Why Northern Cyprus .: Economy in Northern Cyprus :.

Economic Advantages

Northern Cyprus applies a free market economy approach. Turkish Lira is the official currency used in the area where the stability of the macro economy has had positive progresses in the recent years. The economy has been facing affirmative progresses as a result of the stability achieved in Turkish Lira, “The comprehensive settlement of the Cyprus problem” report developed in 2003 by the United Nations, the opening of border crossing between Northern and Southern parts and the political policies applied by both governments on the island. Due to the improvements in the investment climate, the growth rate between 2003 and 2009 was 6.47% which is one of the fastest rates compares to other European countries.

With its sectoral allocation of Gross Domestic Product (GDP), Northern Cyprus’s economy resembles the characteristics of an “island economy”.  As shown in the graph below, the Services Sector is the most developed where Agriculture and Industry Sectors supply for the services sector. Please see `Investment Opportunities` section for more detail.

GDP According to Sectors (2009)

Key indicators of Northern Cyprus’s economy are shown below:

The following graph show demonstrates the allocation of Northern Cyprus’s exports according to the countries.

Northern Cyprus' exports (2009)

Despite its small size of economy, Northern Cyprus has one of the highest growth rates among European Union countries, which is a potential advantage for your business to benefit. However, due to the increase in the world petroleum prices and the investment bank and mortgage crises, a decline is anticipated in the Northern Cyprus’s economy which is the case for most of the countries in the world.

Currently, there are 24 commercial banks plus a Development Bank operating in Northern Cyprus. The number of branches with the origin of Turkey is 7 and the total deposit is around $6.5 billion as of 2009 . International companies such as HSBC, ING, Garanti Bank, TEB, İşbank, Ziraat, Halk Bank, Groupoma, AXA and many others are ready to provide banking and insurance services for your investments.

Additionally, Northern Cyprus offers a Free Zone in Famagusta where businesses in the Famagusta Free Port can operate with a complete exemption from corporate tax, income tax and are not subject to customs or any other formalities. Middle-East and Near-East countries can benefit from the manufacturing opportunity where the Zone also provides chances for transit trade.

Currently, Higher Education Sector is one of the main service sectors for Northern Cyprus which contributes to the current account and the economy. 9 universities (3 will have their first education year in 2010) operating in the area attracts students from many different countries. The following table shows expected number of students in the next few years. (Note: One of the new universities will have online-higher education)

Retired foreign citizens show a significant demand for buying a retirement home from Northern Cyprus where we have approximately 10 thousand foreign retired families living in the area.  Cyprus is already well-known location in certain countries due to the strong ties with the United Nations Soldiers and the United Kingdom which dates back to the Colonial Period. Especially, the British Society is very active in the Northern Cyprus.

In addition to the economic advantages offered for your investment, European Union is actively involved in the development of the economy in Northern Cyprus. You can visit Europe Aid’s website (https://webgate.ec.europa.eu/europeaid/online-services/index.cfm?do=publi.welcome) for more information about the tenders in our location.