IMPORTANT NOTICE: On the 13th of October 2020, the Council of Ministers has decided to suspend the Cyprus Investment Programme with effect from the 1st of November 2020 and until further notice. Any pending applications or applications filed by the 30th of October 2020 will be processed as per the relevant procedures.
On the 18st of August 2020, the Council of Ministers of Cyprus has updated the criteria for third-country nationals who wish to apply for Cypriot citizenship under the Cyprus Investment Programme (or ‘CIP’) on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002-2017.
The CIP was initiated to advance the goals of the Republic’s economic and fiscal policy. In the words of the Ministry of Interior: ” 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. Key factors that make Cyprus an attractive destination for investment, is the highly specialized human capital, the reliable legislative and regulatory framework, the stable tax system and the safety and stability conditions prevailing in the country.”
All third country (i.e. non-EU) nationals are eligible to obtain full Cypriot citizenship under the CIP scheme, provided they meet the specified criteria. The holder of the Cypriot passport may also benefit from the internal market, the opportunities and the stability of the European Union.
The programme’s benefits are particularly appealing for foreign investors as they entitle them to the following:
- The investor and his family can freely reside, work, study, have business in Cyprus, any of the EU-member states as well as in Switzerland, Liechtenstein, Norway and Iceland.
- Travel visa-free to more than 115 countries and with visa-on-arrival in more than 30 countries.
- Dual-citizenship is permitted. The investor may retain the citizenship of his/her country of origin.
- There is no requirement of physical residence in the country during or after the application procedure is initiated.
- Minimum investment required is €2 million (excluding VAT where VAT is applicable).
- No language proficiency test is required.
- Right to own property in an EU member-state.
- Fully transparent, fairly simple and relatively fast procedure.
Eligibility of the investor’s family to apply
The applicant’s spouse and any financially dependent minors (i.e. children below the age of 18) also have the right to apply for a Cypriot passport. The option is also available to any dependent children up to the age of 28 provided they are students in the process of obtaining their 1st degree and they are not married to another person. All the descendants of the persons who have obtained citizenship, may also be regarded as Cypriot and EU citizens.
The application for the spouse and minor children are submitted simultaneously with the Investor’s application. Dependent parents of the Investor also qualify for citizenship and they may also apply simultaneously provided each owns a property with a minimum value €500,000 + VAT or a share of €500,000 in a residential property of the main applicant.
The applicant must satisfy all of the conditions listed in section (A) below and meet at least one of the investment options set out in section (B):
A. Conditions for applying for Cyprus citizenship
The applicant must satisfy some conditions in order to be eligible for the fast-track procedure, namely:
- Possess a clean criminal record from the country of origin and/or Cyprus (should not be issued earlier than 6 months before the submission of documents). Applicants who have been sentenced or are under investigation for a serious criminal offence which carries a sentence of five years or more or for any other serious offence or offences involving moral obscenity cannot apply for the programme. In the event that a person has been sentenced in another country, the offence she/he has committed must be a criminal offence in Cyprus that carries a sentence of imprisonment.
- The name of the applicant must not appear on the list of persons with assets subject to a seizure order (‘frozen assets’) within the EU. Applicants who have been subjected to or are affiliated with any person or legal entity or organisation against which sanctions were imposed by the EU or the UN and these sanctions are still in force or were in force up to twelve months prior to the submission of the application, such as shareholders and high-ranking officials of such companies, are also excluded from the programme.
- Politically Exposed Persons (PEP) are permitted to apply provided they have not held public office in the 12 months preceding the application.
- Must privately own a residence in Cyprus and which must be declared as ‘permanent residence’. The property’s market value must be at least €500,000 (excluding V.A.T.) on the date of application. There is no need to reside in Cyprus either before the filing of the application or after obtaining the citizenship. If the property has been purchased up to three years prior to the application, it will count towards the required investment.
The applicant, prior to his/her naturalization as a Cypriot citizen must hold avalid Schengen visa and a residence permit in Cyprus for a period of at least six months and have not had a Citizenship application denied by any other European country. It is noted that all of the above also apply for the adult members of the family of the investor, who will apply for naturalization. In case the application for naturalization is rejected for any reason, the immigration permit, obtained in accordance with the provisions of this Decision, will be canceled immediately.
The applicant or the applicant’s family members must not have taken any actions which manifest that they accept/acknowledge/recognize in any way the illegal administration established in the areas not controlled by the Government of the Republic of Cyprus. They must not have any official post or position there and they must not have trespassed or in any way caused any damage to immovable property located in those areas that belong to another lawful owner.
B. Investment/financial criteria
Assuming the conditions in section (A) above are satisfied, to qualify for Cypriot citizenship the applicant must invest in Cyprus in one of the following ways:
- Investment in Real Estate
The applicant may invest in immovable property, land development or infrastructure projects.The investment must be at least €2 million for the purchase and/or construction and/or development of the said property or projects. It must be stressed out that if the investor wishes to invest in land under development, a business/development plan of the purchased property needs to be presented to the relevant Authorities for approval. The total investment of €2 million must include at least one residential property with a minimum value of €500.000 (excluding VAT). The residential property must always be kept as ‘permanent residence’ or, if sold, it must be replaced with an another residential property of equal or greater value (see criterion A(3) above). Investment in real estate situated in a no-building zone is not a qualified investment.
- Purchase or Incorporation of a Cyprus Company or participation in Cyprus businesses or Cyprus Companies.
The Applicant can invest at least €2 million in order to purchase, incorporate or participate in companies, that have physical presence and activities in Cyprus and employ at least five Cypriot or EU citizens who have been legally residing in Cyprus for a continuous period of at least 5 years prior to the application. The minimum number of employees increases where more than one applicant invests in the same company simultaneously or almost simultaneously. It is prohibited to create a development company and invest in its own development projects.
- Investment in alternative investment funds (AIFs) or financial assets of Cypriot businesses or organizations.
The Applicant can purchase financial assets of at least €2 million from organizations of alternative investment funds (AIFs), which are registered and whose activities are operated in the Republic of Cyprus and are licensed and supervised by the Cyprus Securities and Exchange Commission (the CySEC). Any other investments which are approved by the Ministry of Finance may qualify for the CIP. The manager or the auditor of the Fund is obliged to report to the relevant Ministries on an annual basis, that the initial investment amount is in place.
- Combination of the above
Applicants may opt for a combination of any of the above methods provided that the investments’ total value is at least €2 million. Within this criterion the applicant may purchase special government bonds of the Republic of Cyprus, up to €500.000, which will be issued by the Public Debt Management Office of the Ministry of Finance, on condition that the investor will retain these bonds for a three-year period. The characteristics and the terms of these special bonds will be determined by the General and Special Issue Terms of the Government Bonds of the Republic of Cyprus. Investments in government bonds through the secondary market are not considered eligible.
In addition to the investment, the applicant is required to make the following non-refundable contributions:
i) Donation of at least €100.000 to one of the following causes:
- the Research and Innovation Foundation; or
- the Service of Industry and Technology, in order to materialize targeted funding plans for small and very small businesses; or
- the Funds for Renewable Sources of Energy and Conservation of Energy; or
- the National Solidarity Fund,
ii) Donation of €100.000 to the Cyprus Land Development Corporation for the funding of affordable housing projects.
*Note: All payments made for the investments and the contributions listed above must derive from the applicant’s bank account or a company or companies of the investor based abroad. All payments need to be made to Cypriot financial institutions which are regulated by the Central Bank of Cyprus. Consequently, copies of bank remittances will have to be included in the application.
The entire procedure is quite practical as it does not involve any language requirements, medical tests or personal interviews.
The application (Form 127) is submitted to the Ministry of Interior with original supporting documentation (see section ‘Documentation’ below) along with the payment of the relevant fees per applicant. All the documents issued by a foreign authority should be translated either in Greek or in English and be duly certified (via apostille, if applicable). Our lawyers will carry out a pre-clearance check before submitting the application and paying the relevant fees.
If the Investor meets the criteria and conditions set out above, the application is approved by the Ministry of Interior. Approval fee is payable at this stage. The Ministry of Interior then forwards the application to the Council of Ministers for final approval.
Once the application is approved, a Permanent Residence (PR) card is issued. Owning a PR card for six months enables the holder to to complete the naturalisation process which involves the Civil Registry and Migration Department issuing the Certificate of Naturalisation. The Certificate must be signed by the applicant either in the presence of a Registrar of a Cypriot Court or a Consular at any Cypriot Consulate abroad within three months of receiving approval. Once everything is completed, the applicant is entitled to his/her passport which is issued within the next three months.
The average time for the completion of the process is approximately 3 months from the date of submission. It should be noted that the application submission date is the date on which the submission fees were paid.
The Council of Ministers has complete discretion to approve or reject a Citizenship Application.
The following documents are required to prove compliance with the specified criteria of the citizenship program:
- Certificate of Clean Criminal Record from the country of origin and the country of residence (if it differs).
- Due Diligence Report issued through an internationally accepted database ensured through a subscription (e.g. Wolrd Check, LexisNexis Diligence, Regulatory DataCorp Inc.etc.). The report must be dated no later than thirty days from the date of its submission.
- For the permanent residence property and any other real estate, land development or infrastructure projects investments in the Republic of Cyprus: (a) Contract of Sale, (b) Title Deeds/ Receipt for lodging the contract with the Lands and Surveys Department,(c) Receipts for paying the agreed purchase price, (d) Copy of the wire transfer in the Cypriot commercial banking institution in the name of the seller or the seller’s company and, (e) An evaluation certificate from an independent registered land surveyor, if required by the Ministry of Interior or the Ministry of Finance.
- Copy of the applicant’s passport.
- Birth Certificate.
- Detailed biography or CV.
- Marriage/Civil Partnership certificate (if applicable).
- Copy of Residence Permit in the Republic of Cyprus.
- Two passport size photographs.
Further documentation might be required depending on which investment method is chosen by the investor (see options in Section B above).
With the latest amendment to the programme, a new category has been added: that of Honorary Naturalization, for reasons of public interest. Honorary Naturalization may be granted to the following categories of foreigners:
- Athletes for participation in the national sports teams of the Republic of Cyprus, on the recommendation of the Cyprus Sports Organization (CMO);
- Clergy at the highest levels of the clergy hierarchy of the churches of the religious groups of the Republic of Cyprus, at the request of the representatives of the religious groups in the House of Representatives;
- Persons who have provided high-level services to the Republic of Cyprus in the context of transnational and diplomatic relations, on the recommendation of the Ministry of Foreign Affairs;
- Academics and scientists who conduct long-term research in the Republic of Cyprus or who present multiannual scientific work on Cyprus, on the recommendation of the Cyprus Academy of Science and Arts
- People involved in Art and Culture who, through their work, have provided exceptional services to Cyprus, following the recommendations of the Ministry of Education, Culture, Sports and Youth.
To maintain the citizenship, the investor must always keep in his possession a real estate property with a minimum value of €500,000 (excluding VAT) which will be declared as his ‘permanent residence’ whereas the remaining investment may be sold after the lapse of a three-year period. The investor may still generate income from the ‘permanent residence’ investment by leasing the property if he/she does not wish to physically reside there. The scheme is designed to offer an attractive ‘exit option’ to the investor. The residential property must always be kept as ‘permanent residence’ or, if sold, it must be replaced with an another residential property of equal or greater value.
According to the programme’s rules, investors keep all investments for the first 5 years from the date of obtaining citizenship. Over this 5-year period, investors must submit a bundle of specified documents to the Ministry of the Interior and the Ministry of Finance of Cyprus on an annual basis. This action confirms the preservation of investment and permanent residence in the country. A Naturalization Control Unit has been set up composed of suitably trained staff of the Ministry of Interior.
If the authorities conclude that the investor has not held the investment and no longer meets the programme’s financial criteria, his citizenship might be canceled.
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