive given to investors. The allocation of land in the Organized Industrial Zone is realized after the completion of the approval procedure by the Ministry in accordance with the regulation prepared by the Industrial Department.

7. What are the rental rates in the TRNC?

The average annual rental rates per square meter, depending on various factors, are:

• Residential Rents: 24 STG – 60 STG
• Office Space Rents: 48 STG – 96 STG
• Industrial Space Rents: 24 STG – 48 STG

8. How to obtain construction approval?

Depending on the region of the investment, an application is made to the relevant District Office or Municipality. Before applying for construction approval, previous planning permission and approval, if applicable, must be obtained from the Town Planning Department and the Chamber of Architects and Engineers Visa Office. The required documents are:

• Project approved by the Chamber of Architects and Engineers,
• Title deed,
• Property tax receipt.

9. Under what conditions can a foreign investor make a free transfer of goods from the TRNC?

There are no restrictions on making a free transfer of goods from the TRNC.

10. Are foreign companies taxed differently from local investors?

Both local and foreign companies operate under the same conditions and are subject to the same tax rates.

11. Is a foreign investor required to insure their investment?

A foreign investor is not required to insure their investment.

12. What are the rights and obligations of a foreign investor?

A foreign investor has the right to establish their rights with their investment to participate in the operation and/or management of the company (if provided by contract or establishment law). A foreign investor has the right to share in profits, including transfer and reinvestment profits. A foreign investor can benefit from all rights guaranteed by the local legal framework.

13. Can the assets of a foreign investor be expropriated?

The law does not allow the expropriation of a foreign investor’s assets unless it is proven to be in the maximum public interest. In such a case, the investor is compensated with a settlement fee or compensation that is not less than the market value of the expropriated assets.

14. Does a foreign investor have the right to claim compensation?

The law does not allow the expropriation of a foreign investor’s assets unless it is proven to be in the maximum public interest. In such a case, the investor is compensated with a settlement fee or compensation that is not less than the market value of the expropriated assets.

15. From which countries do foreign investors come to the TRNC?

Foreign investors come from various countries around the world. However, they predominantly come from Turkey, the United Kingdom, Israel, and Russia.

16. Which institution is responsible for business registration?

The Official Receivers and Registrar Office is responsible for business registration.

17. What types of companies can be established under TRNC laws?

A company is a separate “legal entity” created to distinguish the legal liability of a business (or any other activity) from the personal affairs of the owners or operators. The TRNC Companies Law, which is very similar to the 1948 United Kingdom Companies Act, provides information on private companies, exempt private companies, and public companies. The types of companies allowed under TRNC law include Local Private Companies, Local Public Companies, Foreign Companies, International Business Companies, Local Banks, and International Banking Units. (Although International Business Companies, Local Banking Units, and International Banking Units (IBU) operate under different laws, all incorporation and registration procedures are subject to the Companies Law.)

Local Private Companies: 

Local Private Companies require 2 or more founding members, are limited to 50 shareholders (excluding employees or former employees), cannot offer shares for public subscription, and cannot restrict share transfers. Only registered shareholders can have any interest in the company’s securities. Local Private Companies are subject to Corporate Tax. Corporate Tax is 10% of the company’s Net Profit. Additionally, a 15% withholding tax is applied, making the total tax rate 23.50%.

19. What is the registration procedure for a Foreign (Overseas) Company?

For the establishment of a “Foreign (Overseas) Company,” the approval of the Ministry responsible for economic affairs and the permission of the Council of Ministers are required. To register a branch or place of business as a “Foreign (Overseas) Company,”

• Updated list of shareholders
• Updated for board members who do not have TRNC representative in their country
• List of the Board of Directors and a certificate of good character from the local ‘Security Office’
• Updated certificate from the local ‘Chamber of Commerce’ of the foreign company showing whether the company is active or not.
• Resolution of the Board of Directors regarding the appointment of one or more real or legal person(s) with the names and addresses declared to be authorised and authorised to accept official notifications made by the TRNC authorities and court notifications made on behalf of the company. The appointed real or legal person(s) must reside in the TRNC.
• Resolution of the Board of Directors stating the company’s intention regarding the types of activities to be carried out in TRNC.
• Tax Payment guarantee certificate for legal entity obtained from TRNC local Revenue and Tax Office.
• Y.Ş. 1, 2 and 3 Forms.

The registration fee for a foreign company is approximately Lira 1,250. A Company Registration Certificate/Company Incorporation Permit Certificate is issued by the Official Receiver and Registrar’s Office to the businessperson or company that meets the necessary registration requirements and can then carry out investment activities in the TRNC as a legal entity.

For detailed information, please contact the Office of the Official Receiver and Reckonayitlik. Website: http://rkmmd.gov.ct.tr/ 

20. What is the registration procedure for an International Business Company?

The establishment of an International Business Company in the TRNC shall be submitted to the approval of the Ministry responsible for economic affairs. Foreign natural persons, foreign legal entities and non-residents of the TRNC may apply to the Ministry in charge of economic affairs to carry out the activities of an International Business Company.

• The minimum paid-up capital required for the establishment of the International Business Company is €20,000.
• The fee payable at the time of application is €500. Under no circumstances will this application fee be refunded to the applicant.
• The applicant who receives the provisional business establishment licence must complete the registration procedure before the Office of the Official Receiver and Registrar within a period of two months. Otherwise, the provisional licence shall be deemed invalid.
• No later than one month after the completion of the registration procedure, an International Business Company must submit to the Ministry in charge of economic affairs articles of association, by-laws, an opening balance sheet and a set of approvals in order to obtain a business licence. This application shall be finalised within 15 days at the latest.
• An International Operating Company must specify its business address within two months at the latest after receiving the operating licence from the Ministry, and must start its activities according to the information contained in the company statute, otherwise the operating licence will be deemed invalid. International Operating Companies shall carry out all activities abroad and generate income from the activities abroad.
• International Business Companies cannot obtain financing from banks, credit companies and natural persons or legal entities in the TRNC. Such companies are not subject to the Income Tax Law, the Monetary and Foreign Exchange Law and the Corporate Tax. 
• International Business Companies will be subject to tax at a rate of 2.5% on taxable income to be determined in accordance with the provisions of the Corporate Tax Law and the Income Tax Law. This tax must be paid to the Revenue and Taxation Office no later than five months after each accounting period.
• International Business Companies are obliged to maintain their activities and accounting records in Turkish Lira and/or convertible foreign currencies. Uluslararası İşletme Şirketleri, yurt dışından kazandıkları ve aktardıkları kazanç ve kaynakları yurt dışına serbestçe transfer edebilirler. 
• International Business Companies must employ at least one TRNC national staff. If International Business Companies employ more than one staff, the number of foreign staff should not exceed three times the number of TRNC nationals residing in TRNC.
• International Business Companies have to pay a business fee of €5000 on a pro-rata basis to carry on business with or without opening an office.

For detailed information, please contact the Office of the Official Receiver and Reckonayitlik. Website: http://rkmmd.gov.ct.tr/

21. What are the most exported and imported goods of the TRNC?

Turunçgiller, Hellim gibi süt ürünleri, Sebzeler (Enginar ve Patates, Buğday gibi), Yumurta, Atık Kağıt, Sigara, Tavuk Eti başlıca ihraç edilen ürünlerden bazılarıdır. Yeşil Hat Ticaret Anlaşması kapsamında Güney Kıbrıs’a ihraç edilen başlıca ürünler arasında; plastik ürünler, ahşap mobilyalar, taştan yapılma yapı malzemeleri; doğal taş, traverten ve mozaik, seramik ürünler gibi, alüminyum ürünler, atık ve atıl hurda ürünler, şilteler, hasır-sepet işleri, meyve ve sebzeler başta olmak üzere patates, ıslak peçete ve taze balık bulunmaktadır. Akaryakıt, Taşıtlar,

Some of the main exported products are citrus fruits, dairy products like halloumi, vegetables (artichokes and potatoes, wheat), eggs, waste paper, cigarettes, and chicken meat. The main products exported to Southern Cyprus under the Green Line Trade Agreement include plastic products, wooden furniture, building materials made of stone; natural stone, travertine and mosaic, ceramic products, aluminum products, waste and scrap products, mattresses, wicker-basket works, fruits and vegetables, especially potatoes, wet wipes, and fresh fish. Major imported goods include fuel, vehicles, confectionery, construction steel, alcoholic beverages, pharmaceuticals, animal feed, IT accessories, cigarettes, industrial machinery, mobile phone parts, corn, cement, and furniture and fittings.

22. Who are the main foreign trade partners of the TRNC?

Turkey, Kuwait, Iraq, Iran, the United Kingdom, Saudi Arabia, the United Arab Emirates, Qatar, Russia, Germany, Japan, China, and Italy.

23. What is the Green Line Regulation/Trade?

The Green Line Regulation governs the movement of goods, services, and people across the Green Line that divides the island.

24. Is there any Free Zone in the TRNC?

Yes, there are two official free ports and zones: (i) Famagusta Free Port (Famagusta), covering an area of 103,000 square meters, offering opportunities for transit trade to foreign investors as well as production opportunities for Middle Eastern and Near Eastern countries. (ii) Gemikonağı Free Port (Lefke), currently under rehabilitation.

25. What activities are allowed in the Free Ports and Free Zones?

The operations and activities allowed in the Free Port and Zone areas are as follows:

• All kinds of industrial, manufacturing, and production activities,
• Storage and export of goods imported into the Free Port and Zone areas,
• Construction, repair, and assembly of all kinds of ships,
• Banking and Insurance services,
• Any other activities approved by the Council of Ministers.

26. What are the incentives and advantages of doing business in the Free Zones?

The incentives provided to businesses established in the Free Port and Zone areas are as follows:

• Exemption from corporate and income tax on all income derived from activities and operations undertaken in the Free Port and Zone (This exemption does not apply to the export of goods and services directed to the TRNC that are not produced and undertaken in the Free Port and Zone areas).
• Free transfer of income and earnings derived from Free Port and Zone activities to any place in the world without permission.
• Exemption from customs duties and indirect taxes.
• Permission to employ foreign experts, engineers, and technical personnel.
• In addition to these incentives, there is an ample supply of both skilled and unskilled labor, and wages are reasonable. The port’s handling fees are much lower than those of neighboring ports. The port, geographically well-located, offers adequate enclosed storage space, experienced handling, and good security. A robust and receptive public service with minimal formalities provides a conducive working environment for investors and dealers. It is possible to stock goods within the free zone for an unlimited period using all kinds of port machinery (forklifts, cranes, etc.).

27. Who can invest in the TRNC?

All investments in the manufacturing sector of goods and services are welcomed in the TRNC.

28. Are there geographically prioritized areas for investments?

In accordance with the decision of the Council of Ministers dated 23 February 2017 and numbered H(K-I)482-2017; Development Priority Regions I and II and the equity ratios determined accordingly are as follows:

Priority I Regions for Development; Karpaz Peninsula, Iskele District, Güzelyurt District, Lefke District, Geçitkale

Priority Regions for Development II: All rural areas (North West region, South Mesarya) excluding the settlements determined within the scope of Priority Region I in Development, and the Maraş Land between the closed Maraş Region of Famagusta and the Bases Area Road.

Minimum Equity Ratio:

(A) Minimum 30% equity for investments to be made in Priority I Regions for Development,

(B) Minimum 40% equity for investments to be made in Priority Regions II in Development,

(C) In order to develop the manufacturing sector and support sustainable energy production, investments to be made in Renewable Energy Generation should be evaluated within the scope of Priority Region I in Development, regardless of the region, and 10% equity,

(D) Evaluating the investments to be made in the field of logistics within the scope of Priority Region II in Development, regardless of regional distinction, and 20% equity

29. Are there Organized Industrial Zones in the TRNC?

There are 15 Organized Industrial Zones in our country. Major Organized Industrial Zones are located in Nicosia, Haspolat, Alayköy, Famagusta, Kyrenia, and Yeniboğaziçi.

30. Are there Technology Development Zones in the TRNC?

There are 6 Technology Development Zones in the TRNC. These are:

• Famagusta Technology Development Zone (GMTGB)
• Eastern Mediterranean University Entrepreneurship and Innovation Center (GIMER)
• Near East University Innovation and Information Technology Center (NEU)
• Middle East Technical University Northern Cyprus Campus (METU-KALTEV)
• Cyprus International University Communication Technologies Research Center (CIU-CTRC)
• Cyprus International University Sustainable Energy Research Center (CIU-SERC)