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The Cyprus Investment Programme (updated 24/07/2020)
At the heart of Cyprus’ development strategy is to attract foreign direct investment.
In this respect the Cyprus Investment Programme, enables a non-Cypriot citizen, who meets the economic criteria of the Programme, to apply for the acquisition of the Cypriot citizenship.
The CIP is a regulated programme. The government has set up the Committee of Supervision and Control for the Cyprus Investment Programme who is the responsible body that oversees the programme and makes sure that potential investors are given correct and accurate information as to the criteria and procedure.
You can find the website of the Committe here: http://cipregistry.mof.gov.cy/en/
Key things to know are the following:
The applicant should have made the necessary investments during the three years preceding the date of the application and must retain the said investments for a period of at least five years as from the date of the naturalization. In the case where, following a periodic inspection, it has been established that a criterion, term or condition of the Programme has been breached, the granted naturalization may be revoked.
We explain the Cyprus Investment Programme by dividing the material in two sections. First by way of Q&A we answer the most common questions. On the second part we present in detail the investment criteria.
A. The Cyprus Investment Programme – Questions and Answers.
What is the minimum investment required?
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 (residential or commercial developments, developments in the tourism sector or other infrastructure projects).
Is there a time limit? Yes.
The applicant should have concluded the necessary investments during the three years preceding the date of the application and must retain the said investments for a period of at least five years since the date of the Naturalization.
For example, if the applicant will submit an application in 2020, the investment must have been concluded during the period 2017– 2020.
Furthermore, the investor is obliged to retain the investment for at least five years following the acquisition of the Cypriot citizenship. The five year period begins on the date of the approval of the application by the Council of Ministers.
What are the terms and conditions?
1. Clean Criminal Record: the applicant must have a clean criminal record. Furthermore, his name must not be included on the list of persons whose property is ordered to be frozen within the boundaries of the European Union.
2. Residence in the Republic of Cyprus: The applicant must hold a permanent privately-owned residence in the Republic of Cyprus, the purchase price of which must be at least €500.000, plus V.A.T.
It is noted that members of the same family, which apply separately as investors, can collectively acquire a residence, provided that the total value of this home-property covers the amount of € 500.000 per each applicant.
It should be noted that, if the investments are made into residential property(ies), this requirement is not applicable.
What documents are required?
1. Form M127
2. Certificate of Clean Criminal Record from the country of origin and the country of residence (if it differs).
3. Contract of Sale.
4. Title Deeds/ Receipt for lodging the contract with the Lands and Surveys Department
5. Receipts for paying the agreed purchase price
6. Copy of the wire transfer in the Cypriot commercial banking institution in the name of the seller or the seller’s company
Does the spouse or the children of the applicant acquire Cypriot citizenship?
Yes. The programme provides that the spouse of the applicant as well as his financially dependent adult children (eighteen years old or above) acquire citizenship without the obligation to meet any financial criteria.
Is there a filing fee? Yes. Every application must be accompanied by a filing fee of €2000. This applies for the applicant, his spouse and his adult children. For minors the filing fee is €80. Once the citizenship is granted there is a certificate issuance fee of €5000 per adult.
What is the time frame for the examination of an application? Approximately 12 months.
Can the investor use a company to make the investment? Yes. An investment through a company or fund or foundation is eligible, provided that there is a proven correlation between the investor and the company or fund or foundation.
Does the purchase of land alone satisfy the criteria? No. In order for an applicant to satisfy the requirements he must invest in the purchase or construction of buildings, or the creation of other land developments (residential or commercial developments, in the tourism sector or other infrastructure projects). Also see “B. ECONOMIC CRITERIA” below.
When do I become the property owner? Once a contract of sale for immovable property is signed and at least 30% of its value is paid the contract is deposited at a public agency – Land District Office. As a result you become property Owner.
Is the VAT included in the amount of the €2 million investment or in the amount of the €500.000 purchase value of the privately-owned residence? No. The VAT is not included in the amount of €2 million for the “Direct Investments”, neither in the amount of €500.000 required as a minimum purchase value of the privately-owned residence.
Are transfer duties included in the amount of the €2 million investment? The transfer duties are not included in the amount of the investment, as no other charges or taxes are.
If there is a difference between the market value and the purchase value of a real estate, which amount is taken into consideration? The purchase value.
Can real estate sold for a second time be considered as an investment for the purposes of applying for citizenship? According to the contents of the Council of Ministers’ Decision, the eligible investment is not limited to properties purchased for the first time.
Is the purchase value of the privately – owned residence included in the investment or is it additional? Yes provided that the applicant’s application is based on the acquisition of real estate in Cyprus and not on any other basis.
Can the investor rent to someone else his/ her privately-owned residence? Yes, he/ she may.
Can the investor sell his/ her privately-owned residence and purchase a different one of the same or higher purchase value? Yes, he/ she may, provided that he/she will buy a different residence of equal or higher purchase value.
To what degree of relation can applicants – relatives, who are members of the same family, purchase the same privately-owned residence? To the second degree.
B. Economic Criteria In Detail.
Within this framework and taking into account the strong investor interest, the Government of Cyprus has established and revised the “Cyprus Investment Programme” (Programme) on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002-2019, with specific incentives, terms and conditions and control procedures in order to prevent abuse.
Β.1 Donation to the Research and Innovation Foundation and the Cyprus Land Development Corporation:
(a) The applicant must have donated at least €75.000 to the Research and Innovation Foundation. It is noted that if the applicant wishes to donate an amount higher than the minimum of €75.000, this additional amount can be used for purposes of supplementing the total amount of the investment made on the basis of the criteria B.2-B.5.
Furthermore, the aforementioned obligation is lifted, if the applicant has invested at least €75.000 in a certified innovative enterprise (i.e. an enterprise that had acquired the relevant certificate by the Ministry of Finance) or a certified social enterprise.
In addition, the obligation is lifted, if the applicant has made an investment under the criterion B.3 (Purchase or Establishment or Participation in Cypriot Companies or Businesses) of a total amount equal to the 20% of the required investment amount (i.e. €400.000) of the abovementioned criterion B.3 in a company whose operations fall within the primary sector of the economy, or the secondary sector of the economy (excluding constructions), or in the sectors of research and development, education, health and renewable energy sources.
(b) The applicant must have donated at least €75.000 to the Cyprus Land Development Corporation for the financing of housing schemes for affordable housing, but also for the materialization of other housing schemes/measures. It is noted that if the applicant wishes to donate an amount higher than the minimum of €75.000, this additional amount can be used for purposes of supplementing the total amount of the investment made on the basis of the criteria B.2-B.5.
Β.2 Investment in real estate, land development and infrastructure projects:
The applicant must have made an investment of at least €2,0 million for the purchase or construction of buildings or for the construction of other land development projects (residential or commercial developments, developments in the tourism sector) or other infrastructure projects.
It is noted that investment in land under development is included in this criterion, provided that an investment plan for the development of the purchased land will be included in the application. It is understood that investment in land that is situated in a building zone of zero development, is excluded.
Β.3 Purchase or Establishment or Participation in Cypriot Companies or Businesses:
The applicant must have invested at least €2,0 million for the purchase or participation in companies or organizations established and operating in the Republic of Cyprus with investment costs of. The invested funds shall be channeled towards the financing of the investment objectives of these companies exclusively in Cyprus, based on a specific investment plan. Moreover, investments in the shipping sector are eligible on the basis of measurable criteria that will be determined jointly by the Ministry of Finance and the Shipping Deputy Ministry.
The applications shall be evaluated to verify that the companies or organizations have proven physical presence in Cyprus, with significant activity and turnover and employ at least 5 (five) Cypriot citizens or citizens of European Union member-states. The minimum number of employees shall increase, if more than one applicant invest simultaneously or almost simultaneously in the same business or company.
B.4 Investment in Alternative Investment Funds or Registered Alternative Investment
Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by Cyprus Securities and Exchange Commission : The applicant should have bought units of at least €2,0 million from alternative investment funds (AIF) or Registered Alternative Investment Funds (RAIF) established in the Republic of Cyprus, licensed/registered and supervised by the Cyprus Securities and Exchange Commission (CySec) and whose investments are made exclusively in the Republic of Cyprus, in investments that meet the criteria of this Programme or in areas approved by the Minister of Finance. It is permitted for these AIFs or RAIFs to invest in secondary market stock-market values of the Cyprus Stock Exchange an amount that does not exceed the €200.000.
In order to confirm that the investments that meet the criteria of the current Programme will be retained for at least 5 (five) years, the manager or the auditor of the Fund shall inform in writing and on an annual basis, the Ministry of Finance with reference to the value of the initial investment.
The purchase of financial assets of Cypriot companies or organizations of at least €2,0 million, such as bonds, bills and securities, issued with the approval of the CySec, by companies that have proven physical presence and substantial economic activity in the Republic of Cyprus, and have as a purpose the financing of the investment plans of these companies or organizations exclusively in Cyprus, based on an investment plan, fall under this criterion.
It is noted that the purchase by an AIF or RAIF of units of other AIFs or RAIFs is not considered eligible.
B.5 Combination of the aforementioned investments:
The applicant may proceed with a combination of the above investments, provided that the total investment will amount up to at least €2,0 million.
C. TERMS AND CONDITIONS
1. Clean Criminal Record: the applicant must have a clean criminal record. Furthermore, his/her name must not be included in the list of persons whose assets, within the boundaries of the European Union, have been frozen as the result of sanctions.
Moreover, an applicant whose application for citizenship in any other member-state of the European Union had been rejected, is not eligible to apply for the acquisition of the Cypriot citizenship through the Cyprus Investment Programme.
2. Schengen Visa: The applicant must hold a valid Schengen visa. Third-Country nationals that do not require an entry visa for travelling in European Union member-states, as well as citizens of European Union Member States are excluded from this obligation.
It is noted that all the aforementioned in paragraphs 1 and 2 also apply for the family members of the investor that are eligible to apply for the acquisition of Cypriot citizenship.
3. Residence in the Republic of Cyprus: In all cases listed in Part B, the applicant must possess a permanent privately-owned residence in the Republic of Cyprus, the purchase price of which must be at least €500.000, plus V.A.T.
It is noted that members of the same family, who apply separately as investors, can collectively acquire a residence, provided that the total value of this home-property covers the amount of €500.000 per each applicant.
In case that the purchase value of the permanent privately owned residence in Cyprus exceeds the amount of €500,000, this additional amount can be used for purposes of supplementing the total amount of the investment made on the basis of the criteria of Part B above.
Additionally, it is noted that if the applicant has invested in housing unit/units on the basis of the aforementioned criterion B.2, the purchase of another permanent residence in Cyprus will not be required, if at least one of these housing units is worth at least €500,000, plus VAT, provided that the applicant retains the possession of the residence for life.
However, if the applicant has invested in housing units that have already being used for the purpose of acquiring the Cypriot citizenship via the Programme, the above provision will be in force provided that the total amount of the investments, including the privately-owned residence, is at least €2,5 million.
4. Residence Permit in Cyprus: The applicant, prior to his/her naturalization as a Cypriot citizen must hold a residence permit in Cyprus for a period of at least 6 (six) months.
If the applicant does not already hold a residence permit, he/she may apply for an immigration permit on the basis of Regulation 6(2) of the Aliens and Immigration Law, simultaneously with the application for naturalization. The applicant, prior to his/her naturalization as a Cypriot citizen must hold a residence permit in Cyprus for a period of at least 6 (six) months.
If the application for acquiring an immigration permit is made solely for purposes of acquiring the Cypriot citizenship, in accordance with the provisions of this Programme, there are no other conditions than those stated in both Part B and Part C of this Programme.
It is noted that all of the above also apply for the adult members of the family of the investor, who will apply for naturalization.
In case the application for naturalization is rejected for any reason, the immigration permit, obtained in accordance with the provisions of this decision, will be cancelled immediately.
D. How can we help?
Our law firm can assist a prospective applicant and provide guidance in all stages of the procedure.
• We can recommend reliable tax and investment advisors that will provide an applicant with the relevant analysis of the investment criteria that the foreign investor may elect, depending on his/her personal circumstances;
• We can advise on the application process and all required documents that must accompany each investment option;
• Prepare the application package;
• Submit the application form on behalf of the client, together with the supportive documentation and the payment of the relevant submission fee;
• Following the submission of the application our team continuously monitors the status of the application in order to ensure that it is properly progressing and provide additional documentation/ clarifications if required by the Cyprus Authorities.
Contact us now at firstname.lastname@example.org and we will revert the soonest with answers to all your questions