Revised criteria for granting Cypriot citizenship by exception
As a result of the recent economic developments in Cyprus following the Eurogroup decision, the Cyprus Government through the Ministry of Interior has recently announced further relaxations to the already revised set of criteria for granting the Cypriot citizenship by exception to foreign investors, in an effort to restart the economy and promote foreign investment in Cyprus.
Criteria for granting the Cypriot citizenship by exception:
1. The applicant should purchase Government bonds worth at least Euro 5 million. These should come from the primary market, and not the secondary markets.
2. The applicant should have direct investments in Cyprus of at least €5 million, noting that
direct investments include but are not limited to:
a. Purchase of real estate (houses, offices, shops etc);
b. Acquisition of businesses/companies that are based and have activities in Cyprus;
c. Purchase of shares of companies registered in Cyprus;
d. Purchase of financial instruments (e.g. bonds and debentures registered and issued in the Republic of Cyprus);
e. Participation in a company/consortium that is in charge of the execution of a Government project.
Regarding conditions (a) to (d) above, the applicant must have in his/her possession the related investments for a period of at least three years. In case of a portfolio of shares or bonds, it should be ensured that the value of the portfolio during the three year period will not be less than the specified amount.
3. The applicant should have deposits in Cyprus banks amounting to €5 million, for a period of 3 years. The deposits can be either personal or deposits of his/her private entity or of a trust whereby the applicant is the beneficiary.
4. The applicant may choose to have a combination of:
a. Mixed investments and donations to a Governmental fund (criterion 1)
b. Direct investments (criterion 2)
c. Deposits to Cypriot banks (criterion 3)
The applicant should have a combination of the above, amounting to €5 million.
5. The applicant should have a direct investment in Cyprus of at least €5 million through the purchase, establishment or participation in businesses/companies that are based and have activities in Cyprus. Further, the above mentioned businesses/companies must be able to verify their physical presence in Cyprus and should employ at least five (5) Cypriot citizens.
6. Any foreigner who was the holder of deposits in the Bank of Cyprus and/or Laiki Bank and suffered an impairment in the value of his/her deposits of at least €3 million as at March 15th 2013, as a result of the measures imposed on the two banks.
In the instance that the foreigner has suffered an impairment in the above mentioned banks which is lower than €3 million, s/he may still apply for Cypriot citizenship provided that s/he invests the remaining amount (i.e. to sum up to €3 million) in mixed investments and donations to a Governmental fund (criterion 1) or in direct investments (criterion 2).
It is noted that in addition to satisfying any one of the above criteria, the applicant must:
a) Have a clean criminal record; and
b) Own a permanent residence in Cyprus of a market value at least €500,000(plus VAT).
In this respect, as of 28th of March 2014, the following relaxed criteria with regard to Citizenship by Investment shall be applicable:
(a) The applicant will be required to invest a reduced amount of €2.5 million in any of the above investments, on the basis that they are a participant in a collective investment scheme worth at least €12.5 million.
(b) The applicant will be required to invest a reduced amount of €2.0 million in any of the above investments, on the basis that they are a participant in a collective investment scheme worth in excess of €12.5 million. This provision (b) will apply until 1/6/2014.
A circle of advantages for moving in to Cyprus which admittedly allows for the lowest cost of living compared to similar destinations:
Permanent Residence Permit (PRP)
Criteria and Requirements
The Ministry of Interior has recently announced a new, more efficient procedure for granting an Immigration Permit to Third county nationals that intend to invest in Cyprus, provided that they fulfill certain criteria.
Criteria for granting the Immigration permit
According to the provisions of Regulation 6(2) of the “Aliens and Immigration” Regulations, Third country applicants must fulfill the following criteria:
a) The applicant must prove that s/he has at his/her disposal a secured minimum annual income (employment in Cyprus is strictly prohibited) amounting to €30.000. The minimum annual income is increased by €5.000 for each dependent person. The annual income should be derived from abroad and can include overseas employment income, pensions, rental income etc.
b) The application form (M.67) must be accompanied by a title deed or a contract of sale that has already been submitted to the Department of Lands and Surveys, for the acquisition of a house, apartment or any other building situated in Cyprus, of a minimum market value of
€300.000 (excluding VAT). Further, the applicant must submit proof of payment for at least €200.000 (excluding VAT) in respect of the above mentioned property.
As from 07 May 2013, the Immigration Authorities will only accept applications for granting immigration permits under Regulation 6(2), provided that the above mentioned property is being sold for the first time (i.e. applications regarding resale properties will not be permitted).
c) The applicant must submit a confirmation letter from a Cyprus Banking Institution that s/he has deposited a minimum amount of €30.000 which will beledged for a minimum period of three years.
Please note that the amounts mentioned in paragraphs (b) and (c) should be proven to have been transferred to Cyprus legally from abroad.
d) The applicant must submit a clean Criminal Record Certificate, issued by the relevant authorities in his/her country of origin and in general, s/he should not constitute a threat against public order in Cyprus.
e) The applicant must submit a statement confirming that s/he has no intention to work or be engaged in any form of business in Cyprus.
f) The applicant is required to visit Cyprus at least once every two years.
Provided that the criteria described above are fulfilled, the application shall be examined by the Minister of Interior in a positive spirit and the Immigration Permit shall be granted.
It is estimated that the period for examining the application under the new procedure shall not exceed 1-2 months.
Why is Cyprus the most attractive destination?
After a survey conducted by some of the most well-known property consultants worldwide, Knight Frank Lifestyle, Cyprus ranks as the 5th most popular spot for wealthy individuals. (see the full report here)
This report focuses on 23 destinations around the world and ranks them, placing Dubai on the winning bar. The large number of International schools in Dubai was deemed rather satisfactory, as well as recreational activities and the long hours of sunshine. Second place was taken jointly by Cayman Islands, Mallorca and Geneva, winning points on all ten lifestyle categories.
From the results, Cyprus is an attractive destination providing a warm, friendly place to be for people who wish to reside here or withdraw as pensioners in a country with a lot of sunshine.
Furthermore, tax coefficients in Cyprus may range from a very small tax to total tax exemption from foreign income or tax relief on local income. Cyprus possesses a pretty attractive tax regime with relevantly low taxation rates for earned income, capital gains tax, it is confined to immovable property placed in Cyprus, there is not tax for wills and succession of estate, neither withholding income tax on investments.
How our law firm can help
We at Prountzos & Prountzos LLC have a team of professionals dedicated to providing exclusive services in relation to the sectors of immigration policy and citizenship issues. Our specialists have extensive knowledge, understanding and experience of the immigration sector in Cyprus and will provide a wide range of services to ensure the best possible service for our clients.
Prountzos & Prountzos LLC provides clients with the following services:
• Legal Advice and Consultation on Immigration and/or acquiring Citizenship or Permanent Residence in Cyprus.
• Help in setting up all necessary documentation and submitting all certificates required for issuance of relevant citizenship or residence permits.
• Legal Representation at any stage of the process.
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