Permanent residency in Cyprus. Q&A Guide.

We have compiled this Q&A Guide about permanent residency applications to address questions usually  raised by clients.

Updated 04/07/2017

 

1. Main differences between going through the Fast Track and the Slow Track

The main differences are concerning the requirements for each way of obtaining the Permanent Residency and the time needed to complete each procedure.

In particular, there are two ways of obtaining the Permanent Residency in Cyprus:

A. Category F (Regulation 5(f)) – Slow track.

Can be completed within 12 months (approximately).

Requirements:

i. The applicant is required to have purchased a property residence for himself and his family in Cyprus and have in his disposal fully and freely a secured annual income, high enough to give them a decent living in Cyprus without having to engage in any business, trade or profession. This income must come from legal sources from abroad (pensions, permanent deposits, business activities, stocks, company shares etc.)

ii. The minimum annual income required is €9,568.17 for a single applicant and €4,613.22 for every dependent person, but the Civil Registry and Migration Department may demand additional amounts as necessary. These additional amounts might consider annual maintenance expenses of the property, educational, medical and other needs of the family. It is necessary to take all needs of the family of the applicant and to offer solid evidence that the applicant is able to cover all those needs on the long run.

iii. The Immigration Authorities will examine the stability and reliability of annual income during a long period of time. The possession of a solid amount of money, deposited in one of the banks of Cyprus might facilitate the application.

B. Fast Track Procedure (Regulation 6(2)).

Can be completed within 3 months (approximately).

Requirements:

i. The applicant must have in his disposal fully and freely a secured (for 3 years) annual income of €30,000 increased by €5,000 for each dependent person, from legal sources other than employment in Cyprus. It may derive from salaries of employment from abroad, pensions, rents, dividends, etc. The applicant must also submit a confirmation letter from a Cyprus bank stating that the funds were imported from abroad and have been placed in a 3-year fixed deposit account.

ii. The applicant is required to have purchased a new (not resale) property residence for himself and his family in Cyprus of no less than €300,000 (before VAT) and the vendor must be the Developer who built this property. It is possible to buy two properties, as long as they are both new and from the same Developer, such as:

– House (or apartment) + house (or apartment)
– House (or apartment) + shop up to 100 m2
– House (or apartment) + office up to 250 m2

iii. The applicant must not constitute in general, a threat against public order or security in Cyprus and must therefore have a clean criminal record.

2. What is the minimum investment required when going through the Slow Track and also the Fast Track?

A. Category F (Regulation 5(f))- Slow track.

There is not a minimum amount regard the investment.

There is a requirement only for a fully and freely secured annual income of minimum €9,568.17 for a single applicant and €4,613.22 for every dependent person (but the Civil Registry and Migration Department may demand additional amounts as necessary).

B. Fast Track Procedure (Regulation 6(2)).

No less than €300,000 (before VAT) & fully and freely secured annual income of €30,000 increased by €5,000 for each dependent person, from legal sources other than employment in Cyprus.

3. Is the size of the investment (residence) directly related to the number of people applying? Meaning a family of 5-6 people how many bedrooms are needed? And does this apply to both tracks?

As regards the size of the residence, it is not related to the number of people applying.

However, the size of the amount invested it is related to the no. of people applying and also to the status of the children of the family.

For example as regards the fast track procedure, this means that an Immigration Permit may also be granted to children of the applicant over the age of 18, who are not financially dependent on the applicant, provided that the market value of the acquired real estate attributed to each such child is at least €300.000 (excluding V.A.T.), (e.g. in the event the applicant has a child that is 30 years old and wishes to obtain an Immigration Permit, the applicant must purchase real estate valued at €600.000, if the applicant has two (2) adult children, financially independent, he/she must purchase real estate valued at €900.000 etc). In such an event a payment confirmation for the 66% of the market value of the real estate must be submitted with the application (e.g. €400.000 for real estate of a market value of €600.000). It is noted that the purchase of the real estate must be made solely in the name of one or/and both parents, or solely on the child or on both parents and the child.

Provided that in such an event each child shall submit the necessary documentation with his/her application (e.g. secured annual income of €30.000, a deposit in a financial institution in Cyprus amounting to €30.000, which is bound for 3 years).

4. What is the length needed to obtain the permanent residency when applying through any of the tracks?

A. Category F (Regulation 5(f)).
12 months (approximately).

B. Fast Track Procedure (Regulation 6(2)).
3 months (approximately).

5. Once the permanent residency is obtained, is there a period that the applicant must come to Cyprus to be eligible for renewal? If yes, how long it is?

When the application is successful the investor must come to Cyprus at least once every 2 years for the Permanent Residence visa not to be cancelled.

If the applicant visits Cyprus at least once every 2 years otherwise the Permanent Registration is granted indefinitely. Although Cyprus is legally bound to join the Schengen area, it has delayed implementation.

For now, third national Permanent Residency holders still require a travelling visa to other European destinations

It is noted that the alienation of the purchased property without an immediate replacement with another property, of the same or/and higher value and in accordance with the conditions of this procedure, (i.e. sold for the first time by a development company), will result to the cancellation of the Immigration Permit pursuant to the provisions of Regulation 6(2) of the Aliens and Immigration Regulations.

Therefore, the applicant must state that his/her permanent residence is in Cyprus.

Otherwise, the permit is revoked when the holder is granted a permanent residence permit in another country (other than the country of his nationality) or when he does not visit Cyprus for a period of two consecutive years.

A. Category F (Regulation 5(f)).

The permit is renewed every five years and exempts the holder from immigration entry procedures.

B. Fast Track Procedure (Regulation 6(2)).

Life-long validity without renewal.

6. Do the kids keep the permanent residency after they reach 25 years of age in both tracks?

A. Category F (Regulation 5(f)).

Yes, but it must be proven that the adult child is still a dependent. If the child is under 18 years old then he/she has to apply separately and his/her application will be examined by a Committee.

B. Fast Track Procedure (Regulation 6(2)).

Unmarried children aged between 18 and 25, who prove that they are students in an institution of tertiary education abroad with at least six months of remaining study period from the date of the submission of the application and, furthermore, that they are financially dependent on the applicant, may submit a separate application to obtain an Immigration Permit with the payment of the relevant fee.

In such a case, the father or mother and/or both parents together must present an additional annual income of €5.000 for every such dependent child.

It is noted that every such dependent child, shall submit with his/her application, all the documentation defined in the relevant list.

The said permit is still valid even if the holders have exceeded the age of 25 years old and even if they do not remain unmarried and/or students and/or financially dependent on their parents.

It is noted that their future spouses or underage children cannot be included as dependent persons on this permit.

If children wish to study in an institution of tertiary education in the Republic, they have to submit through the institution an application for acquisition of a temporary residence permit in the Republic as students, according to the provisions of the relevant legislation (EU Directive). After the completion of their studies in the Republic, these children regardless of their age, will be able to submit their own application to obtain an Immigration Permit, as it is described above, with the condition that their parents present only an additional annual income of €5.000 for every such child.

An Immigration Permit may also be granted to children of the applicant over the age of 18, who are not financially dependent on the applicant, provided that the market value of the acquired real estate attributed to each such child is at least €300.000 (excluding V.A.T.), as described in para. 2.3 hereinabove, (e.g. in the event the applicant has a child that is 30 years old and wishes to obtain an Immigration Permit, the applicant must purchase real estate valued at €600.000, if the applicant has two (2) adult children, financially independent, he/she must purchase real estate valued at €900.000 etc).

In such an event a payment confirmation for the 66% of the market value of the real estate must be submitted with the application (e.g. €400.000 for real estate of a market value of €600.000). It is noted that the purchase of the real estate must be made solely in the name of one or/and both parents, or solely on the child or on both parents and the child.

Provided that in such an event each child shall submit the necessary documentation with his/her application (e.g. secured annual income of €30.000, a deposit in a financial institution in Cyprus amounting to €30.000, which is bound for 3 years).

7. Are you able to sell the residence after you obtain the permanent residency or is it directly connected to the permanent residency?

The residence is directly connected to the permanent residency.

The alienation of the purchased property without an immediate replacement with another property, of the same or/and higher value and in accordance with the conditions of this procedure, (i.e. sold for the first time by a development company), will result to the cancellation of the Immigration Permit.

Therefore, the applicant must state that his/her permanent residence is in Cyprus.

Otherwise, the permit is revoked when the holder is granted a permanent residence permit in another country (other than the country of his nationality).

8. Are you able to rent the residence?

Yes.

9. Are you able to purchase residences that are not new and that are not from a certified developer in both tracks?

A. Category F (Regulation 5(f)).

Yes.

B. Fast Track Procedure (Regulation 6(2)).

The applicant is required to have purchased a new (not resale) property residence for himself and his family in Cyprus of no less than €300,000 (before VAT) and the vendor must be the Developer who built this property.

It is possible to buy two properties, as long as they are both new and from the same Developer, such as:

– House (or apartment) + house (or apartment)
– House (or apartment) + shop up to 100 m2
– House (or apartment) + office up to 250m2

In the case of a couple, these restrictions apply for the couple and not for each of the persons involved.

The said purchase must be in relation to a property (and the combinations described above) sold for the first time by a development company. In the case of acquiring two dwellings, both must be sold by the same development company. As from 7/05/2013, for the purpose of this policy, applications in relation to the re-sale of dwellings will not be accepted. It should be stressed that sale contracts in relation to a re-sale of dwellings that have been officially filed at the Lands and Surveys Department prior to 07/05/2013 (the date of filing the sale contracts is to be confirmed by the Department of Lands and Surveys), shall be accepted for the purpose of implementing this policy.

10. Are you able to obtain a loan from the Bank to purchase the residence?

The main requirement is that the investment and the income must come from legal sources from abroad (pensions, permanent deposits, business activities, stocks, company shares etc.) regardless the fact that it may be a product of loan.

This means that the applicant may obtain a loan but not straight from a Cyprus Bank.

11. What are the fees including the VAT to purchase ONE house or TWO houses? And does this change if you have both the Man and his spouse as the owners?

A. Category F (Regulation 5(f)).

There is not a minimum amount regard the investment.

B. Fast Track Procedure (Regulation 6(2)).

No less than €300,000 (before VAT).

In the case of a couple, these restrictions apply for the couple and not for each of the persons involved.

VAT in Cyprus is 19%.

However, the applicant can apply before the Ministry of Finance for a reduced VAT rate of 5% following his agreement with the developer or the seller.

12. Are there any specific residences with a different VAT applied? Meaning (Zone A has 2.5%, Zone B has zero%)?

No.

13. When going through the fast track can you mix your investment e.g. (2 Residences OR 1 Residence + 1 Land or commercial property)?

It is possible to buy two properties, as long as they are both new and from the same Developer, such as:
– House (or apartment) + house (or apartment)
– House (or apartment) + shop up to 100 m2
– House (or apartment) + office up to 250 m2

14. Can you please list the current countries that the holder of the permanent residency can enter without the need for a Visa?

Although Cyprus is legally bound to join the Schengen area, it has delayed implementation.

For now, third national Permanent Residency holders still require a travelling visa to other European destinations.

15. Can you work in any of the countries above?

Holders of this permit are not entitled to work in Cyprus but they may own a Cyprus company and receive dividends from its profit.

16. What are the benefits obtained once you hold the permanent residency e.g. Education for kids, Medical Care, Tax Exemption etc?

• No language requirements
• Lower tuition fees for non-EU Cypriot permanent residence permit holders, as they are considered permanent residents of an EU country
• Cyprus is a common law jurisdiction
• Property acquired is freehold
• Low crime rate in Europe
• No inheritance tax
• Low property tax

17. Are you able to apply for the citizenship after you obtain the permanent residency and what is the rules to do that?

Permanent Residence holders can apply for a Cyprus passport after seven years. Once 30% of the deposit of the property value has been paid the application can be made.

However, an investor can apply for a Cyprus citizenship simultaneously with the application for a residence permit if he/she meets the criteria below:

i. Eligibility:

The following non-Cypriot natural persons who meet of the set financial criteria are eligible to apply for the acquisition of Cypriot Citizenship:

• Natural persons, either personally of through a company in which they are participating as shareholders, in proportion to their holding percentage.
• Through investments made by their spouse or jointly with the spouse.
• As high-ranking senior manager of a company that meets one of the financial criteria below (provided that the receive a remuneration that generates paid tax revenues of at least €100.000 over three years).

ii. Financial Criteria:

Eligible persons who meet one of the following financial criteria may apply for the acquisition of the Cypriot Citizenship:

• Investment in real estate, land development and infrastructure projects of at least €2m.
• Investment in financial assets of Cypriot companies or organizations of at least €2m.
• Investment in Alternative Investment Funds or financial assets of Cypriot companies/organizations that are licensed by the Cyprus Securities and Exchange Commission of at least €2m.
• Combination of the above criteria, which can also include investment in government bonds of up to €500.000.

iii. Other Terms and conditions

• Prior to the naturalization, investors must hold a residence permit in Cyprus. If not, the application for a residence permit can be submitted simultaneously with the application for the naturalization.
• In addition to the above investment requirements, an investor must also own a permanent privately-owned residence in Cyprus of at least €500.000 (+VAT). If investment is made into residential properties, as per the first financial criterion, this requirement is not applicable, if at least one of the units is worth at least €500.000 (+VAT), provided that the applicant retains the possession of the residence for life.
• The investment in government bonds is restricted to €500.000.
• There is no requirement of residing in Cyprus after acquiring citizenship.

iv. Family Members:

• Spouse/ partner: The investor’s spouse or partner may acquire the Cypriot Citizenship. Their application may be filed simultaneously
• Minor children: Dependent children up to the age of 18 may apply, after the investor acquires the Cypriot Citizenship and provided that the other parent consents to the grant of the citizenship
• Adult financially dependent children: the right to apply for citizenship is also granted to the financially dependent adult children of the investor belonging to one of the following two categories:
– students up to the age of 28
– children with severe physical/ mental disability that prohibits employment
• Parents: The investor’s parents may also apply for citizenship after the investor has acquired his/her citizenship, provided that they are owners of a private residence of at least €500.000 (+VAT). The investor and his/ her parents may collectively acquire one residential property of a total value of at least €1m (+VAT).

18. What are the real fees ?

Real fees: approximately €600 for each application

 

For more information contact our law firm at office@lawyer.com.cy

Permanent residency in Cyprus. Q&A Guide. by
Stephanie Papaioannou
About the Author
Stephanie Papaioannou

Graduate of the department of Law of Aristotle University of Thessaloniki , Greece, (LL.B.) , (LL.M) in International Law with Specialization in International Economic Law and Private International Law.

Speak Your Mind

*