The recent amendments to the Naturalization of Investors in Cyprus by Exception Scheme established the Cyprus Citizenship by Investment Program.
The Cyprus government has formulated a citizenship scheme aimed at high net worth individuals and investors. This allows the successful applicants and their family to hold a Cyprus passport and enjoy all the benefits of a Cypriot and EU National within 6 months.
According to the Council of Ministers Decisions (dated 13.09.2016 and subsequent decision 21.05.2018), non-Cypriot Investors can acquire the Cyprus Citizenship by Naturalization and the Cyprus Passport for them and their families (by the exception on the basis of the Civil Registry Laws of 2002 - 2017).
Α.1 Investment in real estate, land development, and infrastructure projects
The applicant must have made an investment of at least €2,0 million for the purchase or construction of buildings or for the construction of other land development projects (residential or commercial developments, developments in the tourism sector) or other infrastructure projects.
It is noted that investment in land under development is included in this criterion, provided that an investment plan for the development of the purchased land will be included in the application. It is understood that investment in land that is situated in a building zone of zero development, is excluded.
Α.2 Purchase or establishment or participation in Cypriot companies or businesses
The applicant should have made a purchase or should have participated in companies or organizations established and operating in the Republic of Cyprus with investment costs of at least €2,0 million. The invested funds shall be channelled towards the financing of the investment objectives of these companies exclusively in Cyprus, based on a specific investment plan. The applications shall be evaluated to verify that the companies or organizations have proven physical presence in Cyprus, with significant activity and turnover and employ at least five (5) Cypriot or citizens of European Union member-states. The minimum number of employees shall increase if more than one applicant invest simultaneously or almost simultaneously in the same business or company. In addition, the employees of the companies need to have legally and continuously resided in Cyprus during the five years preceding the application submission date.
Α.3 Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by CySec
The applicant should have bought units of at least €2,0 million from alternative investment funds (AIF) established in the Republic of Cyprus, licensed and supervised by the CySec and whose investments are made exclusively in the Republic of Cyprus, in investments that meet the criteria of this Programme or in areas approved by the Minister of Finance. In order to confirm that the investments that meet the criteria of the current Programme will be kept for at least three years, the manager or the auditor of the Fund shall inform in writing and on an annual basis, the Ministries of Finance and Interior with reference to the value of the initial investment.
The purchase of financial assets of Cypriot companies or organizations of at least €2,0 million, such as bonds, bills and securities, issued with the approval of the CySec, by companies that have proven physical presence and substantial economic activity in the Republic of Cyprus, and have as a purpose the financing of the investment plans of these companies or organizations exclusively in Cyprus, based on an investment plan, fall under this criterion.
It is noted that the purchase by an AIF of units of other AIFs is not considered eligible.
Α.4 Combination of the aforementioned investments
The applicant may proceed with a combination of the above investments, provided that the total investment will amount up to at least €2,0 million. Within this criterion (combination of investments) the applicant may purchase special government bonds of the Republic of Cyprus, up to €500.000, which will be issued by the Public Debt Management Office of the Ministry of Finance, on condition that the investor will retain these bonds for a three-year period. The characteristics and the terms of these special bonds will be determined by the General and Special Issue Terms of the Government Bonds of the Republic of Cyprus. Investments in government bonds through the secondary market are not considered eligible.
The application can be submitted on behalf of the applicants only by persons registered with the Registry of Service Providers (Registry) of the Cyprus Investment Programme regulated by the Committee of Supervision and Control for the Cyprus Investment Programme (CIP).
Our Law Firm is duly registered with Registry No.110.
It is required as mentioned above that prior to the naturalization as a Cypriot citizen, the applicant must hold a permanent residence permit in Cyprus for 6 months.
This application can be made simultaneously with the Cyprus Citizenship application without any other documents. For the issuance of the permanent residence permit the applicants must be present to Cyprus for the collection of their biometric data (fingerprints and photograph) and signature. After the collection of the biometric data, the Immigration Permit (card) is issued within five working days.
1. Curriculum Vitae (CV) for the investor, spouse & adult children.
2. Birth Certificate for investor, spouse & children (official and certified translation*).
3. Criminal Record Certificate for the investor, spouse & adult children from the country of origin and the country of residence (if different) (official and certified translation*).
4. Marriage Certificate (official and certified translation*).
5. 2 Passport size photos for each family member.
6. Adult Children - Certificate of attendance by an academic institution (original).
7. Due Diligence Report issued through an internationally accepted database.
We provide guidance and representation through all the procedure until the approval and the issuance of the Cyprus passports.
Our immigration lawyers would be happy to meet or discuss with you and give you a detailed description of the process and our services.
Which other family members are entitled to obtain citizenship of Cyprus along with an investor under the program: spouse, children, parents?
An investor and other dependent family members – spouse, minor children (under age 18) and financially dependent adult children (students under age 28) obtain citizenship of the Republic of Cyprus. Parents can also get Cyprus Citizenship by purchasing a home for a minimum €500,000 if their Children already acquired Cyprus Citizenship. In other words, parents are NOT required to make a full investment of €2 million euros, only the purchase of a house or an apartment for a minimum amount of €500,000 is enough.
Please, advise if there are any requirements to an investor related to living in the country prior to obtaining citizenship.
There are no requirements.
Please, advise if it is required to pass a Greek language proficiency test or exam in the history of Cyprus as a condition to obtaining citizenship of Cyprus?
No, it is not required.
Is a passport of a citizen (national) of Cyprus a full value passport of a country member of the European Union?
Yes, that is exactly so.
Is an investor required to reside in Cyprus after he/she has obtained citizenship in order to retain it?
No, you are not required to reside in Cyprus in order to retain your citizenship.
What tax burdens are imposed on an investor after obtaining Cypriot citizenship? Will the investor be required to pay taxes on income obtained from sources located abroad?
Upon obtaining citizenship of the Republic of Cyprus no new or additional tax liabilities arise for the investor unless the investor opts to become a Cyprus tax resident, i.e. to spend 183 days in Cyprus (or more days than in any other jurisdiction). Cyprus tax residents who are NOT DOMICILED in Cyprus, that means they have not been Cyprus tax residents for 17 years out of last 20, by the July 16, 2015 tax legislation will now NOT BE SUBJECT to taxes on dividends, rental income and bank deposit interest on a worldwide income and income generated in Cyprus. This is indeed revolutionary!
Will Cyprus citizenship automatically grant me European citizenship?
Yes. Because Cyprus is a member of the European Union its citizens are automatically European citizens, which means you are allowed to live, work or study anywhere in Europe.
Can I include my family in my application?
Yes. All investment options to citizenship allow for dependents. ‘Dependent’ refers to: (1) children under the age of 18, (2) children between the age of 18 and 25 who are full-time students and financially dependent on the main applicant, and (3) parents or grandparents over the age of 65 years old, if they are living with or fully supported by the main applicant. Neither the spouse nor the children are required to make any additional financial investments.
Am I required to live in Cyprus?
No. Cyprus does not require you to be present or reside in Cyprus before or after the approval of your citizenship application.
Is the purchase of a private property a compulsory condition to meet the requirements of law when obtaining citizenship for investors?
Yes, that is just so. Regardless of the criterion based on which an investor will prefer to submit an application for obtaining citizenship of the Republic of Cyprus, the law provides for the purchase of property for private use the value of which is at least €500,000+VAT.
Suppose I bought a residential villa as an investment. Should I buy additional private property worth at least €500,000?
If you purchased one residential property worth €2 mln, it is not required to buy additional private property. If you purchased several residential properties of the same amount, then you don't have to buy an additional property. The investment may be sold after 3 years; however, the investor must always maintain a property with a value of at least €500,000.
Please, advise whether I lose fully or partly invested money?
You lose nothing. After three years (minimum duration of investment) you can sell investment properties and get back your invested money back.
Suppose I have purchased a villa the value of which is €2 million. But I am not going to live in it. Can I sell it as soon as I obtain a Cyprus passport?
As far as the sale of your villa is concerned the law provides for such an option only three years after purchasing. Within the first 3 years, you can sell your €2 million villas but you are obliged to maintain your €2 million investment. That means when you sell you must simultaneously buy one home for the amount of €2 million or multiple residential units for the total amount of €2 million. In case you buy multiple residential units, at least one of them must be a minimum €500,000. For example, you can buy a Villa for €500,000 and 15 apartments for €100,000 each, a total €2,000,000. After 3 years of obtaining your Cyprus citizenship, you can sell your properties provided that you keep always on your name one house or apartment which you purchased for a minimum €500,000.
Investments must necessarily be made by the investor personally or can they be made through company/companies of the investor or an investment fund or an investment foundation?
Investment through a company or fund or foundation is eligible, provided that there is a proven correlation between the investor and the company or fund or foundation.
In the case of purchase of real estate are transfer fees included in the amount of the €2,0 million investment?
The transfer fees are not included in the amount of the investment, as no other charges or taxes are.
Is real estate investment for Cyprus citizenship restricted to new properties or can I invest in resale properties (real estate sold for the second time) and be considered as a suitable investment for the purposes of applying for Cypriot citizenship?
According to the contents of the Council of Ministers’ Decision, the eligible investment is not limited to properties purchased for the first time. So, you can invest in any property resale or new. The difference of new properties is that you pay between 5% to 19% Value Added Tax (VAT) which is not refundable and is not considered part of your investment.
Will my Cyprus citizenship expire?
No. When you acquire citizenship under the Cyprus citizenship program, you and your family enjoy full citizenship for life, which can be passed on to future generations by descent.
Does Cyprus allow dual citizenship?
Yes, it does.
Can the residential property be sold or rented out once Citizenship is granted?
Since the Investor is not required to reside in Cyprus, it is possible to rent out their privately owned residence. It is also possible to replace the residential property with another property of the same value.
What does it mean: “The applicant should have concluded the necessary investments during the three years preceding the date of the application and must retain the said investments for a period of at least three years since the date of the Naturalization?”
It means that for the purpose of filing a Naturalization application in accordance with the provisions of this Scheme, the investor must have concluded the investment during the three years preceding the submission date of the said application. That is to say, if the applicant will submit an application in 2019, the investment must have been concluded during the period 2016 – 2019. Furthermore, the investor is obliged to retain the investment for at least three years following the acquisition of Cypriot citizenship. The three-year period begins on the date of the approval of the application by the Council of Ministers.
Is the VAT included in the amount of the investment or in the amount of the €500.000 purchase value of the privately-owned residence?
The VAT is neither included in the amount of Investments", nor in the amount of €500.000 required as a minimum purchase value of the privately-owned residence.
If there is a difference between the market value and the purchase value of a real estate, which amount is taken into consideration?
The purchase value.
Can real estate sold for a second time be considered as an investment for the purposes of applying for citizenship?
According to the contents of the Council of Ministers’ Decision, the eligible investment is not limited to properties purchased for the first time.
Can the investor rent to someone else his/ her privately-owned residence?
Yes, an investor may do it.
Can the investor sell his/her privately-owned residence and purchase a different one of the same or higher purchase value?
Yes, an investor may do it, provided that he/she will buy a different residence of equal or higher purchase value.
Are there any changes in Cyprus citizenship by investment program in 2019 comparing to 2018?
The Cyprus Council of Ministers has revised the Cyprus Investment Programme on the 13/02/2019. The new provisions will be effective from 15th of May 2019. The investment criteria mainly remain the same, just we have the introduction of a mandatory donation of €75.000 to the Cyprus Land development Corporation and another donation of €75.000 to the Research and Innovation Foundation which can be waived under certain criteria. Also, the applicants must hold a valid Schengen visa. For full guidance on the new provisions of the Cyprus Citizenship by investment program please read our article.
George K. Konstantinou