2. FOREIGN INVESTMENT POLICY
Encouragement of foreign investment is among the primary objectives of the Turkish Republic of Northern Cyprus’ development policy. Consequently those wishing to invest in the Turkish Republic of Northern Cyprus can be sure of a positive Government attitude.
In accordance with its development policy Northern Cyprus is giving preferential treatment to exportoriented
industries. Due to its small domestic market the TRNC authorities focus on export of goods and services. Priority is given to those projects that facilitate transfer of modern technology, knowhow and new management techniques into the TRNC. However, it should be mentioned that every project proposed by an investor will be considered on its own merits.
Co-operation between local and foreign firms in the form of joint ventures is actively promoted, and Northern Cyprus offers numerous advantages and incentives to the foreign investor including full protection of his property rights. Nationalization has never been part of government policy nor is it contemplated in the future. The Constitution of the TRNC guarantees the right of private property while it does not discriminate between citizens and aliens.
The fixed capital investments have been 645,460,056 YTL at current prices in 2005. The public sector financed 27% of total fixed investments and the remaining 73% was financed by private sector. Public services and transportation sector constituted the biggest shares of the public sector investments. The shares of public sector investments have been 53% and 26.8% respectively. On the other hand, private sector investments have been intense with 43.1% in dwelling and with 11.7% in manufacturing sectors. According to the estimation for the year 2006, fixed capital investments are expected to reach 848,733,923.5 YTL at current prices.
Under the Incentive Law, 290 incentive certificates have been granted until the end of the year 2006. The total of fixed investments with incentive certificate amounted 2,406,665,743 YTL. Tourism sector has the highest share in fixed investments and this sector occupies 69.7%. Industry and education sectors follow it with 19% and 9.2% respectively.
By the end of 2006, the total amount of credit approved to be financed from the Fund is 29,641,184.6 YTL, of which 18,663,544.1 YTL has been used. The distribution of the used credits by tourism, industry, health and education sectors has been realized as 33.5%, 30.0%, 23.4% and 13.1% respectively.