The Cyprus Investment Programme1 (“Programme”) allows non-Cypriot citizens to obtain the Cypriot citizenship and provides a pathway to a vast array of benefits.
The Programme was last revised in February 2019, establishing new criteria, terms and conditions. Certain changes apply for applications submitted up until 14 May 2019, while others apply from 15 May 2019 onwards.
Up until 14 May 2019, an investor who meets one of the financial criteria A.2 - A.5 below (or a combination where applicable), either personally or through legal entity(ies) owned by him/her, may participate in the Programme; thus obtain the Cypriot citizenship. As of May 15, 2019, an investor will be expected to fulfil the financial criterion A.1 (explained below) together with one of the financial criteria A.2 - A.5 (or a combination).
Similarly, a high-ranking senior manager that meets these financial criteria is also eligible for participation in the Programme, provided that he/she receives such remuneration that generates for Cyprus tax revenue of at least €100,000 for a three-year period and provided that this tax has already been paid or prepaid.
The applicant must have concluded the necessary investments during the three years preceding the date of the application and, if the application was submitted prior to 15 May 2019, must retain the said investments for a period of at least three years from the date of naturalization. The investments may be replaced during the said period, provided that the applicant has obtained an approval by the Ministry of Finance beforehand. As of 15 May 2019, the period of retaining the said investments will increase to at least five years.
A.1 Donation to the Research and Innovation Foundation and the Cyprus Land Development Corporation
The applicant must have donated at least (i) €75,000 to the Research and Innovation Foundation and (ii) €75,000 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. If the applicant wishes to donate a higher amount, the excess amount can be used for purposes of supplementing the total investment made on the basis of criteria A.2 - A.5.
A donation to the Research and Innovation Foundation is not required where the applicant has (i) invested at least €75,000 in an innovative enterprise certified by the Ministry of Finance or a certified social enterprise, or (ii) made an investment under criterion A.3, of a total amount equal to the 20% of the required investment amount (i.e. €400,000) 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.
A.2 Investment in real estate, land development and infrastructure projects
The applicant must have made an investment of at least €2 million, excluding VAT and any other applicable taxes and charges (i.e. transfer duties), 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. Town planning permit(s) issued to the developer must support applications submitted after 15 May 2019.
Investment in land which is 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. 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 made an investment of at least €2 million (excluding VAT) for the purchase, establishment or participation in companies or organizations, that are based and operating in Cyprus. The invested funds shall be channeled towards the financing of the investment objectives of these companies exclusively in Cyprus, based on a specific investment plan. 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.
These companies or organizations should evidently have a tangible presence in Cyprus with significant activity and turnover and employ at least 5 Cypriot or EU citizens.
A.4 Investments in Alternative Investment Funds (AIFs) or Registered Alternative Investment Funds (RAIFs) or financial assets of Cypriot companies or Cypriot organizations that are licensed by the Cyprus Securities and Exchange Commission (CySEC)
The applicant must have bought units of at least €2 million from AIFs or RAIFs established in Cyprus, licensed/registered and supervised by CySEC and whose investments are made exclusively in Cyprus, in assets that meet the criteria of the Programme or in areas approved by the Minister of Finance. It is permitted for these AIFs or RAIFs to invest in the secondary stock-market of the Cyprus Stock Exchange an amount that does not exceed €200,000.
In order to confirm that the investments which meet the criteria of the Programme are retained for the minimum required period from the date of naturalization (which depends on the date of submission of the application), the manager or auditor of the AIF or RAIF, shall inform in writing on an annual basis, the Ministry of Finance with reference to the value of the initial investment.
The purchase of financial assets of Cypriot companies or organizations of at least €2 million, such as bonds, bills and securities, issued with the approval of CySEC, by companies that have proven physical presence and substantial economic activity in 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.
The purchase by an AIF or a 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 to at least €2 million (excluding any applicable VAT).
ADDITIONAL TERMS AND CONDITIONS
In addition to satisfying any one of the above criteria, the applicant must also:
1. Have a clean criminal record and not be included in the list of persons whose assets have been frozen as the result of EU sanctions.
2. Not have been previously rejected by any other EU country to which he/she applied for citizenship.
3. Hold a valid Schengen Visa (applicable to applications submitted after 15 May 2019). EU citizens and third-country nationals that do not require an entry visa for travelling in the EU are excluded from this obligation.
4. Have a residential property in Cyprus, the purchase price of which must be at least €500,000 excluding VAT. In case the purchase value of the residence exceeds the amount of €500,000 (excluding VAT), the excess amount can be calculated and included in the total investment made on the basis of the criteria mentioned above. If the applicant has invested in housing unit(s) on the basis of criterion A.2, the purchase of another permanent residence will not be required, if at least one of these units is worth at least €500,000 (excluding VAT), provided that the applicant retains the possession of the residence for life. As of 15 May 2019, if the applicant has invested in housing units that have already been used for the purposes of acquiring the Cypriot citizenship via the Programme by another investor, the total amount of the investments, including the privately-owned residence, should amount to at least €2,5 million. Town planning permit issued to the developer must support applications submitted after 15 May 2019.
5. Hold a residence permit in Cyprusfor a period of at least 6 (six) months prior to his/her naturalization. If the applicant does not already hold a residence permit, he/she may apply for an immigration permit simultaneously with the application for naturalization.
Royal Pine & Associates Limited is registered with the Registry of Service Providers of the Cyprus Investment Programme (registration number 225). For more information please contact firstname.lastname@example.org.
The authors of the article are Anastasia Sarkisian and Sophia Stylianou.
Anastasia and Sophia are legal consultants at Royal Pine & Associates. They are qualified lawyers with experience in the corporate field and admitted members at the Cyprus Bar Association.
* This publication has been prepared as a general guide and for information purposes only. It does not purport to be comprehensive or to render legal advice.
1. On the basis of subsection 2 of section 111A of the Civil Registry Laws of 2002 - 2019