Cyprus, An Attractive Destination
The strategic location of Cyprus, situated at the crossroads of the busy shipping and air routes of three continents – Europe, Asia and Africa, has indeed contributed significantly to its economic growth.
Due to the country’s membership in the European Union since 2004 and the European Monetary Union since 2008, foreign investors have the opportunity to freely access the EU market, at a relatively low cost and with fewer risks across the eurozone.
Cyprus’s EU membership ensures safety and stability for investors, offering transparency and efficiency in transactions. Transparency in business practices is additionally guaranteed by Cyprus’ prosperous legislative and regulatory framework, which is based on English Common Law principles.
Thus, the effective, reliable and business-friendly legal system of Cyprus is also entirely compliant with the EU, Regulations, EU AML Directives and the Financial Action Task Force on Money Laundering (FATF). Not only that, but Cyprus actively participates in a plethora of EU programmes, encouraging Foreign Direct Investment (FDI) opportunities and focusing on its economic, innovation and entrepreneurship growth.
Cyprus Investment Programme (CIP) Considerations
The government of the Republic of Cyprus (“Cyprus”) has established a variety of incentives to attract foreign direct investment into the country.
The Investment Programme (CIP) is one of them, which respectively grants full Cypriot citizenship to non-Cypriot citizens that invest more than EUR 2 million and meet certain requirements set out by the Council of Ministers of the Republic of Cyprus. The Cyprus Investment Programme is based on subsection (2) of section 111A of the Civil Registry Laws of 2002-2019. The latest amendments to the CIP are effective from the 15th of May 2019 onwards. Any non-Cypriot citizen may apply for the Cyprus Investment Programme if they meet one of the investment requirements discussed below.
The qualification may either be done personally or through a company in which the applicant acts as a shareholder or as a high-ranking senior manager or through investments made by their spouse.
Amendments to the Cyprus Investment Programme (CIP):
On the 15th of May 2019, the Council of Ministers has revised the existing programme and has made certain amendments to the Cyprus Investment Programme. After the May amendments and onwards, investors applying are required to make donations amounting to at least € 75.000 to the Research and Innovation Foundation AND at least € 75.000 to the Cyprus Land Development Corporation. Exemption from the requirement above is granted in cases where the applicant has:
a. Invested at least €75.000 in a certified innovative or a certified social enterprise
b. Made an investment of a total amount equalling to the 20% of the minimum required investment amount (i.e. €400.000) in Cypriot companies which are operating within the primary or secondary sectors of the economy (excluding the construction sectors), or in the fields of research, health, education, technology and renewable energy.
Another requirement is that an investment must be made in ONE of the following options:
1. Investment in real estate, land development and infrastructure projects. The investment should amount to at least € 2 million.
2. Investment in Commercial Properties. There has to be purchase/establishment/ participation in Cypriot business and companies, amounting to at least € 2 million in companies or organisations which possess a physical and tangible presence in Cyprus and employ at least 5 Cypriot or EU citizens.
3. Investment in Alternative Investment Funds or financial assets of Cypriot companies /organisations licensed by the Securities and Exchange Commissions of at least € 2 million.
4. Combination of the above investments analogous to a total of € 2 million.
Another essential requirement that applies is the purchase of a permanent property in Cyprus. The purchase price of the particular property should be at least EUR 500,000 plus VAT. In case the applicant proceeds with the real estate option, this property can be included in the EUR 2 million investment.
Furthermore, the Law provides for the granting of the Cypriot citizenship to the spouse and the children who are not obliged to meet any additional financial criteria. Cypriot citizenship can also be obtained by the parents of the investor on the basis of the amendments of the CIP. However, an additional financial criterion applies in relation to the parents of the main applicant, amounting to EUR 500,000 plus VAT.
Amendments on the Terms and Conditions:
- Clean Criminal Record: The applicant and their family members that will apply, must ensure that they have a clean criminal record declaring respectively any citizenship applications they might have made in any other Member State.
- Schengen Visa: Adult applicants should be in possession of a valid Schengen Visa. Individuals who were rejected a visa by any other EU state will be ineligible for submitting an application.
- Residence in the Republic of Cyprus: Prior to their naturalisation, the applicant must hold a residence permit in Cyprus for a period of at least six months.
The Advantages of the Cyprus Investment Programme
Cyprus Investment Program is provided by the government with a permanent ministerial decree, and also, it has been approved by the EU. The CIP is one of the fastest procedures available, among other investment programs.
Generally, individuals who have obtained their Cypriot citizenship can enjoy freely the four freedoms of the EU set out in the Treaty of Rome and then strengthened by the Treaty of Lisbon – free movement of goods, services, capital and persons within the EU.
As a consequence, applicants can benefit from various advantages such as visa-free travel to a large number of countries worldwide, free move of capital, live and work under the policies of the European Union.
The applicant and his family can possibly enjoy the right to education, business, employment in any EU Member State and also, in the Member States of EFTA (European Free Trade Association).
Finally, Cyprus Legislation allows for a Dual Citizenship for its citizens, and it is not necessary to continuously reside in the Republic of Cyprus before or after the approval of the application.
How can we help?
As the information is general, and the legislation is subject to change we strongly encourage you to contact our office to obtain detailed and updated advice specific to your own circumstances.
Our law firm can assist you from A to Z to establish your presence in Cyprus.