Cyprus Citizenship-by-Investment Program – September/2016 Amendments Reduce Minimum Investment and Introduce Residence Requirements
The Cyprus Citizenship-by-Investment Program was amended on 13 September 2016, pursuant to a decision of the Council of Ministers.
The new decision aims to make a successful Citizenship-by-Investment Program even more accessible and customized to the needs and conditions of the Cypriot and global economy.
Four major changes were introduced:
Firstly, the minimum investment barrier is reduced, enabling the investor to acquire citizenship on the basis of the purchase of a residence unit(s) in Cyprus with a total value of €2 million, instead of participating in a collective investment scheme with 2,5 million, as provided in the old Program. Investments in other real estate, businesses and funds are also eligible under the €2 million threshold, plus a residence unit of €0,5 million plus VAT, instead of €3 or €5 million provided by the old Program.
Secondly, the applicant investor must be the holder of a residence permit, in order to qualify for Cypriot citizenship. In practice, this amendment is expected to have minimal effect on the processing time for the acquisition of citizenship; the applicant shall apply for a residence permit on the same day that he applies for the Program, while no citizenship qualifying period is introduced. The criteria for the acquisition of the residence permit are identical to those prescribed for the Program.
Thirdly, the parents of both the applicant and his/her spouse are eligible to obtain citizenship, provided that they purchase a residence unit with a value of €0,5 million, plus VAT (if applicable).
Fourthly, the options to acquire citizenship through deposits in banks and as a result of the 2013 “haircut” are abolished.
Cypriot citizenship shall be acquired when a foreign investor/entrepreneur meets the requirements under one of the following four options:
1 Investment in real estate, land development and infrastructure projects
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.
2 Purchase or creation or participation in Cypriot businesses or companies
The applicant must have made an investment of at least €2 million in the purchase, creation or participation in businesses or companies that have a tangible presence in Cyprus and employ at least five (5) Cypriot or EU citizens.
3 Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations licensed by the Cyprus Securities Exchange Commission
4 Combination of the aforementioned options of at least €2 million
For the purposes of this option, the investor may purchase special state bonds of the Republic of Cyprus with a value of at least €0,5 million.
Criterion 1 shall remain the most popular and cost-effective option, enabling the investor to acquire citizenship on the basis of the purchase of a residence unit(s) in Cyprus with a value of €2 million provided that at least one of these residence units has a value of €0,5 million, plus VAT (if applicable).
A transitional period is granted until the 31st October 2016, during which an investor can choose to apply under the new or the old scheme.
Author: Michail Kamperis, Partner, Ierotheou, Kamperis & Co. LLC