Financial Criteria of Investments for Cyprus Citizenship

A. Grant of the Cypriot Citizenship to Foreign Investors

The Government of Cyprus in an effort to enhance the competitiveness of Cyprus and to provide even more attractive incentives to Foreign Investors / Entrepreneurs, implemented major changes in the “Scheme for Naturalization of Investors in Cyprus by exception” (on the basis of the Civil Registry Laws 2002-2015).

The new financial criteria introduced are even more favourable than before with the minimum necessary amount of investment having been reduced from €2.5 million to €2 million.

A non-Cypriot citizen who satisfies one of the following economic criteria, either personally or through company/companies where he/she participates as a shareholder, either through investment made by his/her spouse or they have made together, either as a senior executive of company/companies that meet one of the financial criteria, may apply for the acquisition of Cyprus Citizenship by Naturalization by exception.

B. New Financial Criteria

A non-Cypriot citizen will be eligible to obtain Cypriot Citizenship if one of the following economic criteria is met:

 Investing in Real Estate Developments and Infrastructure:

The applicant should make an investment of at least €2 million for the purchase or construction of immovable property whether residential or commercial, and whether related to the tourism sector or to other infrastructure.

 Combination of the Aforementioned Investments:

The applicant may make a combination of the above investments, provided that the total investment will amount to at least €2 million.
Under this criterion, the investor may also invest in government bonds of Cyprus for the amount up to €500.000, which will be issued for this purpose by the Public Debt Management Office of the Ministry of Finance, for a period of at least three (3) years.

C. Terms and Conditions

 Clean Criminal Record: The applicant should have clean criminal record.

 Residential Property in the Republic of Cyprus:

The applicant must hold a permanent privately owned residence in the Republic of Cyprus, the purchase price of which must be at least €500.000 plus VAT.
It is noted that members of the same family, which apply separately as investors, can collectively acquire a residence, provided that the total value of this home-property covers the amount of €500.000 per each applicant.

 Residency in Cyprus:

The applicant, before the naturalization as Cypriot Citizen, must hold a residency permit in the Republic of Cyprus.
In case the applicant is not already a holder of a residency permit, may submit an application for an immigration permit at the same time while submitting an application for naturalization.
The investment should be made in a building land and there should be an investment plan for its development, while the purchase of land in zero growth zones is excluded.

 Purchase or Incorporation or Participation in Cypriot Businesses and Companies:

The applicant should purchase, incorporate or participate in companies established and operating in the Republic of Cyprus with investment costs of at least €2 million. These invested funds will be channelled to finance the investment objectives of the Companies, according to their business plan.

Moreover, the companies must have hysical presence in Cyprus, with significant activity and turnover, and must employ at least five (5) Cypriot or European citizens.

 Investing in Cyprus Alternative Investment Funds (AIF’s) or Financial Assets or Cypriot Organizations Licensed by the Cyprus Securities and Exchange Commission (CYSEC).

The applicant should invest in units of at least €2 million of AIF’s established, licensed and supervised in Cyprus by “CYSEC”. Such investments should be made exclusively in Cyprus and should meet the criteria of this scheme and be approved by the Minister of Finance.
Acquisition of financial assets in Cypriot businesses or organizations of at least €2 million, such as bonds, bills and securities issued by companies that have demonstrated physical presence and substantial economic activity in Cyprus, should be maintained for a period of three (3) years.

D. Key highlights of the Cyprus Citizenship by Investment program.

 A straightforward route to EU citizenship.
 No requirement to make a donation to the local government.
 No language requirement, medical test or interview.
 All the privileges of an EU citizen. EU citizens enjoy the right to reside, work, do business, study and travel freely within the EU.
 Protection by EU legislation and regulations.
 Visa-free travel to more than 150 countries in the world, including all the European Union countries, Canada and Australia amongst others.
 Wide choice of investment means the ability to invest directly in real estate or other assets of one’s choice or to combine allowable investments.
 Combination of tax incentives for investors who were granted the citizenship.
 By obtaining Cyprus citizenship and passport one does not automatically become tax resident of Cyprus.
 The Cypriot personal income tax regime, through the introduction of the “non-domicile” concept, is now widely considered as one of the most attractive onshore personal income tax regime in the world.
 Comprehensive double tax treaties network that offers an effective tool for international tax planning.
 Strategic geographical location, forming a bridge between the EU, the Middle East and North Africa with direct access to the Mediterranean Sea.

Source: Baker Tilly