In an effort to give motives to foreign investors and attract foreign investments, the Council of Ministers of Cyprus in September 2016 revised the criteria on Cyprus Citizenship and reduced considerably the amount of investment required from 2.5 million Euros to the amount of 2 million Euros as the minimum threshold to be invested by investors.
Needless to say that a clean criminal record is a requirement for the criteria to be fulfilled and the applicant may proceed to further establish and preserve his rights of Cyprus Citizenship.
I may stress that an investor who doesn’t live and work in Cyprus, but has managed to obtain citizenship, cannot be subsequently be deprived of his citizenship.
Some of the key factors that make Cyprus an attractive destination for investments are the reliable legislative framework, the stable tax system, there are no hidden charges and the crime level in Cyprus is kept at a low level and this can enhance business activities associated with family life. Upon obtaining citizenship of the Republic of Cyprus, there are no new tax liabilities associated with obtaining citizenship of the Republic of Cyprus.
The property or properties can be transferred in a company and the company in Cyprus can last forever, which means it never ends and the family members who can be the shareholders of the company, can feel additional security.
A non-Cypriot citizen can apply for the acquisition of the Cypriot citizenship through naturalization by exception, provided that he can fulfill the following economic criteria. The investor must invest an amount of at least € 2 million either in immovable property, developments and infrastructure projects, or in acquiring and incorporating or participating in Cyprus businesses, or in alternative investment funds and financial assets of Cyprus businesses which are established in Cyprus and licensed by the Cyprus Securities and Exchange Commission, or, finally, in a combination of the three financial criteria laid above. I may stress, though, that in the case of the combination, the investor may also invest in government bonds for a maximum amount of € 500.000 and provided that he holds the bonds for at least 3 years. After the elapse of the three year period from the date of approval of the citizenship, one can sell the investment properties, bonds or shares and get his funds back. Nevertheless, on obtaining citizenship in Cyprus, one has a legal right to let his property and he can obtain a good income as a result. Therefore if someone has a good return there is no actual need to sell his property and investments.
A high-ranking senior manager or executive director in a company can apply for citizenship provided that he receives such a remuneration that generates for the Republic tax revenues of at least €100.000 over a three year period and provided that his tax has already been paid or prepaid. Therefore, an investor who has already acquired an immovable property with a minimum value of €500.00 during the last three years, before applying for citizenship, a further investment of €1.5 million, totaling to €2 million, can give the applicant automatic right to apply for citizenship.
The applicant should have made 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 as from the date of the naturalization.
In addition, the applicant must fulfill the following terms and conditions. Apart from the clean criminal record, the applicant must possess a permanent residency in the Republic of Cyprus with a minimum value of €500.000, plus V.A.T. Finally, the applicant, prior to his naturalization as a Cypriot citizen, must hold a Residence Permit in Cyprus.
Please note that in case where a marriage between spouses has not been officially registered, then, they can register their marriage at a City Hall (Municipality) of one of Cyprus cities. Alternatively, they can get married in church without state registration of their marriage. The certificate of marriage registered and certified by Orthodox Church of Cyprus is sufficient and it is legally accepted in the Republic of Cyprus as well as a common law marriage registered at a municipality. Therefore, this couple needs only an investment of €2 million Euros. Other dependant family members – spouse and minor children – and even financially dependant adult children or students under the age of 28 can obtain Citizenship of the Republic of Cyprus. Furthermore, the parents of an investor may also qualify to apply for a Cypriot citizenship when they own a residential property in Cyprus of a value at least €500.000. In such case, they will not need to make the investment of the € 2 million.
Once the investment has been completed, the applicant or applicants described above can apply for the Citizenship and this can be obtained in a maximum period of three months. Besides, such an investor acquires the voting right in the Republic of Cyprus and he can live and work anywhere in the European Union.
The Cyprus passport is similar to the passports of Germany, Spain, France or any other EU country. Applicants are not required to continually live in Cyprus before or after the approval of the citizenship. Thus, the Cyprus passport is a full EU passport and once citizenship is granted the applicant can live, work or study in any of the member countries of the European Union. Additionally, this means visa free travel to more than 160 countries in the world, including the USA, Canada and most countries in North, Central and South America and the Middle East.
On the other hand, I must emphasize that in case the non-Cypriot investor is willing to proceed with the Permanent Resident only and is not interested to obtain immediately the Cyprus Citizenship, then the investment required to be made may not exceed the market value of €300.000 in real estate, i.e. residential property. In such a case, the investor can stay in Cyprus for a period of at least 7 years in which case he can subsequently apply for the citizenship. The rules in the interview are very flexible and the applicant is not required to pass Greek Language proficiency test or be examined in History of Cyprus as a condition to obtain citizenship of Cyprus. Besides, the legislator in Cyprus allows the applicant to have citizenship of the Republic as the second citizenship.
I would aver that the revised criteria and the latest amendments give us courage to proceed and they are most illuminating from my experience the last decade because the investments can be both beneficial to the citizens of the Republic of Cyprus as well as to the investors who can gain access to Europe and at the same time to enjoy a good lifestyle in Cyprus which is famous for its climate, the hospitality of the people and the low crime level. The particular investments can be made either personally or through a company duly registered in Cyprus. Furthermore the important element to remember remains that the investment must have been made during the period of three years prior to the date of submitting the application and must be kept for an extra period of at least three years after naturalization. The latest amendments are valid from now but applications pending and filed with the old provisions will be examined with the terms and conditions of the old scheme. Furthermore because of the economic crisis in Cyprus, the investor can be in a stronger bargaining position which means that he may get a better deal provided of course that he will ask a professional opinion, to appoint a surveyor for an independent view regarding the real value of the property and his Lawyers will make a full investigation for any encumbrances or the issuing of the title deeds.
N.B. In order to write this article we relied a lot on the Scheme for Naturalisation of investors in Cyprus by exception on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002-2015. Please note that any comments, opinions or conclusions expressed have an informative character and this is an article according to our search and we do not accept any legal liability relying exclusively on this article. I would like to thank our trainee Lawyer Mr Panos Polycarpou for his interest and his search on the above matter.
YIANNOS G. MYLONAS, Member of the Cyprus Bar Association, written on 19/10/2016.
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