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Cyprus: Greek or Turkish?

In 1964 United Nations peacekeeping forces arrived on the island following clashes between different communities.

In July 1974 Turkish forces invaded the northern part of the island and occupied about 37% of the island. The Turks essentially seized control of the northern third of the island, which they continue to hold today, despite the social, economic, and humanitarian consequences of the separation of populations on both sides of the border.

Thus, the "Turkish Republic of Northern Cyprus" was created in the north and the "Greek Republic of Cyprus" in the south and west of the island.

In May 2004 the Greek Republic of Cyprus became a full member of the European Union, but continued to use the Cypriot pound.

In January 2008 the Greek Republic of Cyprus replaced the Cypriot pound and adopted the euro as its official currency (the Turkish lira is still used in the Turkish part of Cyprus).

Today, in 2023, the merchant fleet of Cyprus is the third largest in the European Union and the tenth largest in the world.

The Greek Republic of Cyprus is considered a modern country with a stable economy and home to many international companies.

Nicosia (Lefkosia) is the only capital city in the world today that is divided (Turkish/Greek).


Where is it better to invest in real estate? Turkish Cyprus or Greek Cyprus?

The answer is that there is no definite answer!

Each investor and entrepreneur must make their own decision based on the considerations that are most important to them, especially if it is an investment that is outside the borders of Israel.


From our point of view, this is a three-stage examination:


At the first stage - we will select the desired destination


Turkish Cyprus

Greek Cyprus

Very cheap properties

🟥

Physical proximity of the property

High appreciation

The possibility of reaching the property to vacation in a place that will be fun and safe

🟥

A variety of complex services

Location close to the sea

A property that will allow relocation in case of need or emergency

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Security and trust in the country in which the investment was made

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Registration in the land registry under the state

Turkey

Cyprus

Airport

🟥

In the second stage - we will select the local entrepreneurs with whom we will collaborate

One of the keys to success in investing in real estate projects outside of Israel is to collaborate with a local partner or entrepreneur with proven experience in the market, strong financial backing, and good industry connections. This is all subject to a working model that reduces risks such as guaranteed returns for a limited period of time, professional understanding of the associated costs of local and Israeli taxation (especially when there is no tax treaty), and more.

This is precisely the reason why large entities carefully select only the partners who may contribute to increasing the profit potential in every deal, while providing complete security for investors.

See an article on the topic: The importance of the local partner


In the third stage - we will understand the associated costs of purchasing the property

For example, taxes applicable to the transaction (purchase tax or VAT), stamp duty, management fees, monthly and annual taxes, lawyer's fees, notary fees, and more.

See an article on the topic: Taxes in Cyprus - Making the complicated simple


Year 2023

As of today, the island is still divided into Greek Cyprus and Turkish Cyprus, with real estate transactions being carried out on both sides of the divide. However, it is important to emphasize that:

North Cyprus (Turkish) is not recognized by most countries in the world – except for Turkey – and is not a member of the eurozone, so the financial laws and currency in use there are different. The European Union in general and the international community see it as an occupying force and its presence has been condemned in several resolutions of the UN Security Council. The UN also sees the declaration of independence of North Cyprus as illegal.


So where is it still worth investing in real estate - Greek Cyprus or Turkish Cyprus?

If we take into account all the considerations we mentioned in this article, together with the troubled security reality that exists between Israel and Turkey in recent years, our professional opinion is that undoubtedly Greek Cyprus is the safest and most profitable to invest in.

Our answer is based mainly on the relationship between Israel and Turkey, which has not been stable in recent years, especially in these tense times, but also generally for extended periods of time in recent years. Turkey has become a destination that is not necessarily friendly for Israeli tourists, and in some cases there is even a travel warning with specific reference to Turkey as a dangerous place for Israeli citizens and tourists.

Therefore, even if we can get a quarter or half a percent higher in guaranteed return on a project in Turkish Cyprus compared to a parallel project in Greek Cyprus, we would still prefer to invest in Greek Cyprus.

We hope we were able to share a little bit of our experience and knowledge about choosing an investment destination in Cyprus.

For any additional questions, please feel free to contact us.

Ofek Zamarot from Zamarot Real Estate Group.

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