Cyprus: Super Wealthy Opt For Second Citizenship

Last Updated: 28 July 2014
Article by Charles Savva

The new trend of ultra high net worth (UHNW) individuals to obtain a second citizenship is showcased with prominent examples by the likes of Gerard Depardieu, becoming from French citizen to Russian, and Tina Turner, from Swiss citizen to US in 2013.

The term "high net worth individuals", refers to individuals with assets valued between $5 and $50 million, with the "ultra high" ones being those exceeding the $30 million threshold.

A recent joint study titled "A Shrinking World: Global Citizenship for UHNW Individuals" conducted by Wealth-X, a leading UHNW prospecting and intelligence firm, and Arton Capital, global citizenship experts, offers a closer analysis of this trend, comparing various investment immigration schemes and exploring the reasons driving UHNW individuals to change citizenships or apply for a second one.

There are compelling reasons for UHNW individuals to seek a second citizenship, such as the need for greater stability and security than that offered in their current countries of residency, tax efficiency, ease of travel across Europe and the rest of the world, higher standard of living, increased options for their children's education as well as alternative investment opportunities.

The study reveals that 90% of UHNW individuals are married with an average of two children, comprising 800,000 of the world's population. This means, that the benefits of the immigration investor programs offered are not only considered by the UHNW individual but also their dependent family members as well.

Billionaires account for 1% of the world's UHNW individuals with a growing prediction of nearly 80% by 2020, meaning 1,700 more billionaires are expected to appear. These individuals hold 23% of the world's wealth, worth $6.5 trillion and are the ones aspiring to gain the most from a global citizenship.

An important note which the study makes is that within the next 30 years the total wealth being transferred to the next generation is expected to exceed $16 trillion with France, Hong Kong and Italy foreseen to transfer the most wealth.

Remarkably, the average net worth of individuals who apply for a second citizenship is over $205 million, which surpasses 47% of the global average for UHNW individuals of $139 million. A significant 32% of their net worth is in liquid assets, which equals to over $66 million per individual and is nearly double the global average of $35 million.

Another noteworthy fact is that, 60% of second citizenship applicants are from the Middle East, which is not surprising given it has the highest proportion of billionaires in the world (40% of global UHNWs), followed by Asia, the new frontier with ultra wealthy Chinese and Indian nationals.

Europe is the most popular region, accounting for over half of the total number of global citizenship applications, with the Caribbean in second place, ahead of North America in third.

The European citizenship programs are becoming more popular due to the prime benefit of being able to freely travel within the EU and take advantage of a stable economic environment, the EU member state status, an efficient taxation system as well as good infrastructure. The desire for flexibility and mobility to meet the demands of globalisation is driving many investors into citizenship programs with the number of "passport shoppers" becoming double in the past five years.

The above mentioned study ranked the Cyprus citizenship investment scheme among the "top ten best in the world". Certain changes to the Cypriot immigration policy and legal framework now enable non-EU applicants to obtain Cypriot citizenship on an expedited basis. It is widely considered that the Cyprus citizenship scheme is now the most attractive in Europe, since unlike the Maltese scheme it does not require any donation to be made to the local government (in the case of Malta, this is EUR 650,000). Moreover, unlike many other EU countries, including Malta, Cyprus does not require applicants to live on the island prior to or during the application, or even after the citizenship has been granted. In Cyprus the cost of the fast track scheme was reduced to a minimum investment of €2.5 million in real estate on the island, for collective real estate investment programs, plus an investment of at least €500,000 in residential premises.

The Caribbean is another popular 'citizenship' destination, due to the lower barriers for entering many of its countries, such as Antigua and Dominica, where physical residency requirements are very low. Currently, the cheapest deal for citizenship is on Dominica for an investment of $100,000 plus various fees, as well as an in-person interview on the island. However, actually obtaining a Dominican passport can take from 5-14 months.

Due to its taxation system the US holds a lower position within UHNW individual applicants, accounting for 1 in 7 applications made. On the other hand this shows that lifestyle factors also play an important role for global citizens other than just taxes.

Investor immigration programs (fast tracks) are very attractive to UHNW individuals, costing them as little as 0.5% of their liquid assets, or 0.1% of their net worth, and providing them with 100% positive benefits.

Our team of highly experienced professionals can advise you further on obtaining Cyprus Citizenship by investment, on the basis of your particular facts and circumstances. Please feel free to contact Charles Savva at c.savva@savvacyprus.com or Stella C. Koukounis at s.koukounis@sklawcyprus.com to discuss how we can be of assistance to you.

Please note that we are also able to assist with finding the right property matching your criteria, and ensure you are presented with only properties that are good value for money.

For further details you may also refer to the information and FAQ's provided on our website.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Charles Savva
 
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