Cyprus: The Most Frequently Asked Questions (FAQs) On The Cyprus Citizenship By Investment Program

Last Updated: 22 August 2016
Article by Charles Savva

Cyprus has 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.  With at least 320 days of sunshine a year, Cyprus was classified the sunniest European location.

One of the most popular routes to obtaining Cyprus residency is through the Cypriot citizenship by investment program.

The minimum investment threshold for the Cyprus Citizenship Program is €2.5 million, with various investment options available including; residential real estate, immovable property, interest bearing government bonds, creation of Cypriot business, fixed deposits or mix of any of the above.  

Cyprus ranked highly because of its favourable tax regime for new residents, particularly high net worth individuals. It is also an attractive financial centre. Cyprus is situated in a 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, where the newly introduced "non-domicile" regime results in zero taxation of worldwide dividends and interest income, for a period of 17 years.

Below are frequently asked questions (FAQs), regarding the Cyprus Citizenship by Investment program, clarifying the main provisions of this program. 

(1) How are Cyprus government bonds purchased for the purpose of supporting an application for Cypriot Citizenship by Investment?

It is possible to purchase Cyprus government bonds/debentures directly from the Ministry of Finance (MoF) or through the Cyprus Stock Exchange.

For the purposes of investment in government bonds as a means of obtaining Cyprus Citizenship by Investment, it has been decided that from the 1st of August 2014 onwards, only the bonds purchased from the primary market (i.e. directly from the Ministry of Finance, Public Debt Management Office through the Cyprus Stock Exchange) are eligible. The minimum lock-in period for investment purposes is three years.

The applicant is able to purchase Cyprus government bonds between the 1st and 20th of each month. Payment is remitted to the bank account of the Central Bank of Cyprus. The application for purchase of government bonds can be processed by a power of attorney issued in the name of the applicant's local advisor (i.e. lawyer).  

(2) Does a Permanent Residency Permit (PRP) help towards obtaining Citizenship?

A holder of a PRP who eventually wishes to be granted Citizenship has an advantage in that he may legally reside in the Republic for five consecutive years prior to filing an application for Citizenship by naturalisation in the traditional way (as opposed to the Citizenship by Investment route). This is the only advantage afforded even though many persons opt to obtain the PRP first, and subsequently proceed with an application for Citizenship by Investment, especially when they intend to reside in the Republic with their families.  

(3) How long is the examination period for the Citizenship application?

Upon filing of a completed Citizenship application, it usually takes between two to three months before a decision is made by the Ministry of Interior.  

(4) Is it a requirement that an applicant must live in Cyprus prior to or after Citizenship being granted?

There are no residency prerequisites either prior to filing the Citizenship application or following the granting of Citizenship. This is one of the many benefits of the Cypriot Citizenship by Investment program, when compared to other EU Citizenships programs.

(5) When does the successful applicant receive their Cyprus passport?

Once citizenship is granted, the applicant can receive a Cyprus passport on the same day simultaneously with the issuance of the naturalization certificate, if done in person in Cyprus. On that day, the applicant issues a sworn statement that he accepts citizenship and can then obtain the Cypriot passport issued by the Ministry of Interior, on payment of acceleration fees of €120. Alternatively, the applicant may obtain the Cyprus passport any time after the naturalisation certificate is issued, from the Citizens Service Centers at a lower cost of €70, but it could take up to two weeks to have the passport issued in this case. A Cypriot passport will also be issued to the Investor's spouse and dependent children up to the age of 27, provided they are in full-time education.  

(6) What does "acquisition of businesses or companies based in Cyprus" mean precisely?

This criterion pertains to a €5m/€2.5m (depending on whether the application is submitted as a group or individual) investment in the participation rights or shares of a Cyprus company(ies) that maintains offices and operates in Cyprus, employing a minimum of five Cypriot citizens, for a period of three years.

An eligible company/business can also be one that was acquired by the Investor up to three years prior to filing his citizenship application.

In all cases, the Investor must demonstrate the correlation with the companies or businesses purchased. This requires the investor to continue to be an owner or be directly involved in the operations of the businesses acquired.

(7) How many Citizenship by Investment applications have been submitted to date?

Since 2013, there have been over 2,000 successful applicants under the Cypriot Citizenship by Investment program, with the Minister of Interior, Mr Socrates Hasikos, reporting (November 2015) that in excess of  €3 billion in investment has been generated.  

(8) Does the Citizenship by Investment scheme have an expiry date?

As at present, no expiry term has been designated for the program.  

(9) One of the financial criteria requires a fixed deposit of minimum €5 million in banks operating in Cyprus. Which are the eligible banks?

The eligible banks are local banks and subsidiaries of foreign banks in Cyprus. The Central Bank of Cyprus maintains a list of these eligible banks which can be found at http://www.centralbank.gov.cy/nqcontent.cfm?a_id=8154=en. Excluded from this list are branches of foreign banks, in Cyprus. It is possible to deposit the investment amount in several of the eligible banks, and it is also possible for the amount to be in a currency other than Euro, provided the total value of the investment is the equivalent of €5 million. The interest rate applied to the fixed deposit depends on the terms of offer of each eligible bank. The beneficiary of the interest accrued is the depositor/applicant.  

(10) In regards to satisfying the financial criterion of investment into real estate, are real estate properties purchased by the applicant in the past eligible?

Any property purchased three years prior to filing the Citizenship application is eligible.  Additional properties may be purchased in order to meet the total sum required for this investment criterion, namely €5 million (or €2.5 in the case of a group application).  

(11) Are re-sale properties eligible for the real estate investment criterion and/or the private residence requirement?

Investors can purchase resale properties, where it should be noted VAT is not applicable, for both purposes.    

(12) How can the Investor maintain Citizenship granted?

To maintain Cyprus Citizenship acquired via the Investment Program, the investor must always honor the conditions on which citizenship was granted. This includes maintaining possession of a residential property in Cyprus of a minimum value of €500,000. The relevant investment (i.e. real estate, government bonds, fixed deposit account etc.) can only be disposed of/liquidated after the expiration of the three year period.  

(13) Does Cyprus allow dual citizenship?

Yes, it does, which is very beneficial for many reasons, including:

  • Cypriot citizens enjoy the freedom to live, work and travel throughout Europe;
  • Cypriot passport holders are entitled to travel visa-free to more than 157 countries;
  • Cypriot passport holders can quickly and cost effectively obtain visas for other countries;
  • Dual citizenship offers an effective tool for international tax planning and provides financial privacy.  

(14) 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 residential property of the same or higher value than €500,000 at any time.  

(15) Are there any acceptable exceptions to the requirement to acquire and maintain residential property of €500,000?

Where the applicant invests solely in a residential property (can be one or more properties) valued at €5 million and over (or €2.5 million and over in the case of a group application) as a means to satisfying the financial criterion for the Cyprus Citizenship by Investment route, then it is not necessary for the Investor to acquire an additional residential property valued at €500,000, provided one of the investment properties meets the requirements of the residential property, which must be maintained throughout the citizenship. In the event the deemed residential property is sold after the three year lock-in period, the investor would be required to purchase and maintain another residential property of at least €500,000 to replace the initial property(ies).  

(16) What are the government fees for submitting an application?

The fee upon submission of the citizenship application is €2,000 per applicant. On the issuance of the naturalisation certificate an additional €5,000 is payable, per applicant.

(17) Are medical tests required or a health insurance prior to applying for a citizenship?

No medical tests are required prior to applying for Cypriot Citizenship by Investment. Obtaining health insurance is not obligatory for the applicant.  

(18) Where an applicant for a Cypriot Citizenship by Investment is the holder of a European permanent residency, is it required for the residency to be revoked prior to applying for Citizenship in Cyprus?

No, it is not required for the European permanent residency of any country to be revoked in order to apply for Citizenship in Cyprus.  

(19) In case an applicant already owns residential premises in Cyprus, will he still be required to purchase an additional permanent residence of at least €500,000 for the purposes of the Citizenship by Investment application?

Provided the existing residential premises owned by the applicant were purchased for a value of at least €500,000, then it will not be required to purchase an additional permanent residence. If however, the acquisition price at the time of the purchase was below €500,000, then the applicant will be required to purchase an additional residential property(ies) to satisfy the €500,000 residential property criterion.  

(20) Can an unmarried couple simultaneously file a Cyprus Citizenship by Investment application where the investment will be made solely by one of them as the main applicant and the unmarried partner will be considered the spouse?

No, a couple is required to be married before they can simultaneously file a Cyprus Citizenship by Investment application as spouses. It is however possible to approach such scenario in two-steps as follows; one partner to file the citizenship application as the main applicant, and once the couple is married, and subsequent to the main applicant's successful application, the new spouse to file an application.  In such cases, no additional investment will be required by the new applicant spouse in order to obtain citizenship.

Our firm has long established itself as a leader in the field of immigration services, and we are 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. 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 csavva@cccyprus.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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Charles Savva
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions