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 on an expedited basis. There are a number of reasons the Cypriot Investment Programme (CIP) may now be considered to be the most attractive programme in Europe, including:
- No requirement to make a donation to the local government.
- 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.
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.
It should be noted that the latest amendments to the CIP were introduced in May 2018 and are reflected in this memo.
The eligibility criteria under the Cyprus Investment Programme are as follows:
- 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.
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.
Cyprus Investment Programme - Investment Options:
Below is a summary of the available investment options under the Cyprus Investment Programme:
Option 1: €2 Million (residential real estate)
A €2,000,000 (two million Euro) (plus VAT of 0%, 5%, or 19%) investment in residential real estate situated in Cyprus, held for three years.
The investment in residential real estate must be retained for a minimum period of 3 years, after which point the overall investment in real estate can be reduced to a minimum of €500,000 (five hundred thousand Euro) in residential property (excluding any VAT that was paid on initial acquisition).
Examples of possible investment under this option include the following (all prices below are quoted before VAT, if applicable):
- Purchase one villa for €1.5 million, and one apartment for €500,000 (five hundred thousand Euro). Sell the villa in 3 years’ time. If two properties are acquired instead of one apartment to be used as residential property, then certain conditions may apply
- Purchase one villa for €2 million and sell in 3 years’ time, but simultaneously purchase one residential property for a minimum amount of €500,000 (five hundred thousand Euro). If two properties are acquired instead of one residential property, then certain conditions may apply.
- Purchase a portfolio of villas/apartments. Sell in 3 years’ time, keeping a residential property purchased for a minimum amount of €500,000. If two properties are kept instead of one residential property, then certain conditions may apply
Note: the parents of the main investor can also be included within the same application, with an additional investment of €500,000 (five hundred thousand Euro) (plus VAT if applicable), in residential property.
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 who were previously rejected for citizenship by any other EU country, are not eligible under the CIP.
Cyprus Investment Programme process and timeline:
In terms of the Cyprus Investment Programme 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 S. Evangelides & Partners 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.
Additional legal services and support:
We are well positioned to provide an extended scope of services to foreign investors through our affiliate law firm Evangelides & Partners, including:
- Legal advice on the preparation and drafting of any agreements connected with the purchase of property in Cyprus, including privately owned residences;
- Financial, tax and legal due diligence of corporate entities based in Cyprus;
- Employment law, corporate and commercial law advice and support.
Our team of highly experienced professionals can advise you further on obtaining the Cyprus Investment Programme application or the Cyprus Residency Permit, on the basis of your particular facts and circumstances.
Please feel free to contact Mr. Charles Savva at email@example.com to discuss how we can be of assistance to you.