There is an abundance of different incentives offered to both local and foreign investors in North Cyprus. In this article, you will find out the incentives offered to investors in North Cyprus.
TRNC development policies provide incentives that support investors. The most important of these incentives is the TRNC Investment Incentives offered to all investors regardless of whether they are local or foreign. North Cyprus always prefers and prioritizes export-oriented industrial investments. Value-added projects with the potential to bring modern technologies, know-how, and new production techniques to the TRNC are also a priority.
What is an Incentive Certificate?
An Incentive Certificate is a document you must have to apply to incentives for your investments in North Cyprus. To acquire this certificate, those looking to should contact the State Planning Organization The TRNC Incentive Certificate application for your chosen project is first examined to determine whether it complies with legal criteria prior to undergoing a feasibility study conducted by the Economic Planning Department under the consultation of the relevant ministry and the Environmental Protection Department. Once all approvals have been acquired, if the investor is in need of a credit incentive, one final application is sent to the Development Bank.
What incentives are there for investors in North Cyprus (for all sectors)?
200% Investment Discount
If your investment in North Cyprus falls within the category of ‘priority regions for development’ as determined by the State Planning Organization, your investment will also qualify for an investment discount. This discount is calculated as 200% over the cost. Morphou, Lefke, and Geçitkale regions have been identified as priority regions for development by the TRNC Council of Ministers. If the region in which you are planning to invest does not fall within these priority regions, then the investment discount rate is 100%.
‘0’ Customs and Fund Exemption when Purchasing Machinery
When importing machinery and equipment as part of your investment project within the scope of the Investment Certificate, the TRNC gives you a significant advantage. You will be exempt from paying customs and funds for imported machinery.
0% VAT when Purchasing Machinery
When purchasing machinery for your investment project, you will not be subject to Value Added Tax (VAT). This applies to not only imported machinery and equipment but also domestic purchases.
Land, Plot, and Building Incentives
In the event that you need to acquire fixed property within the scope of the investment project related to your Incentive Certificate, the State assesses your request to see whether it is in accordance with the legislation in force. If your request is deemed suitable, investors are given priority for renting plots, land, and buildings within the current bounds of possibility. In terms of support for tourism, public land and buildings can be rented by investors for anywhere between 10 to 99 years.
Fee and Contribution Exemptions for Construction Permit Applications
If you were to require a permit for the buildings you have built within the framework of your investment project, you will be exempt from certain expenses. Those looking to Invest in North Cyprus are exempt from paying taxes, fees, and contributions when acquiring building/construction permits.
Stamp Tax Discount for Increasing Capital
Investors possessing an Inverstors Certificate can take advantage of discounted Stamp Tax payments, a tax paid when increasing capital.
Fee Discounts for Mortgage Transactions
Any stamp or registration fees encountered due to necessary mortgage transactions for getting credit for your investment will be subject to discounts.
What are some of the other Tax Incentives Available to Investors in North Cyprus
• Due to depreciation, an investment discount is applied to purchased and imported goods given that they are purchased brand new, which is 50%. The discount rate is calculated based on the purchase cost of buildings, machinery, tools, and equipment…
• Start-up expenses for your investment (including expenses of your first facility) depreciate equal to the amount stated in your accounting records within 5 years.
• All expenses incurred for patenting and patent rights are subject to discount.
• Tools, equipment, furnishing, and fixtures that do not exceed the gross minimum wage within the year of purchasing are not subject to depreciation and qualify as expenses.
• Those exporting goods and services from the TRNC to foreign countries qualify for a 20% Corporate Tax discount.
• However, this discount cannot exceed 80% of the net income resulting from exported goods and services.
• Exported goods and services are exempt from Value-Added Tax.
• Shipping transactions that originate in a foreign country and pass through or terminate in the TRNC as well as shipping transactions that originate in the TRNC and terminate in a foreign country are exempt from VAT.
• VAT is not paid for services in seaports and airports used by taxpayers exclusively in order to generate income.
Advantages of the TRNC’s Free Port and Free Zone
Apart from the incentives offered to Investors in North Cyprus, businesses operating within the region known as the free zone can also take advantage of many incentives. Here are some of the advantages offered within these regions:
• The earnings of businesses operating within the Free Port and Free Zone are exempt from Company Tax and Income Tax.
• Earnings or capital can be freely exported, without any restrictions.
• Activities and transactions within these regions are exempt from many taxes, with customs being the most critical one.
• Free Ports and Free Zones in North Cyprus allow the employment of foreign experts, engineers, or technical personnel.
The Advantages of the TRNC’s Organized Industrial Zone
• Ready-to-build-on land with substructures are available for low rental prices.
• The maximum term for reserving a place in the Organized Industrial Zone is 33 years (with a possible extension period of 1-2 years).
• Buildings constructed on rented plots within these areas qualify for title deed registration, conveyancing, and mortgages.