Cyprus is experiencing a solid economic recovery and growth is expected to remain robust. The Cypriot economy is predicted to grow at a rate of 2% per year in years to 2021, according to IMF`s World Economic Outlook (WEO) for April 2016. Preliminary estimates for GDP growth in 2016 are 2.8%, one of the highest among the 28 European Union Member States.
Attracting foreign direct investment and encouraging the use of Cyprus by High Net Worth Individuals is at the heart of Cyprus' development strategy because it represents a key driver for economic growth. In line with this policy, the Cyprus government introduced two schemes for granting foreign investors Cypriot Citizenship and Immigration Permit to Cyprus in early 2013.
In the last quarter of 2016, the government amended the criteria for Cypriot Citizenship-by-Investment programme. The amount necessary for foreign investors to secure a Cypriot passport has effectively been reduced to €2 million for persons investing in either: real estate developments and infrastructure; Cypriot businesses and companies; financial assets in Cypriot businesses or organisations; or any combination of these investments, provided that the total investment amounts to at least €2 million.
This programme grants a Cypriot passport and EU citizenship – therefore bestowing the freedom to work, travel, study and live anywhere within the EU – within just three months, and the investment can be reduced down to just €500,000 after three years. The investor's spouse or partner may acquire Cypriot citizenship. Their application may be filed simultaneously. Dependent children up to the age of 18, students up to the age of 28, and the investor's parents may also apply after the investor has acquired Cypriot citizenship.
It is also possible for non-Cypriots to secure permanent residency in Cyprus through investment of just €300,000 in newly built real estate. The permanent residency visa is valid for life and covers the whole family – including the parents and any dependent children up to the age of 25. A company of which the main applicant and spouse are the beneficial owners may also make the investment. The permanent residency visa can be granted within two months and offers ease of travel throughout the EU. Just one visit to Cyprus by all family members every two years is required to maintain the visa.
To further entice corporate executives and high net worth individuals, significant exemptions have been brought into place for non-domiciled individuals taking up residence in Cyprus. These include no tax on dividends and interest, as well as a 50% exemption on income from employment in Cyprus of a person who was not previously resident in Cyprus. The exemption applies for ten years, provided that the income from employment in Cyprus exceeds €100,000 per annum.
So what will you find when you get here? Cyprus combines a business friendly environment and advanced infrastructure, with a high quality of life, allowing investors and their families to enjoy the best of both worlds. Ease of doing business, safety, stability, culture, year-round sunshine and beautiful scenery make Cyprus one of the most attractive destinations in the European Union for both living and doing business.
The island was ranked as the fifth best relocation destination worldwide by the 2013 Knight Frank Global Lifestyle Review, while it ranked Limassol, the second biggest city in Cyprus, the fourth best retirement destination globally in 2016.
Cyprus is also one of the safest countries in the world. According to a ValuePenguin ranking that analysed seven different data categories (population, CO2 emissions, life expectancy, the number of police personnel per 100,000 people, thefts, assaults and traffic deaths), Cyprus was the fifth safest place to live of 107 different nations worldwide. Only Switzerland, Singapore, Spain, and Japan scored higher. And as a member of the wider EU and Eurozone community, Cyprus ensures safety and stability for investors, while also offering them market access to more than 500 million EU citizens.
But if your horizons lie elsewhere, Cyprus Citizenship entitles you to live or study in all EU member states and to travel visa-free to any of the EU-member states plus Switzerland, Liechtenstein, Norway and Iceland, as well as to almost 160 countries worldwide. Citizenship also allows you to maintain dual citizenship and you are not obliged to reside in Cyprus in order to acquire it.
Perhaps the most compelling evidence for the attractions of a Cyprus passport can be found in the stats. There have been more than 2,000 successful applications over the last three years, which have brought more than €3 billion into the Cyprus economy. Applicants were – and still are – mostly from Russia, Ukraine and other CIS countries, the Middle East and China.
Property sales to the overseas (non-Cypriot) market have been running at about 30% of total property sales in Cyprus since 2000. According to the latest figures, property sales to overseas buyers during February 2017 rose 53% compared to the same month last year with 113 contracts of sale deposited compared with 74 in February 2016. Sales in Limassol showed a 124% increase, with a 67% increase in Larnaca and a 43% increase in Paphos.
If you are considering taking advantage of the citizenship or residency programmes that Cyprus has to offer, Sovereign Trust (Cyprus) can be of assistance. We will assist with:
- Examining an applicant's specific circumstances to establish the most effective way to satisfy the application criteria;
- Identifying the best available options for property investment;
- Providing a legal overview of the purchase agreement and/or other relevant documents;
- Performing due diligence on the real estate property;
- Assessing the tax implications of an investment;
- Setting up of a corporate vehicle to hold the investments;
- Preparing all required documents for an application;
- Monitoring the status of the application and briefing the investor on progress;
- Obtaining, when citizenship has been granted, Cyprus passports and identity cards for eligible family members.
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.