How to get Cyprus citizenship is a question often asked by many non European businessmen that wish acquire a European citizenship coupled with other tax benefits and incentives.
The most popular way is to obtain Cyprus citizenship by investment either in real estate, government bonds or Cyprus companies.
The Republic of Cyprus has set in place the policy to grant citizenship since 2011. In March 2014 the Council of Ministers relaxed the investment criteria reducing the investment threshold to 5 million euro.
Recently , in September 2016, the government policy was further revised. The Cyprus Council of Ministers has approved the amendments to the Scheme for Naturalisation of Investors in Cyprus by Exception. The Scheme is based on subsection (2) of section 111A of the Civil Registry Laws of 2002-2015.
We explain the new Scheme by dividing the material in two sections. First by way of Q&A we answer the most common questions. On the second part we present in detail the investment criteria.
A. Cyprus Citizenship Scheme- Questions and Answers.
What is the minimum investment required? The applicant must have made an investment of at least € 2 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).
Is there a time limit? Yes. The applicant should have concluded the necessary investments during the three years preceding the date of the application and must retain the said investments for a period of at least three years since the date of the Naturalization.
For example, if the applicant will submit an application in 2016, the investment must have been concluded during the period 2014 – 2016.
Furthermore, the investor is obliged to retain the investment for at least three years following the acquisition of the Cypriot citizenship. The three-year period begins on the date of the approval of the application by the Council of Ministers.
What are the terms and conditions?
1. Clean Criminal Record: the applicant must have a clean criminal record. Furthermore, his name must not be included on the list of persons whose property is ordered to be frozen within the boundaries of the European Union.
2. Residence 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 V.A.T.
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.
It should be noted that, if the investments are made into residential property(ies), this requirement is not applicable.
What documents are required?
1. Form M127
2. Certificate of Clean Criminal Record from the country of origin and the country of residence (if it differs).
3. Contract of Sale.
4. Title Deeds/ Receipt for lodging the contract with the Lands and Surveys Department
5. Receipts for paying the agreed purchase price
6. Copy of the wire transfer in the Cypriot commercial banking institution in the name of the seller or the seller’s company
Do the spouse or the children of the applicant acquire Cypriot citizenship? Yes. The new policy provides that the spouse of the applicant as well as his financially dependent adult children (eighteen years old or above) acquire citizenship without the obligation to meet any financial criteria.
Is there a filing fee? Yes. Every application must be accompanied by a filing fee of €2000. This applies for the applicant, his spouse and his adult children. For minors the filing fee is €80.
Once the citizenship is granted there is a certificate issuance fee of €5000 per adult.
What is the time frame for the examination of an application? Approximately three months.
Can the investor use a company to make the investment? Yes. An investment through a company or fund or foundation is eligible, provided that there is a proven correlation between the investor and the company or fund or foundation.
Does the purchase of land alone satisfy the criteria? No. In order for an applicant to satisfy the requirements he must invest in the purchase or construction of buildings, or the creation of other land developments (residential or commercial developments, in the tourism sector or other infrastructure projects). Also see “B. ECONOMIC CRITERIA” below.
Is the VAT included in the amount of the €2 million investment or in the amount of the €500.000 purchase value of the privately-owned residence? No. The VAT is not included in the amount of €2 million for the “Direct Investments”, neither in the amount of €500.000 required as a minimum purchase value of the privately-owned residence.
Are transfer duties included in the amount of the €5 million investment? The transfer duties are not included in the amount of the investment, as no other charges or taxes are.
If there is a difference between the market value and the purchase value of a real estate, which amount is taken into consideration? The purchase value.
Can real estate sold for a second time be considered as an investment for the purposes of applying for citizenship? According to the contents of the Council of Ministers’ Decision, the eligible investment is not limited to properties purchased for the first time.
Is the purchase value of the privately – owned residence included in the investment or is it additional? Yes provided that the applicant’s application is based on the acquisition of real estate in Cyprus and not on any other basis.
Can the investor rent to someone else his/ her privately-owned residence? Yes, he/ she may.
Can the investor sell his/ her privately-owned residence and purchase a different one of the same or higher purchase value? Yes, he/ she may, provided that he/she will buy a different residence of equal or higher purchase value.
To what degree of relation can applicants – relatives, who are members of the same family, purchase the same privately-owned residence? To the second degree.
What are the main advantages of receiving the Cyprus citizenship?
1. An express procedure – 3 months to be approved;
2. The investment is as low as €2 million;
3. The investor must retain the investment for just 3 years after which s/he is free to realize it;
4. Citizenship granted to the spouse of the investor and minor children as well as to the financially dependent adult children up to the age of 28, who are full time students;
5. No requirement to reside in Cyprus;
6. Access to all the rights of an EU citizen protected by EU legislation and regulations: freedom to work, study, reside in any EU-member state, as well as Switzerland, Norway, Iceland, Liechtenstein;
7. No language proficiency tests;
8. Dual-citizenship permitted and the acquisition of citizenship in Cyprus is not reported to other countries;
9. Low government fees for the filing of the application;
10. Wide choice of investment options;
11. VISA-free travel to over 150 countries worldwide.
Α.1 Investment in real estate, land development and infrastructure projects:
The applicant must have made an investment of at least €2,0 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.
Α.2 Investment in financial assets of Cypriot companies or Cypriot organizations:
The applicant should have made a purchase or should have participated in companies or organizations established and operating in the Republic of Cyprus with investment costs of at least €2,0 million. 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.
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 five (5) Cypriot or citizens of European Union member-states. The minimum number of employees shall increase, if more than one applicant invest simultaneously or almost simultaneously in the same business or company. In addition, the employees of the companies need to have legally and continuously resided in Cyprus during the five years preceding the application submission date.
Α.3 Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by CySec :
The applicant should have bought units of at least €2,0 million from alternative investment funds (AIF) established in the Republic of Cyprus, licensed and supervised by the 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.
In order to confirm that the investments that meet the criteria of the current Scheme will be kept for at least three 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 €2,0 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 of units of other AIFs is not considered eligible.
Α.4 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 €2,0 million.
Within this criterion (combination of investments) 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.
C. Terms and Conditions.
1. Clean Criminal Record: the applicant must have a clean criminal record. Furthermore, his name must not be included in the list of persons whose assets, within the boundaries of the European Union, have been frozen as the result of sanctions.
2. Residence in the Republic of Cyprus: In all cases listed in Part A, the applicant must possess a permanent privately-owned residence in the Republic of Cyprus, the purchase price of which must be at least €500.000, plus V.A.T.
It is noted that members of the same family, who 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.
In case that the purchase value of the permanent privately owned residence in Cyprus exceeds the amount of €500,000, part of this additional amount can be used for purposes of supplementing the total amount of the investment made on the basis of the criteria of Part A above.
Additionally, it is noted that if the applicant has invested in housing unit/units on the basis of the aforementioned criterion A.1, the purchase of another permanent residence in Cyprus will not be required, if at least one of these housing units is worth at least €500,000, plus VAT, provided that the applicant retains the possession of the residence for life.
3. Residence Permit in Cyprus: The applicant, prior to his/her naturalization as a Cypriot citizen must hold a residence permit in Cyprus.
If the applicant does not already hold a residence permit, he/she may apply for an immigration permit on the basis of Regulation 6 (2) of the Aliens and Immigration Law, simultaneously with the application for naturalization. If the application for acquiring an immigration permit is made solely for purposes of acquiring the Cypriot citizenship, in accordance with the provisions of this Scheme, there are no other conditions than those stated in both Part A and Part B of this Scheme.
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 cancelled immediately.
D. How can we help?
Our law firm can assist a prospective applicant and provide guidance in all stages of the procedure.
- We can recommend reliable tax and investment advisors that will provide an applicant with the relevant analysis of the investment criteria that the foreign investor may elect, depending on his/her personal circumstances;
- We can advise on the application process and all required documents that must accompany each investment option;
- Prepare the application package;
- Submit the application form on behalf of the client, together with the supportive documentation and the payment of the relevant submission fee;
- Following the submission of the application our team continuously monitors the status of the application in order to ensure that it is properly progressing and provide additional documentation/ clarifications if required by the Cyprus Authorities.
Contact us now at email@example.com and we will revert the soonest with answers to all your questions.