Benefits of the Cyprus Investment Programme
One of the main objectives of the economic policy of the Republic of Cyprus is to further encourage Foreign Direct Investment and to attract high net worth individuals to settle and do business in Cyprus.
In 2014 Cyprus was ranked the fifth-best relocation destination in the world by an international lifestyle review prepared by a leading independent global real estate consultancy firm. Cyprus was the only European location alongside Switzerland to make it into the top five – ahead of London, Madrid and Monaco. Coupled with what most international tax advisers agree is the most favourable onshore personal tax regime in the world, Cyprus provides an attractive destination for investment-based immigration.
The immigration policy and legal framework in Cyprus enable EU and non-EU applicants to obtain Cypriot citizenship on an expedited basis. There are a number of reasons that Cyprus’s citizenship by investment (CBI) programme is considered to be the most attractive in Europe, and includes the following:
- Cyprus does not require applicants to live on the island prior, during or after the application process, unlike all other EU countries whose citizenship programmes impose some form of residency requirement;
- The examination of the application process takes approx. six to eight months. As a result, the Cyprus CBI programme is currently the fastest route to EU citizenship;
- The application process is simple and straightforward with no requirements like medical tests and no language requirements;
- The Cyprus CBI programme is one of the few EU-approved programmes.
The Government of Cyprus has established and revised the “Cyprus Investment Programme” on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002-2019, with specific incentives, terms and conditions and control procedures in order to prevent abuse.
On the basis of the Programme, a non-Cypriot citizen may apply for the acquisition of the Cypriot citizenship through naturalization by exception, if he/she fulfils the financial criterion A.1 and one of the financial criteria A.2-A.5, either personally or through a company/companies in which he/she participates as a shareholder, in proportion to his/her holding percentage, or through investments done by his/her spouse or jointly with the spouse or even as a high-ranking senior manager of a company/companies that fulfils the financial criterion A.1 and one of the financial criteria A.2-A.5.
The applicant should have made the necessary investments during the 3 (three) years preceding the date of the application and must retain the said investments for a period of at least 5 (five) years as from the date of the naturalization. It is understood that the investor may replace the investment during the said period, provided that he/she has obtained beforehand an approval by the Ministry of Finance. After the lapse of this five-year period, the applicant can sell all his investments, regardless of under which category he has made the investment, but retain for life a residential property of a minimum value of EUR500,000.
Α. FINANCIAL CRITERIA
Α.1 Donation to the Research and Innovation Foundation and the Cyprus Land Development Corporation:
- The applicant must have donated at least EUR75.000 to the Research and Innovation Foundation. It is noted that if the applicant wishes to donate an amount higher than the minimum of EUR75.000, this additional amount can be used for purposes of supplementing the total amount of the investment made on the basis of the criteria A.2-A.5.
Furthermore, the aforementioned obligation is lifted, if the applicant has invested at least EUR75.000 in a certified innovative enterprise (i.e. an enterprise that had acquired the relevant certificate by the Ministry of Finance) or a certified social enterprise.In addition, the obligation is lifted, if the applicant has made an investment under the criterion A.3 (Purchase or Establishment or Participation in Cypriot Companies or Businesses) of a total amount equal to the 20% of the required investment amount (i.e. EUR400.000) of the abovementioned criterion A.3 in a company whose operations fall within the primary sector of the economy, or the secondary sector of the economy (excluding constructions), or in the sectors of research and development, education, health and renewable energy sources.
- The applicant must have donated at least EUR75.000 to the Cyprus Land Development Corporation for the financing of housing schemes for affordable housing, but also for the materialization of other housing schemes/measures. It is noted that if the applicant wishes to donate an amount higher than the minimum of EUR75.000, this additional amount can be used for purposes of supplementing the total amount of the investment made on the basis of the criteria A.2-A.5.
A.2 Investment in real estate, land development and infrastructure projects:
The applicant must have made an investment of at least EUR2 million for the purchase or construction of buildings or for the construction of other land development projects (residential or commercial developments, developments in the tourism sector) or other infrastructure projects. It is noted that investment in land under development is included in this criterion, provided that an investment plan for the development of the purchased land will be included in the application. It is understood that investment in land that is situated in a building zone of zero development, is excluded.
A.3 Purchase or Establishment or Participation in Cypriot Companies or Businesses:
The applicant must have invested at least EUR2,0 million for the purchase or participation in companies or organizations established and operating in the Republic of Cyprus with investment costs of. The invested funds shall be channelled towards the financing of the investment objectives of these companies exclusively in Cyprus, based on a specific investment plan. Moreover, investments in the shipping sector are eligible on the basis of measurable criteria that will be determined jointly by the Ministry of Finance and the Shipping Deputy Ministry.
The applications shall be evaluated to verify that the companies or organizations have proven physical presence in Cyprus, with significant activity and turnover and employ at least 5 (five) Cypriot citizens or citizens of European Union member-states. The minimum number of employees shall increase, if more than one applicant invests simultaneously or almost simultaneously in the same business or company.
A.4 Investment in Alternative Investment Funds (AIFs) or Registered Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by the Cyprus Securities and Exchange Commission:
The applicant should have bought units of at least EUR2,0 million from Alternative Investment Funds (AIF) or Registered Alternative Investment Funds (RAIF) established in the Republic of Cyprus, licensed/registered and supervised by the Cyprus Securities and Exchange Commission (CySEC) and whose investments are made exclusively in the Republic of Cyprus, in investments that meet the criteria of this Scheme or in areas approved by the Minister of Finance. It is permitted for these AIFs or RAIFs to invest in secondary market stock-market values of the Cyprus Stock Exchange an amount that does not exceed the EUR200.000.
In order to confirm that the investments that meet the criteria of the current Programme will be retained for at least five years, the manager or the auditor of the Fund shall inform in writing and on an annual basis, the Ministries of Finance and Interior with reference to the value of the initial investment.
The purchase of financial assets of Cypriot companies or organizations of at least EUR2 million, such as bonds, bills and securities, issued with the approval of the CySEC, by companies that have proven physical presence and substantial economic activity in the Republic of Cyprus, and have as a purpose the financing of the investment plans of these companies or organizations exclusively in Cyprus, based on an investment plan, fall under this criterion. It is noted that the purchase by an AIF or RAIF of units of other AIFs or RAIFs is not considered eligible.
A.5 Combination of the aforementioned investments:
The applicant may proceed with a combination of the above investments, provided that the total investment will amount up to at least EUR2 million.