Residence & Citizenship by investment programs- A comparison of various EU jurisdictions

Author: N. Pirilides & Associates LLC
Date:2014-09-28
Nowadays ‘global citizenship’ is a growth market with large numbers of businessmen interested to acquire residence permits/passports in various countries around the world for different reasons i.e. tax issues, safety, insurance, career opportunities, better climate etc.
 
These people are looking amongst others for political stability, economic strength, availability of professional services, security, clear and transparent criteria for acquiring residence and citizenship, modern environments, quality of education.   
 
There is a choice of jurisdictions which provide different investment programs. Some of these jurisdictions on offer are Cyprus, Malta, Spain, Portugal and UK. 
 
 
Citizenship by investment- Cyprus
 
 
The applicant (i) must have clean criminal record, his/her name must not be included on the list of persons whose property is ordered to be frozen within the boundaries of the E.U. and that (ii) the applicant must hold a permanent privately-owned residence in Cyprus, the market price of which must be at least €500,000 plus VAT.
  • Investment in government bonds (of at least €5 million)
  • Investment in financial assets of Cypriot companies or organizations (of at least €5 million)
  • Investment in real estate, land development and infrastructure projects (of at least €5 million)
  • Purchase or creation or participation in Cypriot businesses or companies (of at least €5 million)
  • Deposits in Cypriot banks (local banks or subsidiaries of foreign banks) (fixed term deposits for three years of at least €5 million)
  • Combination of the aforementioned criteria amounting to at least €5 million
  • Persons whose deposits with the Popular Bank Public Company Ltd have been impaired due to the measures implemented after the 15th March 2013.  The applicant must have incurred impairment in deposits amounting to a total of at least €3 million.
  • Major Collective Investments
 
The Council of Ministers shall have the right on special occasions, to reduce the above criteria (Α.1, Α.2, Α.3 and Α.4): 
  • To €2,5 million for investors, who demonstrably participate in a special collective investment scheme, provided that the total value of the investment is at least €12,5 million. 
  • To €2 million for investors who demonstrably participate in a special collective investment scheme, provided that the total value of the investment is more than €12.5 millions. This provision will be in force until the 1st of June 2014.  This means that the application must be submitted until the 1.6.2014
 
 
Citizenship by investment- Malta
 
 
The applicant must either purchase a property in Malta of at least €350,000 or must rent a property for at least €16,000 per annum, both held for 5 years. 
  • Investment of at least €150,000 in bonds or shares again held for 5 years.
 
Donation of €650,000 for the principal applicant
Donation of €25,000 for the spouse and each child below 18
Donation of €50,000 for unmarried children between 18-25 and dependant parents over the age of 55.
 
Furthermore the applicant must have health insurance and to be entitled to apply for citizenship, the applicant must have resided for 12 months in Malta.   
 
 
Residence by Investment- Cyprus 
 
 
  • The applicant must prove that he/she has at his/her disposal a secured minimum annual income 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.  
  • The applicant must possess immovable property situated in Cyprus of a minimum market value of €300.000 (excluding VAT).
  • The applicant must submit a confirmation letter from a Cyprus Banking Institution that he/she has deposited a minimum amount of €30.000 which will be pledged for a minimum period of three years. 
  • Employment in Cyprus is strictly prohibited.
  • Availability of a clean Criminal Record Certificate   and Health Insurance. 
  • The applicant in required to visit Cyprus at least once every 2 years. 
  • The period for examining the application shall not exceed 1-2 months.  
 
Such residence holder may be able to apply to the Cyprus passport by naturalization if he/she has resided for a minimum of 7 years (2555 days) legally in Cyprus, of which the year preceding the date of application should be full and uninterrupted.
 
 
Residence by Investment- Malta
 
 
The qualifying criteria, which vary according to whether the individual seeking to obtain residence in Malta is an EU/EEA national or a third country national, can be easily complied with, thus making the attainment of Maltese ordinary residence attractive.
 
 
The High Net Worth Individuals Residency Scheme
 
  • Applicants are required to own a Qualifying Property Holding, being property in Malta purchased after the 1st January 2011 for a value of not less than €400,000. This must serve as the applicant's habitual residence and that of any dependants. Alternatively, an applicant may opt to rent property in Malta for not less than €20,000 per annum.  Such Qualifying Property Holding may not be let or sub-let.
  • Applicants must therefore be economically self-sufficient and both the applicant and any dependants must hold adequate health insurance covering the EU territory. The individual must satisfy a "fit and proper test" in order to be granted a permit under this scheme.
  • Applicant cannot reside in any other jurisdiction for more than 183 days per year. 
Such residence holder may be able to apply to the Maltese passport if he/she has resided in Malta for a minimum of 5 years. 
 
 
Residence by Investment- Spain
 
  • The Spanish residence permit legislation was enacted on 27 September 2013. Targeted to certain categories of individuals - investors, entrepreneurs, highly skilled professionals, researchers and to facilitate intercompany transfer of employees.
  • Spanish Law 14/2103 allows nationals of third countries satisfying some investment requirements to freely enter or even reside in Spain. It also allows freely travelling into other EU countries of the Schengen Area for a maximum period of 90 days every 6 months.
  • No minimum amount of time to be spent in Spain.
  • Third country nationals may obtain a Spanish visa valid for a term of one year that may be converted into a residence permit in Spain for a term of two more years; and renewable for subsequent terms of two years. The visa and residence permit can simultaneously be requested for dependants.
  • Applicant must have a clean criminal record and must be publicly covered for medical insurance or privately covered by an insurance company licensed to operate in Spain.
 
Specific requirements for investors 
 
A. Deposit of at least €1m in an account opened with a Spanish bank; or
B. Holding shares in a Spanish company for a value of at least €1m; or
C. Acquire Spanish public debt for an amount of at least €2m; or
D. Invest in Spanish public debt for an amount of at least €500,000 free of any liens and debts (any exceeding amount may bear liens and debts). This minimum amount can be invested in one or more properties; or
E. Develop a business or entrepreneurial project of national interest, which shall be resolved by taking into consideration the amount of jobs to create, relevant of the investment or of the scientific or technical innovation.
 
Such residence holder may be able to apply to the PR after 5 years and citizenship after 10 years of continuous residence in Spain.  
 
 
Residence by Investment- UK
 
 
The Tier 1 (Investor) program is available in the UK for those investors wishing to invest £1,000,000 or more in the UK.  Applicants must be from outside the European Economic Area (EEA) and Switzerland and they should fulfill certain economic criteria. 
 
Investments may be made into:
 
a) Government Bonds
b) Loan Capital (private & public companies)
c) Share Capital (private & public companies)
d) 75% in above investments, 25% in property/cash/other investments.
Such residence holder may be able to apply to the PR after 5 years and citizenship after 5 or 6 years of residence in the UK.  
 
 
Residence by Investment- Netherlands
 
 
The Netherlands offers Dutch residency permits to applicants wishing to invest at least €1.25 million in the Netherlands.  The measure aims to boost foreign investment.  The package which came into force in October 2013 allows foreign investors to move around the 25-nation Schengen zone freely, as the agreement allows holders of a residency permit of one country in the area to travel to any other.  The Dutch residence permit is issued for one year (initially), so that the request for extension can be later tested.
 
Investments may be in:
  • An innovative company
  • Joint venture that investment in innovative companies
  • Venture fund recognized by Minister of Economic Affairs
  • Venture capital fund affiliated to Dutch Association of Private Equity
 
For more information on the above programs, please contact us at info@pirilides.com. 

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