In an effort to accelerate growth and attract foreign investment, the Council of Ministers of Cyprus in September 2016 revised the citizenship by exemption program and has set new economic criteria on the basis of which Cypriot citizenship can be obtained.
The most important change effected to the program is the setting of the amount of € 2 million as the minimum threshold to be invested by investors and cancelled the € 5 million requirement.
The 4 alternative ways of investment that now may be used in order to qualify for naturalization as per the new amendment are the following:
The 4 alternative ways of investment that now may be used in order to qualify for naturalization as per the new amendment are the following:
- Investing an amount of at least € 2 million in immovable property,developments and infrastructure projects in Cyprus; or
- Investing an amount of at least € 2 million in acquiring, incorporating or participating in Cyprus businesses or companies which are based and activate in Cyprus; or
- Investing an amount of at least € 2 million in alternative investment funds or financial assets of Cypriot businesses or Cypriot organizations which are established in Cyprus and licenced by the Cyprus Securities and Exchange Commission; or
- Investing an amount of at least € 2 million in a combination of the above three financial criteria. In such a combination the investor may also invest in government bonds for a maximum amount of € 500.000 and provided it hold the bonds for at least 3 years.
Another interesting change to the scheme is the introduction of the requirement/pre-qualifier to hold a residence, permit in Cyprus. Filing of the citizenship application and the residence permit application can take place simultaneously. A simplified procedure of obtaining a residence permit is introduced where an application for residence permit is filed exclusively for the purposes of the citizenship application.
High ranking Managers and Directors of companies
Under the scheme, directors / managers of companies working in Cyprus who paid personal taxes of at least € 100.000 the last 3 years from the application, may also apply to be benefited from the scheme provided such director/manager meets the additional conditions mentioned below. The investment criteria as indicated above apply for the employing company.
High ranking Managers and Directors of companies
Under the scheme, directors / managers of companies working in Cyprus who paid personal taxes of at least € 100.000 the last 3 years from the application, may also apply to be benefited from the scheme provided such director/manager meets the additional conditions mentioned below. The investment criteria as indicated above apply for the employing company.
The applicants must have a clean criminal record in their country of origin and country of residence (if different) and not to be a sanctioned person in the EU; and
Parents of the Investor
Parents of an investor may also qualify to apply for Cypriot citizenship when they own a residential property in Cyprus of value at least €500.000. In such a case they will not need to make the investment of the € 2 million.
Notes
- Own residential property in Cyprus of a value of at least €500.000; and
- Hold a residence permit in Cyprus.
Parents of the Investor
Parents of an investor may also qualify to apply for Cypriot citizenship when they own a residential property in Cyprus of value at least €500.000. In such a case they will not need to make the investment of the € 2 million.
Notes
- Investments can be made personally or through vehicles such as companies or trusts.
- In order to qualify, the investment must have been made during the period of three years prior to the date of filing the application and must be kept for a period of at least three years after naturalization.
- The new scheme comes in force as from now.
- The old scheme which was applicable as from 2014 will remain in force as until 31/10/2016 so that an applicant until then may chose under which scheme will file his / her application.
- Applications pending and filed with the old scheme will be examined with the provisions of the old scheme.
A non-Cypriot citizen, who meets one of the following economic criteria (A), either personally or through a company/ companies in which he/ she participates as a shareholder - proportionally based on the percentage of participation, or even as a high-ranking senior manager of a company/ companies that meets one of economic criteria (A), may apply for the acquisition of the Cypriot citizenship through Naturalization by exception.
A high-ranking senior manager may apply, provided that he/she receives such a remuneration that generates for the Republic tax revenue of at least EUR 100,000 for a three-year period and provided that this tax has already been paid or prepaid. 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.
In addition, the applicant must fulfil the Terms and Conditions set out in Part B.
In the case where, following a periodic inspection, it has been ascertained that any condition is being circumvented, the Naturalization may be revoked.
A high-ranking senior manager may apply, provided that he/she receives such a remuneration that generates for the Republic tax revenue of at least EUR 100,000 for a three-year period and provided that this tax has already been paid or prepaid. 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.
In addition, the applicant must fulfil the Terms and Conditions set out in Part B.
In the case where, following a periodic inspection, it has been ascertained that any condition is being circumvented, the Naturalization may be revoked.
Α.1. Investment in real estate, development and infrastructure projects:
The applicant must have made an investment of at least EUR 2,0 million for the purchase or construction of buildings or for the construction of other development projects (residential or commercial developments, developments in the tourism sector or other infrastructure projects).
Investments in land are included in this criterion, provided that the application will include a business plan for its development. It is understood that investment in land where building is not allowed.
Special Note:
It is understood that VAT, transfer duties or any other charges or taxes are not included in the amount of the investment. The Scheme does not exclude the purchase of properties that are not purchased for the first time.
Or
Α.2. Purchase or creation or participation in Cypriot businesses or companies:
The applicant must have made an investment of at least EUR 2,0 million in the purchase, creation or participation in businesses or companies, that are based and operating in the Republic. The investment funds must be used for the financing of the investment objectives of the relevant businesses or companies exclusively in Cyprus, on the basis of a business plan. These businesses or companies should evidently have a tangible presence in Cyprus, namely maintain offices in Cyprus, have substantial activity and turnover and also employ at least five Cypriot or EU citizens. The minimum employees number will be increased in the event where more than one applicants invest simultaneously in the same business or company. In addition, the aforesaid employees must evidently have had legal and continuous residence in Cyprus for the 5 years’ period preceding the submission of the application.
Or
Α.3. Investment in Alternative Investment Funds or in financial assets of Cypriot companies or organizations which are licensed by the Cyprus Securities and Exchange Commission:
The applicant must have proceeded with the acquisition of units of at least EUR 2,0 millionfrom Alternative Investment Funds (AIF) which have been established in Cyprus and licensed and supervised by the Cyprus Securities and Exchange Commission, the investments of which are exclusively in Cyprus, in investment which fulfil the criteria of the present Scheme or in sectors which are approved by the Minister of Finance.
For the purposes of verifying that the investments are maintained for at least 3 years, the manager or auditor of the fund will annually inform the Ministry of Interior and Ministry of Finance, in writing with regards to the value of the initial investment. The acquisition of financial assets of Cypriot businesses or organizations of at least EUR 2,0 million, such as bonds, debentures etc., which have been issued after approval of the CySEC, by companies which evidently have tangible presence and substantial financial activity in Cyprus and which refer to the financing of investment objectives of the said businesses or organizations exclusively in Cyprus on the basis of a business plan, fall within the scope of this Criterion.
Or
Α.4 Combination of the aforementioned criteria:
The applicant is required to have a combination of the above investments amounting to at least EUR 2,0 million.
In the context of this Criterion, the applicant may acquire bonds issued by the Cypriot Government of up to EUR 500.000-, which will be issued by the Ministry of Finance, provided that the applicant will maintain the bonds in his possession for a period of 3 years. Such bonds may not be acquired by the secondary market.
The applicant must have made an investment of at least EUR 2,0 million for the purchase or construction of buildings or for the construction of other development projects (residential or commercial developments, developments in the tourism sector or other infrastructure projects).
Investments in land are included in this criterion, provided that the application will include a business plan for its development. It is understood that investment in land where building is not allowed.
Special Note:
It is understood that VAT, transfer duties or any other charges or taxes are not included in the amount of the investment. The Scheme does not exclude the purchase of properties that are not purchased for the first time.
Or
Α.2. Purchase or creation or participation in Cypriot businesses or companies:
The applicant must have made an investment of at least EUR 2,0 million in the purchase, creation or participation in businesses or companies, that are based and operating in the Republic. The investment funds must be used for the financing of the investment objectives of the relevant businesses or companies exclusively in Cyprus, on the basis of a business plan. These businesses or companies should evidently have a tangible presence in Cyprus, namely maintain offices in Cyprus, have substantial activity and turnover and also employ at least five Cypriot or EU citizens. The minimum employees number will be increased in the event where more than one applicants invest simultaneously in the same business or company. In addition, the aforesaid employees must evidently have had legal and continuous residence in Cyprus for the 5 years’ period preceding the submission of the application.
Or
Α.3. Investment in Alternative Investment Funds or in financial assets of Cypriot companies or organizations which are licensed by the Cyprus Securities and Exchange Commission:
The applicant must have proceeded with the acquisition of units of at least EUR 2,0 millionfrom Alternative Investment Funds (AIF) which have been established in Cyprus and licensed and supervised by the Cyprus Securities and Exchange Commission, the investments of which are exclusively in Cyprus, in investment which fulfil the criteria of the present Scheme or in sectors which are approved by the Minister of Finance.
For the purposes of verifying that the investments are maintained for at least 3 years, the manager or auditor of the fund will annually inform the Ministry of Interior and Ministry of Finance, in writing with regards to the value of the initial investment. The acquisition of financial assets of Cypriot businesses or organizations of at least EUR 2,0 million, such as bonds, debentures etc., which have been issued after approval of the CySEC, by companies which evidently have tangible presence and substantial financial activity in Cyprus and which refer to the financing of investment objectives of the said businesses or organizations exclusively in Cyprus on the basis of a business plan, fall within the scope of this Criterion.
Or
Α.4 Combination of the aforementioned criteria:
The applicant is required to have a combination of the above investments amounting to at least EUR 2,0 million.
In the context of this Criterion, the applicant may acquire bonds issued by the Cypriot Government of up to EUR 500.000-, which will be issued by the Ministry of Finance, provided that the applicant will maintain the bonds in his possession for a period of 3 years. Such bonds may not be acquired by the secondary market.
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:
For all Criteria listed in Part A, the applicant must hold a permanent privately-owned residence in the Republic of Cyprus, the purchase price of which must be at least EUR 500.000, plus V.A.T.
The purchase value of the privately-owned residence of the applicant in Cyprus is not included in the minimum investment which is required for the submission of the application, but rather it is additional. In the event where the purchase price of the residence exceeds EUR 500.000-, the exceeding amount may be used for the purposes of completing the minimum investment requirement as per the above Criteria. However, if an applicant decides to invest in the purchase of one or more residential properties as per Criterion A1 above, then he shall not oblige to buy an additional privately – owned residence of purchase value EUR 500.00, provided at least one of the aforementioned residential properties have a purchase price of at least EUR 500.000- plus V.A.T. and provided that such property will be retained in the investors possession for lifetime. Members of the same family, who apply separately as investors, can collectively acquire one residence, provided that the total value of this home-property covers the amount of EUR 500.000 per applicant.
3. Residence in Cyprus:
The applicant prior to his naturalization as a Cypriot citizen, will have to be holder of residence permit in Cyprus. In the event where the applicant is not already in possession of a residence permit, he will be able to submit an application for a migration permit on the basis of Regulation 6(2) of the Aliens and Migration Regulations, simultaneously with the submission of the citizenship application. With regards to the submission of the PR permit, solely for the purposes of obtain the Cypriot citizenship according to this present Scheme, the applicant will not be required to comply with any other conditions other than those included in Part A and Part B of this
Scheme. It is understood that the above provisions are applicable to the adult members of the investor’s family, who will apply for Cypriot citizenship.
In the event where the naturalization application is rejected for any reason, then the PR Permit which was obtained by virtue of this Scheme will be immediately cancelled.
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:
For all Criteria listed in Part A, the applicant must hold a permanent privately-owned residence in the Republic of Cyprus, the purchase price of which must be at least EUR 500.000, plus V.A.T.
The purchase value of the privately-owned residence of the applicant in Cyprus is not included in the minimum investment which is required for the submission of the application, but rather it is additional. In the event where the purchase price of the residence exceeds EUR 500.000-, the exceeding amount may be used for the purposes of completing the minimum investment requirement as per the above Criteria. However, if an applicant decides to invest in the purchase of one or more residential properties as per Criterion A1 above, then he shall not oblige to buy an additional privately – owned residence of purchase value EUR 500.00, provided at least one of the aforementioned residential properties have a purchase price of at least EUR 500.000- plus V.A.T. and provided that such property will be retained in the investors possession for lifetime. Members of the same family, who apply separately as investors, can collectively acquire one residence, provided that the total value of this home-property covers the amount of EUR 500.000 per applicant.
3. Residence in Cyprus:
The applicant prior to his naturalization as a Cypriot citizen, will have to be holder of residence permit in Cyprus. In the event where the applicant is not already in possession of a residence permit, he will be able to submit an application for a migration permit on the basis of Regulation 6(2) of the Aliens and Migration Regulations, simultaneously with the submission of the citizenship application. With regards to the submission of the PR permit, solely for the purposes of obtain the Cypriot citizenship according to this present Scheme, the applicant will not be required to comply with any other conditions other than those included in Part A and Part B of this
Scheme. It is understood that the above provisions are applicable to the adult members of the investor’s family, who will apply for Cypriot citizenship.
In the event where the naturalization application is rejected for any reason, then the PR Permit which was obtained by virtue of this Scheme will be immediately cancelled.
1. What is the time frame for the examination of an application?
Maximum three – six months.
2. What is the amount of the fees payable for each application?
Concerning the investor, the amount of €2.000 is paid at the submission of the application and, if the application is approved, the amount of €5.000 is paid as a fee for the issuance of the Naturalization Certificate.
Concerning the investor’s spouse, the amount of €2.000 is also paid at the submission of the application and, if the application is approved, the amount of €5.000 is paid as a fee for the issuance of the Naturalization Certificate. Concerning the investor’s adult child, the amount of €2.000 is also paid at the submission of the application and, if the application is approved, the amount of €5.000 is paid as a fee for the issuance of the Naturalization Certificate. Concerning the investor’s minor child, the amount of €80 is paid at the submission of the application.
3. Investments must necessarily be made by the investor personally or can they be made through company/companies of the investor or an investment fund or an investment foundation?
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.
4. What conditions must be met, so that a high – ranking senior manager of a company / companies may apply for Naturalization on the basis of this Scheme?
The first condition that needs to be fulfilled is that the company/ companies that employs the manager must have concluded in Cyprus such an investment that meets one of the economic criteria stipulated in the Decision of the Council of Ministers. If and when the investment is completed the executive may apply for Naturalization provided that he/she has paid or prepaid an income tax amounting to €100.000 for a three-year period and has acquired a permanent residence of purchase value at least €500.000.
5. What does it mean: “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?”
It means that for the purpose of filing a Naturalization application in accordance with the provisions of this Scheme, the investor must have concluded the investment during the three years preceding the submission date of the said application. That is to say, if the applicant will submit an application in 2016, the investment must have been concluded during the period 2013 – 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.
Maximum three – six months.
2. What is the amount of the fees payable for each application?
Concerning the investor, the amount of €2.000 is paid at the submission of the application and, if the application is approved, the amount of €5.000 is paid as a fee for the issuance of the Naturalization Certificate.
Concerning the investor’s spouse, the amount of €2.000 is also paid at the submission of the application and, if the application is approved, the amount of €5.000 is paid as a fee for the issuance of the Naturalization Certificate. Concerning the investor’s adult child, the amount of €2.000 is also paid at the submission of the application and, if the application is approved, the amount of €5.000 is paid as a fee for the issuance of the Naturalization Certificate. Concerning the investor’s minor child, the amount of €80 is paid at the submission of the application.
3. Investments must necessarily be made by the investor personally or can they be made through company/companies of the investor or an investment fund or an investment foundation?
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.
4. What conditions must be met, so that a high – ranking senior manager of a company / companies may apply for Naturalization on the basis of this Scheme?
The first condition that needs to be fulfilled is that the company/ companies that employs the manager must have concluded in Cyprus such an investment that meets one of the economic criteria stipulated in the Decision of the Council of Ministers. If and when the investment is completed the executive may apply for Naturalization provided that he/she has paid or prepaid an income tax amounting to €100.000 for a three-year period and has acquired a permanent residence of purchase value at least €500.000.
5. What does it mean: “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?”
It means that for the purpose of filing a Naturalization application in accordance with the provisions of this Scheme, the investor must have concluded the investment during the three years preceding the submission date of the said application. That is to say, if the applicant will submit an application in 2016, the investment must have been concluded during the period 2013 – 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.
1. Acquiring Cyprus citizenship entitles a person, amongst others, to live and work without any restriction as well as travel without any formalities within the 27 countries of European Union.
2. Cypriot passport holders are entitled to travel visa-free to more than 140 countries.
3. Dual citizenship. It offers an effective tool for international tax planning and provides financial privacy. A second passport provides the ability to create wealth across borders, to avoid visa restrictions when travelling and it enforces the mobility of the individuals, something that could not be feasible when using a home country passport. Acquiring a second citizenship is an integral part for international diversification meaning that in times of political instability, civil war and terrorism in a home country a second passport provides an alternative exit route. Conclusively, the alternative passport is the best life insurance money
can buy.
4. It enables access to the excellent healthcare institutes within the 27 countries of European Union. Amongst the substantial benefits that the Cypriot citizenship provides with are healthcare rights. Following the adoption of the Directive on cross-border healthcare, EU citizens have extensive and clear rights with respect to healthcare in any of the 27 Member States of the European Union. The Republic of Cyprus provides for healthcare rights based on socio-economic criteria. In certain cases, healthcare in Cypriot public hospitals is entirely free. Cypriot public hospitals are equipped with high technology equipment which aims to provide with high quality healthcare. As with respect to healthcare in any of the 27 EU Member States, patients have the benefit to receive healthcare in any EU Member State and be reimbursed with accordance with the amount that would be covered by the affiliated Member State had healthcare taken place on its territory. Additionally, with the acquisition of the European Health Insurance Card one may receive treatment under the same conditions and at the same cost as people insured in that Member State.
5. It enables access to the excellent education institutes within the 27 countries of European Union. Educational benefits are another aspect of important benefits that one may gain as a citizen of the Republic of Cyprus. Cyprus has two highly recognized public universities (University of Cyprus and Cyprus University of Technology). Cypriot citizens that secure places at the public universities are not subjected to any tuition fees as the entire undergraduate courses are free. Additionally, Cypriot citizens have the right to study in another EU Member State with the same conditions and fees as the nationals of the said country. This is an exceptional advantage given that several EU Member States provide with free education or significantly low tuition fees for both undergraduate and postgraduate degrees. A great
example of counties with low or free tuition fees are Germany, The Netherlands, Sweden and Greece. Another result of the common market is the mutual recognition of degrees, diplomas or other certifications among EU countries. Accordingly, a certificate granted in any Member State is recognized in all Member States.
6. Taxation Benefits. Cyprus is certainly among the countries with the lowest corporate tax rate. This is a great advantage for the expansion of business activities especially taking into consideration the treaties that Cyprus has signed with several countries, for the avoidance of double taxation, when a company is registered in two countries, for instance Cyprus and Russia. Additionally, since 2004 and following Cyprus Membership with the European Union, income that comes from dividends or interests are not subject to income taxation but is merely subject to contribution for defence. The harmonization with EU law has led to the betterment of VAT services and the introduction of modern means which function as an extrication of bureaucracy.
7. Employment Benefits. As a result of the accession of Cyprus in the European Union and the establishment of the common market, EU citizens enjoy extensive rights in all the 27 Member States of the EU. The freedom of movement gives EU citizens the right to move freely and work in any Member State without restrictions. Further to this, nationals of the Members States also have the right to work and reside in any Member State with their family even in cases where their partner is not an EU citizen. Under the social security scheme Cypriot citizens enjoy a number of benefits like sickness benefits, job-seekers allowances, maternity allowances, pension, disability allowance and workplace accident allowance.
8. Pension Benefits. All the Cypriot citizens who are insured under the social security scheme are entitled to receive pension. They also have the same rights to social insurance with the citizens of the Member State in which they live or work. Moreover, EU citizens maintain the right to receive their social insurance benefits even in cases where they move to another Member State. Thus, their allowance is being sent from the Member State in which they have worked to the Member Sate of their residency.
2. Cypriot passport holders are entitled to travel visa-free to more than 140 countries.
3. Dual citizenship. It offers an effective tool for international tax planning and provides financial privacy. A second passport provides the ability to create wealth across borders, to avoid visa restrictions when travelling and it enforces the mobility of the individuals, something that could not be feasible when using a home country passport. Acquiring a second citizenship is an integral part for international diversification meaning that in times of political instability, civil war and terrorism in a home country a second passport provides an alternative exit route. Conclusively, the alternative passport is the best life insurance money
can buy.
4. It enables access to the excellent healthcare institutes within the 27 countries of European Union. Amongst the substantial benefits that the Cypriot citizenship provides with are healthcare rights. Following the adoption of the Directive on cross-border healthcare, EU citizens have extensive and clear rights with respect to healthcare in any of the 27 Member States of the European Union. The Republic of Cyprus provides for healthcare rights based on socio-economic criteria. In certain cases, healthcare in Cypriot public hospitals is entirely free. Cypriot public hospitals are equipped with high technology equipment which aims to provide with high quality healthcare. As with respect to healthcare in any of the 27 EU Member States, patients have the benefit to receive healthcare in any EU Member State and be reimbursed with accordance with the amount that would be covered by the affiliated Member State had healthcare taken place on its territory. Additionally, with the acquisition of the European Health Insurance Card one may receive treatment under the same conditions and at the same cost as people insured in that Member State.
5. It enables access to the excellent education institutes within the 27 countries of European Union. Educational benefits are another aspect of important benefits that one may gain as a citizen of the Republic of Cyprus. Cyprus has two highly recognized public universities (University of Cyprus and Cyprus University of Technology). Cypriot citizens that secure places at the public universities are not subjected to any tuition fees as the entire undergraduate courses are free. Additionally, Cypriot citizens have the right to study in another EU Member State with the same conditions and fees as the nationals of the said country. This is an exceptional advantage given that several EU Member States provide with free education or significantly low tuition fees for both undergraduate and postgraduate degrees. A great
example of counties with low or free tuition fees are Germany, The Netherlands, Sweden and Greece. Another result of the common market is the mutual recognition of degrees, diplomas or other certifications among EU countries. Accordingly, a certificate granted in any Member State is recognized in all Member States.
6. Taxation Benefits. Cyprus is certainly among the countries with the lowest corporate tax rate. This is a great advantage for the expansion of business activities especially taking into consideration the treaties that Cyprus has signed with several countries, for the avoidance of double taxation, when a company is registered in two countries, for instance Cyprus and Russia. Additionally, since 2004 and following Cyprus Membership with the European Union, income that comes from dividends or interests are not subject to income taxation but is merely subject to contribution for defence. The harmonization with EU law has led to the betterment of VAT services and the introduction of modern means which function as an extrication of bureaucracy.
7. Employment Benefits. As a result of the accession of Cyprus in the European Union and the establishment of the common market, EU citizens enjoy extensive rights in all the 27 Member States of the EU. The freedom of movement gives EU citizens the right to move freely and work in any Member State without restrictions. Further to this, nationals of the Members States also have the right to work and reside in any Member State with their family even in cases where their partner is not an EU citizen. Under the social security scheme Cypriot citizens enjoy a number of benefits like sickness benefits, job-seekers allowances, maternity allowances, pension, disability allowance and workplace accident allowance.
8. Pension Benefits. All the Cypriot citizens who are insured under the social security scheme are entitled to receive pension. They also have the same rights to social insurance with the citizens of the Member State in which they live or work. Moreover, EU citizens maintain the right to receive their social insurance benefits even in cases where they move to another Member State. Thus, their allowance is being sent from the Member State in which they have worked to the Member Sate of their residency.
