The Cyprus Investment Program in a Nutshell

As part of the national efforts to boost local economy and attract foreign investments, the Council of Ministers introduced the Cyprus Investment Program (CIP) in May 2013, to tackle the unfavourable implications of the 2013 financial crisis.

One of the key incentives of the program is the granting of Cyprus (EU) citizenship to investors (non-Cypriot nationals).

The Program went through several revisions since its inception which aim at strengthening the Program’s credibility while securing the investors’ interests. The latest amendment of the Program occurred recently with the vote by the House of Representatives and the publication of the relevant Regulations in August 2020 which will be outlined further.

Key Economic Criteria

1. Investment in real estate, developments and infrastructure projects amounting to at least 2 million euros.
2. Purchase or recommendation or participation in Cypriot companies and companies with an investment cost of at least 2 million euros.
3. Investment in Alternative Investment Agencies or Registered Alternative Investment Agencies or financial assets of Cypriot companies or Cypriot organizations licensed by the Hellenic Capital Market Commission worth at least 2 million euros.
4. Combination of the above, meaning that the total investment amounts to at least 2 million euros.
5. Mandatory Donation

Any Applicant, following the approval of the application for naturalization by the Council of Ministers, needs to donate an amount of at least €100.000 to one of the following causes:

1. a) the Research and Innovation Foundation; or
2. b) the Service of Industry and Technology, in order to materialize targeted funding plans for small and very small businesses; or
3. c) the Funds for Renewable Sources of Energy and Conservation of Energy; or
4. d) the National Solidarity Fund,

and

To donate €100.000 to the Cyprus Land Development Corporation.

Other Criteria

1. Clear Criminal Record
2. Schengen visa. The applicant must have a valid Schengen visa.
3. Permanent Private Residence in Cyprus: In all cases the applicant must be the owner of a permanent private residence in the Republic of Cyprus, with a market value of at least €500,000, plus VAT.
4. Residence in Cyprus: The applicant before his/her naturalization must be a holder of a residence permit in the Republic of Cyprus for a period of at least 6 months.

The Latest Amendments (August 2020) in Brief

Honorary Naturalisation

• A new category has been introduced: that of Honorary Naturalisation, for reasons of public interest. Honorary Naturalisation may be granted to the following categories of foreigners:

1. Athletes for participation in the national sports teams of the Republic of Cyprus.
2. Clergy at the highest levels of the clergy hierarchy of the churches of the religious groups of the Republic of Cyprus.

• Persons who have provided high-level services to the Republic of Cyprus in the context of transnational and diplomatic relations.

1. Academics and scientists who conduct long-term research in the Republic of Cyprus or who present multiannual scientific work on Cyprus.
2. People involved in Art and Culture who, through their work, have provided exceptional services to Cyprus.

The honorary naturalisation for all of the above categories is subject to the recommendation of the relevant authority.

Right of Revocation

• Citizenship can be revoked if any of the economic criteria or requirements of the Programme are no longer met.

High-risk Applicants may be Excluded

• The Government has chosen to continue to exclude from the Programme persons who themselves or whose family members fall into the categories of high-risk, including the following:

1. Applicants whose assets have been subject to a seizure order within the EU;
2. Politically Exposed Persons (PEPs);

• Applicants sentenced for a serious criminal offence which carries a sentence of five years or more or for any other serious offence or offences that involve moral obscenity;

1. Applicants subject to criminal investigation, whether in Cyprus or abroad, in relation to a serious criminal offence which carries a sentence of five years or more or for any other serious criminal offence or which involves moral obscenity;
2. Applicants who are affiliated with any person or legal entity or organisation against which sanctions were imposed by the European Union and these sanctions are still in force;
3. Applicants who were, but who no longer are, affiliated with any physical person or legal entity against which sanctions were imposed by the European Union and these sanctions are still in force;

• Applicants who have been subject to sanctions by the European Union or the United Nations and such sanctions are still in force or were in force up to twelve months prior to the submission of the application;
• Applicants who are affiliated with any physical person or legal entity against which sanctions were imposed by the European Union or the United Nations and these sanctions are still in force or were in force up to 12 months prior to the submission of the application;

1. Applicants who were affiliated with any physical person or legal entity against which the EU or the United Nations have imposed restrictive measures and such restrictive measures are in force or were in force up to twelve months prior to the submission of the application, but these Applicants are no longer affiliated with these legal entities, such as shareholders and high-ranking officials of companies, provided they were affiliated to the particular companies or physical persons when the sanctions were imposed;
2. The Applicant is wanted at a European level by Europol or at an International level by Interpol.

The validity of the Criminal Record of the Applicant has now been extended to six months.

Source of Funds

• All funds used for the investments must be funds derived from the bank account of the investor or a company or companies of the investor based abroad. All payments need to be made to Financial Institutions in Cyprus regulated by the Cyprus Central Bank. It is understood that copies of bank remittances will have to be included in the application.

Family Members maybe Entitled to Cypriot Citizenship too

• The parents of the spouse of the main Applicant may also apply for Citizenship in addition to the parents of the main Applicant, provided they also own a permanent private residence in Cyprus worth at least €500,000 plus VAT.
• The applicant can no longer set up a Development Company in order to channel his/her investment. Investment in land in a no-building zone is not a qualified investment.

Investment in local Businesses/Entrepreneurship

Furthermore, it is possible for an Investor to qualify under the CIP if he/she purchases, establishes or participates in a Cypriot business or company formed and operating in the Republic of Cyprus at an investment cost of at least 2 million euros which must be channelled/directed to finance the investment objectives of this undertaking and company solely in the Republic, on the basis of an Investment Plan.

Applications shall be assessed, and it must be proven that enterprises or companies have a physical presence in the Republic of Cyprus, with substantial activity and significant turnover, and that they employ at least 9 (nine) Cypriot or European Union citizens.

With regards to the permanent residence that the Applicant needs to keep for life and which needs to have a value of at least €500.000 euros plus VAT, in addition to the other documents that need to be submitted with the application, such as a bank waiver, planning permit, or proof of joint signatory account, a search needs to be submitted.

Benefits of the Cyprus Investment Programme:

• The right of free movement, freedom to work and study in the EU;
• Low tax rates and free trade within the EU;
• Completion in approximately six months;
• Benefits for the whole family, including the spouse’s parents;
• Visa-free or visa-on-arrival travel to numerous destinations including the UK;
• Excellent education system as well as first-rate health care;
• An outstanding holiday destination;

Are you ready to get Started?

Interested in Applying for the Cyprus Investment Program? Get in touch with one of our legal advisors who are ready to assist you all the way and help you get rid of the hard work!

The content of this article is intended to provide a general guide to the subject matter and should not be conceived as advice.