What are the currency, tax, and banking system of North Cyprus?
The Turkish Lira (TL) is North Cyprus’ currency. In general, it is not particularly steady, and the exchange rate can favor people who earn money in pounds, euros, or dollars. In North Cyprus, transactions can be carried out in any of the major currencies. North Cyprus’ Central Bank is in charge of monetary, credit, and exchange policies, as well as acting as the government’s banker. North Cyprus banking system consists of commercial banks which can be either branches of big Turkish banks or TRNC-based local banks.
In North Cyprus, opening a bank account is simple. Although various banks may have varying needs for documents, the majority of them will want your passport and/or driver’s license. Proof of address may be required on occasion. Also, if you have an HSBC UK account and wish to open one in North Cyprus, the local HSBC will ask for a bank reference.
The majority of large banks offer a department dedicated to English speakers. In North Cyprus, there is also robust competition in high street banking, with a number of recently opened banks offering better interest rates: the most popular is Iktisatbank, Credit West, and Turk Bankasi. So, if you are looking for a savings account, do some comparison shopping to get the greatest deals.
The British Residents Society is a non-profit organization that helps and advises British citizens living in North Cyprus. The Society has direct contact with the British High Commission and the North Cyprus government departments and has a say in how ex-pat matters are handled. Members of the BRS can get reduced or better-quality services from a variety of institutions in the TRNC since the organization has agreements with them.
The BRS, for example, has negotiated reductions with some hospitals, but you must have a valid BRS card to take advantage of them. Creditwest Bank is able to provide better terms to BRS members than other North Cyprus banks. Health insurance policies are also available through the bank.
Apart from providing guidance and assistance, the BRS may assist you in integrating more quickly and making friends. They also host and organize a variety of social gatherings and activities.
Any British retiree, whether private or public sector, who wishes to retire to North Cyprus has two options:
- To pay a set annual tax rate of 5% on their pension income over €3,420 (this may differ according to current exchange rates).
- To choose North Cyprus’ tiered income tax system Taxes In Cyprus For Residents – calculate how much tax you owe as a North Cyprus resident.
Personal income earned in North Cyprus is taxed on a tiered scale, with a generous tax-free exemption of €19,500. In North Cyprus, the highest income tax rate on personal income is currently fixed at 35% on earnings above €60,000. Royalties earned in connection with intellectual property rights held in North Cyprus are subject to a 2.5 percent tax. Profits are subject to a 12.5 percent corporation tax (Note: Tax rates may differ according to current exchange rates).
The Southern part of Cyprus is an EU member and an officially recognized state. It has a more dynamic economy, more advanced facilities, and many double taxation treaties with nations all over the world (including the UK). All of this simplifies taxation for both individuals and corporations.
The cost of living in South Cyprus is typically comparable to that of other southern European countries and is lower than that of the United Kingdom. Shopping on a daily basis is significantly less expensive if you buy local products, and you may still find a lovely beachfront house at a reasonable price. When you have settled down and discovered nice local cafés and restaurants catering to locals (rather than visitors), you’ll find that dining out is also inexpensive, and the cuisine is generally excellent.
Nicosia may appear to be the most costly city in the country, which is one of the reasons ex-pats prefer to reside elsewhere. If you want all the refinement of city life with fewer summer tourist throngs, it is worth spending a little extra to live in Nicosia. When you relocate to South Cyprus, you will save the most money thanks to a favorable taxation structure for retirees and the South Cyprus Non-Dom Program.
Although many ex-pats find the island to be appealing and picturesque, there are pros and cons to moving to North Cyprus. Before making a move, it’s a good idea to be aware of both. The weather is perfect, with lots of bright and long sunny days. Especially in the north, there are several opportunities for an active outdoor lifestyle, including superb golf courses and magnificent mountain trips. You may enjoy water sports and even go skiing in the Troodos Mountains during the winter months. For a relaxed day by the sea, there are various great beaches to choose from. On both sides, a considerable proportion of inhabitants know enough English to avoid the need to learn Greek or Turkish.
Cyprus has beautiful weather with plenty of bright, long sunny days. There are several chances for an active outdoor lifestyle, including excellent golf courses and breathtaking mountain excursions, particularly in the north. During the winter months, you may enjoy water activities and even go skiing in the Troodos Mountains.
There are several wonderful beaches to select from for a relaxing day by the sea. A large number of residents know adequate English on both sides to eliminate the need to study Greek or Turkish. However, if you make an effort, your local community will appreciate it enormously.
Low taxes and a cheaper cost of living are a boon to your wallet. This is particularly true if you want to relocate to North Cyprus.
Both sides have excellent ex-pat communities. The months of January and February might be unpleasant since it rains frequently and it can be rather chilly. July and August can be oppressively hot, necessitating the use of air conditioning. While there are not many direct flights to other European nations, there are many to and from the UK. The internet can be spotty and expensive. Both sides pay a high price for imported items.
You can click here to read about other sectors of the economy in North Cyprus!