Cyprus citizenship by investment

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 the creation 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 area 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 organisations 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 organisations 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. Also, 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 organisations 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. To confirm that the investments that meet the criteria of the current Programme will be kept for at least five years, the manager or the auditor of the Fund shall inform in writing and on an annual basis, the Ministries of Finance and Interior regarding 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 investments mentioned above

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.

Which other family members are entitled to obtain citizenship of Cyprus along with an investor under the program: spouse, children, parents?

An applicant and other dependent family members – spouse, minor children (under age 18) and financially dependent adult children (students under age 28) obtain citizenship. Parents can also get Cyprus Citizenship by buying a property for a minimum €500,000 if their Children already acquired it. 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.

Are there any requirements to an investor related to living in the country before obtaining citizenship.

There are no requirements.

Is it 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 of Cyprus a full value passport of a European Union member state?

Yes, that is precisely so.

Is an investor required to reside in Cyprus after he/she has obtained citizenship to retain it?

No, you are not required to reside in Cyprus.

What tax burdens are imposed on an investor after obtaining Cypriot citizenship? Will the investor be required to pay taxes on income received from sources located abroad?

No new or additional tax liabilities arise for the investor unless he 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.

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 principal 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 CIP application.

Is the purchase of a private property a necessary 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 apply, 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 an 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 real estate. If you bought several residential properties of the same amount, then you don't have to purchase other property. The investment may be sold after five years; however, the investor must always maintain a property with a value of at least €500,000.

Please, advise whether I lose entirely or partly invested money?

You lose nothing. After five 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 citizenship?

As far as the sale of your villa is concerned the law provides for such an option only five years after purchase. Within the first five 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 purchase numerous 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 five years you can sell your properties provided that you always keep on your name one house or apartment which you purchased for a minimum €500,000.

Investments must necessarily be made personally or can they be made through company/companies of the investor or an investment fund or a 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?

The transfer fees are not included in the amount of the investment, as no other charges or taxes are.

Is real estate investment for CIP 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?

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 citizenship expire?

No. When you acquire Cyprus citizenship by way of investment under the 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 at least five years since the date of the Naturalization?”

It means that to file a Naturalization application by 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 applies 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 five years following the acquisition of citizenship. The five-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 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 to apply 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.

Can the investor sell his/her privately-owned residence and purchase a different one of the same or higher purchase value?

Yes, provided that he/she will buy a different residence of equal or higher purchase value.

Are there any changes in Cyprus Investment Programme in 2019 comparing to 2018?

The Council of Ministers has revised the CIP on the 13/02/2019. The new provisions are valid 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 Land development Corporation and another donation of €75.000 to the Research and Innovation Foundation which can be waived under specific criteria. Also, the applicants must hold a valid Schengen visa. For full guidance on the new provisions of the program, please read our article.