It is imperative to get the permission of the Central Bank for the establishment of a bank in the Turkish Republic of Northern Cyprus or opening of the first branch in the Turkish Republic of Northern Cyprus of a bank that already been established in a foreign country. The principles and procedures regarding the applications and rendering permissions are determined through an official notification by the Central Bank.

The provisions for establishing a bank in the Turkish Republic of Northern Cyprus, are given as follows: The founder of the bank should be:

1. The Turkish Republic of Northern Cyprus citizens who are natural persons (not corporations);
2. In the case of foreign real and legal persons becoming founders of a local bank in the Turkish Republic of Northern Cyprus, the founder (whether real or legal person) who is a Turkish citizen and residing and operating in the Republic of Turkey or any real or legal person who is a citizen of a country that has diplomatic relations with the OECD member countries and the Turkish Republic of Northern Cyprus must have a shareholding of at least 51% (fifty one percent) in a bank operating in Turkey or in any bank having no restriction on its operations and which is currently operational in one of the OECD member countries, or controlling this bank through indirect participation of shares that secure minimum majority; the corporate body founders to have obtained the permission, given by the authorities responsible for implementing and auditing banking rules, in Turkey and OECD member countries, that maintains its validity as at the date of the application, and enabling them to conduct banking business without any restriction in the said countries;

For the purpose of this Law, the following companies are considered as indirect participants;

1. The companies in which a natural person, with his/her spouse and children, participates with unlimited responsibility or acts as its Chairman, Member of the Board of Directors, General Manager or Assistant General Manager, and
2. The companies, in which the participants, as mentioned in sub paragraph (a), participate directly or indirectly with shares over 25% (twenty five percent) of companies capital.
   
   
3. The founders, should not be declared bankrupt, not to be sentenced to imprisonment for a period of more than six months even if they have been later pardoned for disgraceful offences such as misappropriation, embezzlement, corruption, bribery, theft, fraud, forgery, breach of trust, tax evasion and should not be owning more than 10% of the shares of a bank, insurance companies or any other company dealing in securities and investment business which has been subjected to statutory liquidation.

The minimum amount of paid up capital of a bank should be New Turkish Lira equivalent USA of $ 2,000,000 (Two Million USA Dollars) which must be fully paid in cash and must be free from all types of fictitious transactions. 

However, the Central Bank is empowered to double, if deemed necessary the minimum amount of capital envisaged above,

The banks that have been established and commenced operations in the Turkish Republic of Northern Cyprus or of which application procedures have been completed, are eligible to receive a banking license to accept deposits or conduct banking operations, by applying to the Central bank. It is obligatory to attach, to the application, the document showing that the Turkish Lira equivalent amount of $20,000.- (Twenty thousand United States Dollars), for the license fee, has been deposited into an account, in the name of the Treasury and held at the Central Bank. Provided that the Turkish lira equivalent of $10,000.- (Ten Thousand United States Dollars) amount of the license fee is deposited until the end of January each year, into the account held at the Central bank which is in the name of the Treasury, the banking licenses of banks are automatically renewed.

The foreign banks that are operating by opening branches in the Turkish Republic of Northern Cyprus, are obliged to notify the Central Bank, within one month at the latest, as from the date of their opening of the second branch and also to submit in a separate declaration indicating one of their branches as the administrative centre authorised to represent all their other branches.

The minimum number of shareholders of a bank is 10. The banks are all incorporated as public limited companies to enable the buying and selling of shares without any restrictions.