AMENDMENTS TO THE CYPRUS CITIZENSHIP FOR FOREIGN INVESTORS
In light of the global recession and ever evolving fiscal and monetary policies of many states that impact investments, there has been an increased interest by foreign investors in relocating their funds and families to a jurisdiction that offers stability and security. Certain changes to the Cypriot immigration policy and legal framework now enable foreign citizens to obtain Cypriot Citizenship on an expedited basis.
The citizenship by investment program in Cyprus enables foreign citizens to apply for a Cyprus citizenship provided that they:
- purchase and maintain a privately owned residence in Cyprus, the value of which must be at least €500,000, excluding VAT;
- have a Clean Criminal Record from the country of origin and/or the Police of the Republic of Cyprus;
- confirm that the applicant’s name is not included in the list of persons whose property is ordered to be frozen by the EU;
- visit Cyprus at least once;
- are 30 years old and over.
Following recent amendments, the applicant is required to meet one of the following key financial criteria in order to apply for the Cyprus citizenship:
- Deposits in Banks operating in Cyprus, for a minimum amount of €5 million, and fixed for a three-year period. The list of eligible banks includes local banks and subsidiaries of foreign banks operating in Cyprus, but excludes branches; or
- Direct investments in Cyprus for a minimum amount of €5 million in any of the following ways:
- Purchase of Cyprus Government Bonds with a minimum maturity of three years;
- Investment in bonds or debentures registered and issued by Cyprus companies or businesses or organizations, with a minimum maturity of three years;
- Investment in real estate development projects including housing or commercial development projects, tourist industry developments or other infrastructure projects (excluding undeveloped land);
- Purchase, incorporation or participation in Cyprus businesses and companies that are based and operate in Cyprus. Such companies are required to have a physical presence in Cyprus and to employ at least five Cypriot citizens. This criterion includes share participation in a Cyprus bank, and also applies to foreign investors who have been holding shares (directly or indirectly) in Cyprus companies, or have been appointed as Executive Managers therein for three years prior to their application for Citizenship, earning remuneration resulting in tax revenue for the Republic of at least €100,000 and provided they maintain their investment in the said companies for another three years from the date the Citizenship is granted; or
- Combination of any of the criteria listed in the above two schemes; or
- Collective Real Estate Purchase Schemes comprising of an investment in the amount of:
o €2.5 million per investor, where the total value of the collective real estate investment is at least €12.5 million; or
- Impaired Deposits in Popular (Laiki) Bank – the applicant has impaired deposits amounting to a minimum of €3 million. In case of impaired deposits of less than €3 million, the applicant can proceed to make additional investment(s) based on any of the above mentioned criteria.
It is worth noting that the Cypriot Citizenship program combines a necessary level of flexibility, evident by the ways in which an investment can be effected with a reasonable degree of return on the investment to be made.
The key elements that need to be considered by applicants when selecting the appropriate jurisdiction for citizenship include:
- Security over Funds: The jurisdiction should offer financial, political and social stability coupled with an attractive tax regime. Applicants can benefit from the fiscal benefits in Cyprus e.g. low personal income tax, no inheritance taxes and low property taxes. Furthermore, they are re-assured that their investments in Cyprus are protected by legislation that is harmonized with EU directives affording stability and security. The Troika have provided Cyprus with bailout funds which have fueled the necessary liquidity to support the island’s economy.
- Speed and Process of Application: The respective immigration authorities should handle the applications in an efficient and prompt manner. In Cyprus, the fast track Citizenship is finalized within 3 to 6 months. The applicant can include their dependent spouse and children on the application, and they are not required to travel to Cyprus to submit the Citizenship application.
- Return on Investment: Real-estate investment is required for Citizenship applications. Currently, property is available at competitive prices and expected to substantially rise in value in the subsequent years, especially in light of the positive developments regarding the anticipated Cyprus gas revenues which will create new opportunities in real estate development.
Successful Cypriot Citizenship applicants can enjoy equal treatment with nationals with regards to social benefits, education, welfare, and access to EU territories with the Cypriot passport. Citizenship holders do not become tax residents in Cyprus unless they spend more than 183 days on the island in any calendar year.
Cyprus offers a high standard of living, modern transport and infrastructure, excellent academic institutions, access to quality medical services, a stable government and a robust legal framework which is fully harmonized with EU directives. The recent amendments to Cypriot Citizenship by investment policy have eased the criteria to obtain Citizenship in Cyprus in an attempt to incentivize high net worth individuals to invest in the island. Cyprus has already granted numerous permits to affluent Chinese, Indian and Middle Eastern individuals and their dependent family members who are looking for a jurisdiction that offers financial stability, a gateway to Europe and a quality standard of living for their families.
We have a team of professionals who can advise you on the requirements and procedure for each immigration category, and advise you on the most suitable immigration solution, tailored to your specific business and personal circumstances. Please contact Charles Savva at [email protected] or (+357) 22516671 or Stella C. Koukounis at [email protected] to discuss our immigration services further.