Cyprus: Cyprus Citizenship By Investment - The Most Attractive Program In Europe

Last Updated: 2 March 2015
Article by Charles Savva

Europe has long established itself as the most sought after region in terms of high net worth immigration, accounting for over half of the total number of global citizenship applications, with the Caribbean in second place, followed by North America in third. Also noteworthy, are recent studies conducted by global immigration experts, ranking the Cyprus Citizenship by Investment program among the "top ten best in the world".

Cyprus has recently been ranked the 5th best relocation destination in the world by an international lifestyle review (source: 2014 report prepared by Knight Frank, a leading independent, global real estate consultancy firm). Ranked by key business and leisure indicators, Cyprus was the only European country alongside Switzerland to make it into the top five – ahead of London, Madrid and Monaco. Cyprus ranked highly because of its favourable tax regime for new residents, particularly high net worth individuals. With at least 320 days of sunshine a year, Cyprus was classified the sunniest European location.

Certain changes to the Cypriot immigration policy and legal framework now enable non-EU applicants to obtain Cypriot citizenship on an expedited basis. Cyprus Citizenship by Investment is available to foreign investors pursuant to subsection (2) of section 111A of the Civil Registry Laws of 2002-2013 and the decision of the Ministry of Councils in September 2014, as amended.

The Cyprus government has formulated a "fast-track" citizenship scheme aimed at high net worth individuals, investors and entrepreneurs. This allows the successful applicant and their family to hold a Cypriot passport and enjoy all the benefits of a Cyprus and EU National.

Why is the Cyprus Citizenship by Investment program considered to be the most attractive in Europe? Some of the main reasons include the following:

  1. No requirement to make a donation to the local government, unlike the Maltese citizenship scheme which requires a donation of EUR 650,000.
  2. Applicants are not required to live on the island prior or during the application, or even after citizenship has been granted, unlike many other EU countries, including Malta, which requires applicants to physically reside in Malta one year prior to filing an application.
  3. Successful applicants receive a Cypriot passport within 3 to 4 months of filing an application, being by far the fastest route to EU Citizenship.

Why become a Cyprus citizen? Some of the main advantages of Cypriot Citizenship include the following:

  • Freely travel, reside and work within the EU. An entire family can obtain Cyprus Citizenship i.e. spouse of applicant, children under 18 years, and adult dependents (ages 18 to 28).
  • Establishment and free movement of services - individual citizens and their companies can offer services within the EU Member States without any obstacles.
  • Transfer funds between EU Member States, purchase of property in any preferred EU Member State, and invest in any type of activities.
  • All goods produced in EU Member States can be freely transferred between Member States.
  • No requirement to physically reside in Cyprus either before the filing of an application or after obtaining Cypriot Citizenship.
  • Cyprus is an attractive financial centre due to its highly favourable tax system and strategic location at the crossroads of three continents – Europe, Africa and Asia. The Cypriot taxation system is consistently voted by EU tax professionals as being the most attractive in Europe.
  • Cyprus offers a high standard of living with access to reputable private schools, private medical facilities and among the lowest crime rates within the EU.
  • No visa required for travel within the EU; no visa required for travel to over 50 non EU countries.

The citizenship by investment program in Cyprus enables foreign citizens to apply for a Cyprus citizenship provided that they:

  1. Purchase and maintain a privately owned residence in Cyprus, the value of which must be at least €500,000 excluding VAT.
  2. Have a clean criminal record from the country of origin and/or residence.
  3. Confirm that the applicant's name is not included in the list of persons whose property is ordered to be frozen by the EU.

Moreover, the applicant is required to meet one of the following key financial criteria in order to apply for the Cyprus citizenship:

  1. Deposits in banks operating in Cyprus, for a minimum amount of €5 million, and fixed for a three-year period. The list of eligible banks includes local banks and subsidiaries of foreign banks operating in Cyprus, but excludes branches; or
  2. Direct investments in Cyprus for a minimum amount of €5 million in any of the following ways:

    • Purchase of Cyprus Government Bonds with a minimum maturity of three years;
    • Investment in bonds or debentures registered and issued by Cyprus companies or businesses or organizations, with a minimum maturity of three years;
    • Investment in real estate development projects including housing or commercial development projects, tourist industry developments or other infrastructure projects (excluding undeveloped land);
    • Purchase, incorporation or participation in Cyprus businesses and companies that are based and operate in Cyprus. Such companies are required to have a physical presence in Cyprus and to employ at least five Cypriot citizens. This criterion includes share participation in a Cyprus bank, and also applies to foreign investors who have been holding shares (directly or indirectly) in Cyprus companies, or have been appointed as Executive Managers therein for three years prior to their application for Citizenship, earning remuneration resulting in tax revenue for the Republic of at least €100,000 and provided they maintain their investment in the said companies for another three years from the date the Citizenship is granted; or
  3. Combination of any of the criteria listed in the above two schemes; or
  4. Major Collective Investments in any of the Direct Investments listed above in the amount of €2.5 million per investor, where the total value of the major collective investment is at least €12.5 million; or
  5. Impaired Deposits in Popular (Laiki) Bank - the applicant has impaired deposits amounting to a minimum of €3 million. In case of impaired deposits of less than €3 million, the applicant can proceed to make additional investment(s) based on any of the above mentioned criteria.

Savva & Associates are leaders in the area of Immigration Services in Cyprus, and well positioned to assist clients with the preparation and filing of a Citizenship Application. We are frequently engaged by some of the world's largest and most reputable international law firms, accounting firms and family offices.

Further we are well positioned to provide an extended scope of legal services and support to foreign investors through our affiliate law firm SK LAW GROUP.

Our team of highly experienced professionals can advise you further on obtaining Cyprus Citizenship by Investment or any other residency permit, 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.

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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