The Sale of Conditional Citizenship: The Cyprus Investment Programme Under the Lens of EU Law
In 2013, the Republic of Cyprus adopted the Scheme for Naturalisation through Investment, now called the Cyprus Investment Programme. In the past 6 years, the programme has been operating with great success and has been amended several times. According to this Programme, any third-country national can acquire Cypriot citizenship if they meet certain economic criteria such as investment in real estate, land development and infrastructure projects, the purchase or establishment or participation in Cypriot companies or businesses, or investment in alternative investment funds or financial assets in Cypriot companies or organisations. The latest amendment, focusing on enhancing due diligence procedures of applicants and adding the criterion of a donation to the Research and Innovation Foundation and the Cyprus Land Development Corporation will be applied from the 15th of May 2019. The main focus of the present article is on the consequences acquiring Cypriot citizenship through the Investment Programme in light of European Union (EU) law. One of the criteria for the acquisition of citizenship is the investment of 2 million euros in Cypriot banks, immovable property or companies which must be kept in Cypriot territory for at least five years, starting from the 15th of May. However, immovable property used for residence at the cost of minimum 500,000 euros must be kept in Cyprus forever, otherwise citizenship could be revoked. These criteria raise concerns, particularly in light of European Union law on Citizenship and the Free Movement of Capital. The possible violations of EU law and the conditional nature of the citizenship provided by the programme, which may result in violation of the free movement of capital and restrict the genuine enjoyment of the status of EU citizenship must be examined. Case law by the European Court of Justice and academic literature analysing the right to the free movement of capital and revocation of citizenship in an EU context will provide the tools to ascertain the repercussions of the Cyprus Investment Programme. This topic is extremely relevant today, as it sheds light on the developing nature of EU citizenship and the relationship between EU Citizenship rights weighed against the national interests of the Member States.
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Author: Sofya Kudryashova, PHC Tsangarides LLC
 Decision from the Proceedings of the Ministerial Meeting on 13 September 2016, ‘Cyprus Investment Programme’ on the basis of subsection 2 of Article 111A of the Civil Registry Law 114(I)/2002 and ‘Cyprus Investment Programme’ for family members of the naturalised investor according to the decision of the Council of Ministers, available in English on <https://www.moi.gov.cy/moi/moi.nsf/all/A0CAA99287BD0E9DC225806C002988D0/$file/SCHEME%20FOR%20INVESTORS%20NATURALISATION%2013.9.2016.pdf?openelement> accessed on 17 March 2018.
 Cyprus Investment Programme on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002 – 2019, available at <https://www.moi.gov.cy/moi/moi.nsf/all/B29724A670731EE2C22583B2002F2C48/$file/CYPRUS%20INVESTEMENT%20PROGRAMME_15.5.2019.pdf?openelement> (accessed on 03 May 2019); Extract from the Decision from the Proceedings of the Ministerial Meeting on the 13th February 2019, available in Greek at <https://www.cm.gov.cy/cm/cm_2013/cm.nsf/A6E630627C4A0F2FC22583AD003E501E/$file/86%20879.pdf> accessed on 03 May 2019.