HOW TO BUY A HOUSE IN CYPRUS?
Cyprus Island is one of the 5 safest regions in the world in terms of terrorism and common crimes. It is among the fastest passing the epidemic exam in the coronavirus epidemic and the pandemic announced in the world. Especially the Turkish Republic of Northern Cyprus was the first country to reset the coronavirus with the measures taken at the beginning of the epidemic and the decision to close.
HOW TO BUY IMMOVABLE PROPERTY IN TRNC?
On the condition that foreigners obtain a purchase permission from the Council of Ministers in the Turkish Republic of Northern Cyprus, that is, Section 9 of the Law No. 2/2008 on Acquisition of Immovable Property and Long-Term Lease (Foreigners), foreign real or legal persons are states that you can obtain. Pursuant to this law, the quota per person is one (1) immovable property (house or apartment not exceeding 5 acres or land not exceeding 1 donum). After obtaining the relevant purchase permission from the Council of Ministers and then going to the title deed office where the immovable property is located and / or the nearest land registry office, they can complete the transfer procedures. and although the right to purchase is limited to only one immovable property, as of today, the husband and wife are considered independently of each other and each can purchase real property separately. I would like to emphasize that it is a prerequisite not to enter into a contractual relationship, but to transfer the title deed. The authorization procedure for the purchase is described in more detail below.
TRANSFER OF IMMOVABLE PROPERTY:
The transfer process in Northern Cyprus is as follows.
After the contracts are prepared by our firm's lawyer, after the examination and / or exchange by both legal and real persons who will be a party to the contract, the Contract is signed at the same time when all parties and witnesses are present in the same environment. In case all of them are abroad, a power of attorney will be prepared by our lawyer and a power of attorney will be issued in accordance with the authorization you will give to our attorney or to a person you designate, and the immovable property contract is signed.
2. Stamping and registration of contracts:
Within the scope of the law numbered 38/2007, all Sales Contracts must be registered with the Regional Land Registry Office within 21 days from the date of signature. Stamp tax must be paid before the registration process. Before registering the sales contract, you must pay the stamp tax. If paid within 30 days after the signing of the sales contract, the stamp tax will correspond to 0.5% of the purchase price, and if delayed, a fine will be imposed. After the Sales Contract is registered, it is considered as an annotation on this real property and protects you from double selling, mortgage on the property and other obstacles and restrictions.
3. Purchase permit application:
After the contract is registered in the title deed, your application to the Ministry of Interior for purchase permission is made by us. Documents required for the permit application, photocopies of ID or passport, and a police record from your country of citizenship showing your registration record. The original Police record must be brought in Turkish or English. Police records in other languages must be translated into Turkish or English and certified as complete and correct translation and stamped with the Apostille stamp. The applicant's registration record is considered as the decision-making factor. If your application provides all the controls, it will be authorized by the Council of Ministers. Most of the applications are successful. In rare cases, the reason for refusal is the applicant's registration due to serious accusations or the location of the property and its proximity to strategic military premises. According to the law, the Council of Ministers has the power to impose restrictions on the purchase of immovable properties in some regions by foreigners. Until now, the Council of Ministers has used this authority only for national security reasons to restrict the acquisition of immovables close to military zones. The estimated time for obtaining a purchase permit is between 6-12 months. You cannot take your immovable property in your name at the land registry office without obtaining your permission to purchase from the Council of Ministers, however, provided that your contract can be transferred by assignment, you can receive, rent or sell your property before your purchase permission is given and the title deed is transferred to your name.
4. Title deed transfer:
After your purchase permission is approved, we are ready to transfer the title deed and. It will be paid during the deed transfer over the value determined by the Land Registry Office after we complete all the evaluation forms required for the valuation and appraisal of the immovable property and submit it to the Land Registry Office. In the evaluations made by the land registry office, the contract price is made according to the market values of similar properties in the same region recently. After the evaluation result, you will be asked to be ready on the day and time determined at the land registry office after we provide information about all the fees you will pay during the transfer. However, if you have appointed us for the transaction, you will not be present at the Department of Accident Land Registry and we will complete the transfer procedures for you.
As a general rule, although the Buyer is responsible for paying the transfer fee and the Seller the value increase tax. If the Transfer is subject to VAT, the matters regarding which party will pay and whether the sale will be VAT included or excluded are determined in the Sales Contract.
6. Taxes That Can Be Paid At The Deed Office:
a) Transfer fee;
The transfer fee is 6% of the appraised value to be paid during the title deed transfer. However, everyone has the right to reduce this one-time tax to 3%. However, in parallel with the temporary increase of the property acquisition quota for each foreigner as mentioned above, the transfer fees to be paid by foreigners have also been changed as follows; 3% for the first real estate, 9% for the second flat and 10% for the third flat. Please note that the percentages are valid for 6 months from 29 August 2018. In addition to the transfer fee, a small municipality contribution will be paid during the transfer. This fee is 1% of the transfer fee.
VAT is 5% of the sales price or the appraised value. The transaction will be subject to VAT only if the Seller is evaluated as a "Professional Vendor". From time to time, the seller may request that the VAT be paid during the transfer of savings of the relevant immovable property rather than the transfer of title deed. If VAT has been paid before the title deed transfer, please make sure you request a VAT invoice and receipt and keep them securely as they will be submitted to the Tax Office to prove that the VAT has been paid.
c) Stopage Tax;
Part of the tax payable depends on whether the seller is classified as a 'Professional Seller'. If the Vendor is professional, a 4% valuation tax is applied. However, if the Seller is an individual who is not buying or selling real estate, and the one-time tax exemption right is not exercised, the withholding tax is levied at 2.8%. Each person has a tax-free right to sell a house and a land that does not exceed 1 acre for one time, and in this case, no withholding tax is applied. Professional Sellers do not have the right to exemption. All withholding tax rates are calculated at the appraised value and the withholding tax is paid together with the title deed transfer.
ESTABLISHING A COMPANY IN CYPRUS
In general, many entrepreneurship ideas emerge in the minds of those who come to Northern Cyprus for the first time or for a seasonal holiday. Like, "If I do x business here, I will earn a lot of money." Or there are those who recently live in the TRNC and work in an institution and think that it is time to start their own business. The subject they quickly investigate is establishing a company in Northern Cyprus. When you look at it, you can think of it as a simple procedure that can be done anywhere in the world after paying the installation cost.
But be sure to establish a company is a job that needs to be taken more seriously in Northern Cyprus.
After the idea of establishing a company, it is recommended that you get support from the expert staff of Avertiss Real Estate, who knows the business and the market you are thinking of, in every step you take.
In the TRNC Registrar of Companies, let's explain the steps of the companies that foreigners can establish, but first, why establish a company in the TRNC?
- To have a job
- To avoid paying less tax than your current country or even no tax if possible
- To carry its brand and experience to a new country market
Generally, those living in the TRNC prefer the first option. He sets up the company to get a job.
Especially if the company that owns companies in Turkey assesses the tax as a model of Northern Cyprus TRNC last option Free Zone Company.
Limited Liability Company Chapter 113 is the company structure registered under the TRNC Companies Law with limited liability of the partners. In Northern Cyprus, Local Limited Liability Companies are divided into Private Companies and Public Companies. The number of shareholders, ie the number of shareholders, is at least two (2) in a Private Limited Company, but the number of shareholders in a Public Limited Company must be at least seven (7). On the other hand, in a Private Limited Company, the number of directors, namely responsible managers, must be at least one (1), while in a Public Limited Company the number of directors must be at least two (2). If the company is established for the purpose of purchasing and preserving immovable property, the majority of the shareholders and the board of directors should not be composed of foreign real or legal persons. Otherwise, the company will be regarded as a "foreign legal entity" and / or a "company controlled by foreigners" and the rules and restrictions on the purchase of real estate by foreigners, namely one immovable property quota from the Council of Ministers (house or apartment or land not exceeding 1 acre) will need to be purchased. The condition required for the company to invest above the applied quota is that at least 51% of the company shares must be registered in the name of a TRNC citizen natural or legal entity and the majority of the board of directors must be TRNC citizens. Trustee) and is a solution partner for investment projects. Also contact Avertiss Real Estate,
In accordance with the laws of the Turkish Republic of Northern Cyprus, the minimum requirements for the registration of a foreign-owned TRNC company are as follows;
A- At least two shareholders, one of which is a manager and one is a secretary
B- A registered office in TRNC
C- A minimum of 100,000.-USD or equivalent paid up capital. This amount is blocked
in our client accounts until the company is established and is transferred to the
company's own account and used freely after the establishment is completed.
D- If a foreign director is appointed to the company, the director must provide a letter
of guarantee from a TRNC bank, valid for 18 months, to guarantee the company's
tax liabilities. This bank letter of guarantee is submitted to the TRNC Revenue and
Tax Office and a "Tax Guarantee Certificate" is received to be submitted to the
Registrar of Companies.
COMPANY ESTABLISHMENT PROCESS
The establishment process begins by choosing a company name with a few alternatives and submitting them to the Registrar of Companies for approval. Registrar approves any name unless it considers "objectionable" or conflicts with an existing name. Later, the Articles of Incorporation and Regulation are prepared, which set out the company's objectives, rules and regulations. The Articles of Association and the Charter must be signed by each shareholder in the presence of at least one witness. Since it is possible to prevent the company's activities and business as a result of any error and / or negligence, expert legal advice should be sought while preparing the Company's Articles of Association and its Statute. In case of wanting to engage in a field other than activities, the necessary add-ons can only be made by court order.
After the company name is approved and the necessary documents are prepared, an application can be made for the establishment of the company. The documents required to complete the establishment process are as follows:
1. Company formation forms
a. MŞ 1 - Statement of compliance with the requirements of the law to be obtained
from a lawyer.
b. MŞ 2 - Registered office of the company
c. MS 3 - name, address and description of directors and secretary
2. Articles of Incorporation and Statutes
3. For each foreign shareholder;
a. Who wants to establish a company can apply to our company with copies of
passports or demarche calling for the condition to be seen by the Cyprus
Consulate or transmit certified copies of passports or Apostille stamp by the
Embassy of Turkey.
b. Criminal record certificate from the country of citizenship. If the document is not
in Turkish or English, it must be translated into Turkish or English and certified
as correct translation with an Apostille annotation.
c. Proof of residence document or address, current invoice.
4. Requirements for each foreign director:
a. A Tax Guarantee Certificate from the TRNC Revenue and Tax Office as stated
b. Actually, to be seen by the Registry of Enterprises provided copies of passports or
passport transmit certified copies of the Cyprus Consulate or Embassy or
Apostille stamp by Turkey.
c. Criminal record certificate from the country of citizenship. If the document is not
in Turkish or English, it must be translated into Turkish or English and certified
as correct translation with an Apostille annotation.
d. Proof of residence document or address is required for a current invoice.
5. A block letter from a TRNC bank stating that the minimum capital of 100,000
USD has been deposited and the company will remain blocked until the
establishment as stated above is completed.
There are two types of branch company establishment in the TRNC.
1. TRNC Branches of Foreign Companies
2. Branches of Local Companies
For foreign companies, the institution that manages the process is the Ministry of Economy. Its establishment is completed by bringing the capital amount to be determined by the Ministry to the country.
Free Zone Port Company:
Free Zone Port Company, which is the type of company located in the Famagusta Free Zone.
The most important feature that distinguishes Free Port companies from limited companies is that they are not subject to Corporate Tax, Income Tax and VAT.
Of course, the only condition is that companies should carry out their activities abroad or within the free port zone only within the island. Otherwise, you cannot use this company type.
Generally, international shipping companies and IT companies prefer this type of company. If you look at the contact details of Turkey's many famous brands server and domain, it referred to as Cyprus Famagusta. They are among the ones who established a free zone port company in the TRNC to use the tax advantage. This company model, which is also known as a tax-free company in Northern Cyprus, is frequently investigated by entrepreneurs.
TAXES IN T.R.N.C
How much is the income tax in the TRNC?
One of the most curious issues is the tax paid on the non-distributed earnings after the corporate tax is deducted. Northern Cyprus income tax rate is 15 percent.
What is the corporate tax in Northern Cyprus?
TRNC corporate tax rate is 10 percent. Organizations that pay corporate tax in the TRNC are published in newspapers every year. Tax record-holder companies attract great attention.
What is the VAT rate in the TRNC?
Northern Cyprus value added tax rate is 16 percent. However, there is a VAT
advantage for some sectors.
We recommend that you ask the current table before the company establishment.