THE CYPRUS INVESTMENT PROGRAMME (CIP)
Europe has long established itself as the most sought-after region in terms of high net worth immigration, accounting for over half of the total number of global citizenship applications, with the Caribbean in second place, followed by North America in third. Noteworthy, are recent studies conducted by global immigration experts, ranking the Cypriot Investment Programme among the “top ten best in the world”.
Furthermore, the Republic of Cyprus (“Cyprus”) has been ranked the 5th best relocation destination in the world (Knight Frank World Wealth Report 2018). Ranked by key business and leisure indicators, Cyprus was the only European country alongside Switzerland, and the only EU Member State, to make it into the top five– ahead of London, Madrid and Monaco. Coupled with what most international tax advisors agree is the most favourable onshore personal tax regime in the world, Cyprus provides an attractive destination for investment-based immigration. With at least 320 days of sunshine a year, Cyprus was classified the sunniest European location.
The Cypriot immigration policy and legal framework now enable Non-EU and EU applicants to obtain Cypriot citizenship in approximately 6 months. There are a number of reasons the CIP may now be considered to be the most attractive programme in Europe, including:
- No requirement for applicants to live on the island prior, during or after the application process, but they are required to hold a Residency Permit for at least 6 months.
- Application process takes approximately 6 months.
- Simple and straightforward application process with no medical testing and no language requirements.
The Cyprus Investment Programme, based on subsection (2) in Section 111A of the Civil Registry Laws of 2002 to 2019, was approved by the Cyprus Council of Ministers on the 13 September 2016, and subsequently amended in May 2018 and February 2019. The latest amendments to the CIP are effective on 15 May 2019 onwards, and are reflected in this memo for your ease of reference.
The Cyprus government has formulated an investment programme aimed at high net worth individuals, investors and entrepreneurs. This allows the successful applicant and their family to hold a Cypriot passport and enjoy all the benefits of a Cypriot National, subject to making necessary investments and complying with specific conditions. Cyprus has been a member of the EU since 2004.
Eligibility Criteria - The following persons are eligible to apply under the Cyprus Investment Programme:
- Main applicant and spouse i.e. husband and wife.
- Children up to and including the age of 17.
- “Adult children” between the ages of 18 to 28
- Subject to their application being reviewed by the Council of Ministers prior to their 29th birthday; and
- Provided they are students working towards either a first university degree, or a first master’s degree.
- Parents of the main applicant may be included in the same application, provided an additional investment of €500,000 (plus VAT if applicable), is made in residential property in Cyprus.
- High ranking officers of Cyprus companies, who have made an investment in Cyprus, and who have paid taxes to the Cypriot authorities in the aggregate value of €100,000 in the last three years.
All applicants (with the exception of minor children under 18 years of age) will need to be in possession of a valid Schengen visa when submitting a CIP application (unless the applicant is a holder of a passport exempting them from the need to obtain a Schengen Area visa); as well as a clean criminal record from the country of birth and the current country of residence, if different from birth country.
According to the applicable law, rules and regulations that apply in relation to applying and obtaining the Cyprus Citizenship by Investment, an applicant is not eligible to obtain citizenship if he/she:
- Has previously been denied citizenship by any other EU country;
- Does not possess a Clean Criminal Record;
- Cannot evidence his/ her source or wealth;
- Funds for his/ her investment are not acceptable by Cyprus banks;
- Is subject to criminal investigation, without being indicted;
- Is facing criminal prosecution and is a defendant;
- Is convicted for serious crimes such;
- Is or used to be associated with legal entities, facing restrictive measures from the European Union;
- Is subject to sanctions or is associated with legal entities, sanctioned by third countries (e.g. United States, Russia and Ukraine) or the United Nations Security Council;
- Is or was in the past under investigation and/or faces/ed charges for criminal offenses and is/was placed in the European Wanted-List (EUROPOL) or International Wanted-List (INTERPOL), or
- Is a “Politically Exposed Person”, having held office in the past 5 years.
“Politically exposed person” generally means a person who is or who has been entrusted with prominent public functions in Cyprus or in another country, an immediate close relative of such person or a person known to be a close associate of such person
The definition, “prominent public function” is wide and includes among other (a) heads of State, heads of government, ministers and deputy or assistant ministers; (b) members of parliament or of similar legislative bodies; (c) members of the governing bodies of political parties; (d) members of courts or judicial bodies; (e) members of courts of auditors or of the boards of central banks; (f) ambassadors, chargés d' affaires and high-ranking officers in the armed forces; (g) members of the administrative, management or supervisory bodies of State-owned enterprises; (h) directors, deputy directors and members of the board or equivalent function of an international organisation; (i) mayor.
An applicant who falls in any of the categories listed above is not eligible to obtain the Cypriot citizenship and his/ her application is liable to be rejected. If a family member of an applicant falls in any of the categories above, that might amount to a reason for the applicant’s application to be rejected
The applicable criteria and requirements in order for a person to be eligible to obtain Cyprus Citizenship by Investment can be found at: www.moi.gov.cy
Main advantages of being a Cypriot Citizen:
Cyprus officially became a Member of the European Union on May 1st, 2004 during the largest single expansion of the EU, when a total of 10 countries officially became Member States.
As the basic principles and philosophy of the European Union provide, being a Member State of the EU automatically entitles all EU citizens to the basic rights put forth by the European Union’s Constitution, namely all of the following rights:
- Free Movement of People:
- Citizens of EU Member States are able to freely travel, reside, study and work within the 28 countries of the EU, as well as Switzerland, Norway, Iceland and Liechtenstein. An entire family can obtain Cyprus Citizenship i.e. spouse of applicant, children under 18 years, and adult dependents (ages 18 to 28) and parents of the main applicant. Children of EU nationals have the right to lower tuition fees within the EU.
- Free Movement of Services
- Establishment and free movement of services - individual citizens and their companies can offer services within the EU Member States without any obstacles.
- Free Movement of Capital
- Transfer funds between EU Member States, purchase of property in any preferred EU Member State, and invest in any type of activities.
- Free Movement of Goods
- All goods produced in EU Member States can be freely transferred between Member States.
- No requirement to live in Cyprus
- Either before the filing of an application or after obtaining Cypriot Citizenship. However, the applicant must, prior to naturalisation, possess a residency permit in Cyprus for a period of 6 months.
- Attractive Tax System
- Cyprus is an attractive financial centre due to its highly favourable tax system and strategic location at the crossroads of three continents – Europe, Africa and Asia. The Cypriot taxation system is consistently voted by EU tax professionals as being the most attractive in Europe.
- Newly introduced “non-domicile” regime has resulted in zero taxation of worldwide dividends and interest income, for a period of 17 years.
- High standard of living
- Cyprus offers political stability and a high standard of living with access to reputable state and private schools, medical facilities and among the lowest crime rates within the EU.
- Visa Free Travel
- No visa required for travel within the EU.
- No visa required for travel to over 159 countries worldwide.
- Dual Citizenship
- Cyprus allows its citizens to hold dual citizenship.
CIP - Investment Options:
Below is a summary of the available investment options under the Cyprus Investment Programme:
Option 1: €2 Million (residential real estate) + Donation in the aggregate of €150k
A 5-year investment of €2,000,000 (two million Euro) (non-inclusive of VAT of 0%, 5%, or 19%, as the case may be) in residential real estate situated in Cyprus. However, any application which includes resale residential property previous included in a CIP application by another applicant, results in an increased in the required investment to €2,500,000.
The investment in residential real estate must be retained for a minimum period of 5 years, after which point the overall investment in real estate can be reduced to a minimum of €500,000 (five hundred thousand Euro) (non-inclusive of VAT, if any) in residential property which must be held indefinitely.
Examples of acceptable investment(s) under this option include, amongst others, the following (all values below are quoted before VAT, if any):
- Purchase one villa for €1.5 million, and one apartment for €500,000. Sell the villa in 5 years’ time.
- 1Purchase one villa for €2 million and sell in 5 years’ time, but simultaneously purchase one residential property for a minimum amount of €500,000. If two residential properties are acquired instead of one, then certain conditions may apply.
- Purchase a portfolio of villas/apartments. Sell in 5 years’ time, keeping one residential property purchased for a minimum amount of €500,000. If two residential properties are finally retained instead of one, then certain conditions may apply.
Note: the parents of the main investor can also be included within the same application, subject to approval of the main applicant, with an additional investment of €500,000 (non-inclusive of VAT, if any) in residential property.
In addition to the above criteria, the following donations are obligatory under the CIP:
- €75,000 to the Cyprus Land Development Corporation; and
- €75,000 to the Research and Innovation Foundation, unless the applicant invests a minimum of €75,000 in a certified innovative enterprise (i.e. an enterprise that had acquired the relevant certificate by the Ministry of Finance).
For the avoidance of doubt, the obligatory donation to the Cyprus Land Development Corporation will be applicable in all cases, without the possibility for exemption.
In addition to satisfying any one of the above financial criteria, the primary applicant for Cypriot citizenship by way of the CIP must fulfil all of the following conditions:
- Have a clean criminal record from the country of origin and/or residence;
- Confirm that the applicant’s name is not included in the list of persons whose property is ordered to be frozen by the EU;
- Applicants (with the exception of minor children under 18 years of age) will need to be in possession of a valid Schengen visa when submitting a CIP application (unless the applicant is a holder of a passport exempting them from the need to obtain a Schengen Area visa);
- Applicants who were previously rejected for citizenship by any other EU country, are not eligible under the CIP.
CIP - process and timeline:
In terms of the CIP application process and timeline, it is summarized as follows:
Approximately 6 months for the main applicant and spouse.
IMPORTANT NOTE: there is no requirement to live in Cyprus before, during, or after the CIP application.
Below is a brief summary of the application process for acquiring Cypriot citizenship by way of investment through the CIP:
- File the CIP application for the main applicant and spouse.
- Following day after CIP application is submitted, file a Permanent Residency Permit (PRP) application for the main applicant, spouse, and minor children (between ages 6 and 17). This requires the main applicant, spouse, and minor children to visit Cyprus. (Note: minor children can be excluded from the PRP application, and this will not affect their ability to apply for citizenship- see step 6 below).
- Within 5 days of filing, approval of PRP is granted.
- Approval of CIP application within approximately 6 months.
- Issuance of Certificates of Naturalization and passports approximately 6 months from the date of the original filing (in regards to the main applicant and spouse).
- Citizenship application filed for minor children, requires 2 to 3 weeks for approval. Immediate issuance of Certificates of Naturalization and passports.
- Citizenship application filed for adult children (up to age 28) and parents of main applicant.
- Following day, the adult children and parents of main applicant must visit Cyprus to file a PRP application.
- Adult children and parents of main applicant are approved for citizenship within approximately 6 months of filing the relevant PRP application.
- Issuance of Certificates of Naturalization and passports approximately 6 months from the date of relevant PRP filing (in regards to adult children and parents of main applicant).
How Savva & Associates can assist:
We are leaders in the area of Immigration Services in Cyprus, and well positioned, through our network of companies, including our affiliate law firm G. Polemidiotis & Co LLC, specialists in immigration and property law, to assist clients with the preparation and filing of a Citizenship Application. We are frequently engaged by some of the world’s largest and most reputable international law firms, investment firms and family offices.
The following is a list of core services we provide during the course of a Citizenship Application, ensuring that we receive approval in the shortest time frame possible:
- Advise on the financial criteria, conditions to be met, and the application procedure.
- Conduct a thorough examination of the specific circumstances of the applicant in order to establish the most effective way to meet the required financial criteria.
- Find the right property matching the criteria of the applicant via our network of reputable developers and licensed real estate agents and ensure the applicant is presented with properties that are good value for money.
- Communicate with the responsible Ministries for clearance prior to submitting an application.
- Drafting and assisting with the collection of all required documents.
- Monitoring the status of the application and follow up, including personal meetings where deemed necessary.
- Regular update of the applicant on the progress of their application.
- Upon granting of the Citizenship, our office can assist with the issuance of the Cyprus passports and ID cards.
- Assistance with the opening of bank accounts with banks located in Cyprus.
Our team of highly experienced professionals can advise you further on the Cyprus Investment Programme application, on the basis of your particular facts and circumstances. Please feel free to contact Charles Savva at firstname.lastname@example.org to discuss how we can be of assistance to you.