I. Updates on changes on the Cyprus Investment Programme
Pursuant to the recent decision of the Council of Ministers, adopted on 13.02.2019 in relation to the revision of the Cyprus Investment Programme (the “Decision”), the amendments are enforceable since the date of the Decision’s publication in the Government Gazette, ie on 26.02.2019, with the exception of specific provisions which the Decision expressly states that will be enforceable from 15.05.2019 onwards.
II. Aim of the Decision
The Council of Ministers adopted the Decision with the purpose of ameliorating the existing “Cyprus Investment Programme” (the “Programme
”) – for further details on the Programme, please refer to our detailed article on it, by clicking on the following link: http://www.pirilides.com/en/publication-detail/178/the-new-cyprus-investment-program
-, which in itself aims to encourage foreign direct investment and to attract high net worth individuals who wish to settle and operate their businesses in Cyprus, whilst enhancing the trustworthiness and efficiency of the Programme. The Decision introduces new criteria and terms based on which non–Cypriot investors and members of their families may submit applications.
According to the Minister of Finance, the rationale behind the changes purported through the Decision is to target and encourage the creation of an eco-system of business innovation as well as to facilitate the creation of finance for affordable housing through the mandatory contribution to the Cyprus Land Development Corporation whilst preventing any overgrowth of the real estate sector through such investments.
III. Significant provisions enforceable since 26.02.2019
1. The applicant should have made the necessary investments during the 3 (three) years preceding the date of the application and must retain the said investments for a period of at least 3 (three) years as from the date of the naturalization. It is understood that the investor may replace the investment during the said period, provided that he/she has obtained beforehand an approval by the Ministry of Finance.
2. An applicant who has applied for the acquisition of citizenship in any other Member State of the European Union and has been rejected will not be entitled to acquire Cypriot citizenship within the framework of the Cyprus Investment Programme. The same applies to the applicant’s adult family members (spouse, adult children, adult dependent children, parents).
For this purpose a Declaration of the applicant relating to the possible citizenship applications submitted to other EU Member States shall be provided in a duly signed and certified form. Given the immediate effect of the aforesaid provision, the aforesaid Declarations has to strictly accompany applications submitted from 18.03.2019 onwards.
3. Applications of dependent adult children of the applicant have to be accompanied with a due diligence report from an internationally acceptable electronic data base for which a relevant access fee is payable (eg. World Check, LexisNexis Diligence, Regulatory DataCorp Inc. etc). Such report must bear a date not older than 30 days from the date of its submission.
4. Reinstatement that the applicant should be in possession of a residence permit in the Republic of Cyprus for at least six (6) months prior to naturalization as a Cypriot citizen.
5. In relation to investment/participation in Cypriot businesses or companies, investments in the shipping sector may be eligible investments, based on specific measurable criteria that will be determined jointly by the Ministry of Finance and the Shipping Deputy Ministry and will be announced in due course. The requirement for employees of companies to have been residing in Cyprus for the five years preceding the submission of the application has been abolished.
6. In relation to investment in Alternative Investment Funds or Registered Alternative Investment Funds, it is now possible for such organisations to Funds to invest up to € 200,000 in Cyprus Stock Exchange’s secondary market.
7. In relation to the possibility of combining investments, the requirement of investing in government bonds has been removed, whereas such an investment is now considered as an ineligible investment for the purposes of the Programme.
IV. Significant provisions enforceable from 15.05.2019 onwards
1. Obligatory donations to the:
a. Foundation for Research and Innovation, of the amount of € 75,000, in order to promote the creation of an entrepreneurial innovation ecosystem.
The above obligatory donation can be waived under certain conditions, ie where the investor invests in an innovative business (which has acquired a relevant certificate by the ministry of finance) or in a certified social company or where the applicant has made an investment under the criterion "Purchase or Establishment or Participation in Cypriot Companies or Businesses" amounting to at least 20% of the investment cost of the prerequisite amount (ie € 400,000 ) to a company operating in the primary sector of the economy or in the secondary sector of the economy, or in one of the fields of research and technology, education, health, and renewable energy.
b. Cyprus Land Development Corporation, aiming at the contribution to the integrated housing policy, specifically for the purpose of implementing affordable housing projects and the implementation of other housing plans / measures.
2. Investments in the shipping sector may be eligible investments, based on specific measurable criteria that will be determined jointly by the Ministry of Finance and the Shipping Deputy Ministry and will be announced in due course.
3. Possibility for the Alternative Investment Funds or Registered Alternative Investment Funds in which an investor has bought units of at least €2,0 million to invest up to € 200,000 in Cyprus Stock Exchange’s secondary market.
4. In the case of residential units already used for the purposes of the Investment programme and are now reused under the same Programme, the provision stipulating that if the applicant has made investments in a residential unit (s) on the basis of criterion "Investments in Real Estate, Development and Infrastructure Projects" is not required to purchase another permanent private dwelling in the Republic of Cyprus if at least one of these dwellings is worth at least € 500,000 will be valid provided that the total investment, including privately owned, is at least € 2.5 million.
5. The period for which an investor is required to maintain the required investments has been increased from 3 years to 5 years from the date of naturalization.
6. In relation to the possibility of combining investments, the requirement of investing in government bonds has been removed, whereas such an investment is now considered as an ineligible investment for the purposes of the Programme.
7. Where the investment relates to the purchase of real estate or property as well as in the case of a property used as a permanent residency the following will be required:
a. Investment Plan for the development of the purchased land, if the investment involves the purchase of land under development.
b. Town-planning permit, provided that it is required by the Town and Country Planning Law.
c. Declaration by the mortgage lender in the benefit of whom the purchased property or properties is mortgaged that will waive the mortgage, provided that the investor or the seller will pay the lender the amount conscribed in the declaration (bank waiver).
d. Project completion certificate signed by the architect of the project. If the purchased property is under construction it is required either to maintain an amount equal to the 5% of the purchase value in a special account or for the seller to issue in the benefit of the purchaser a performance bank guarantee equal to the 5% of the purchase value. 3
8. The applicant must have a Schengen visa in order to be able to apply for naturalization.
9. An applicant who has applied for the acquisition of citizenship in any other Member State of the European Union and has been rejected will not be entitled to acquire Cypriot citizenship within the framework of the Cyprus Investment Programme. A Declaration to this extent, duly certified and signed by the applicant, as described above, shall be submitted with every application.
10. Reinstatement that the applicant should be in possession of a residence permit in the Republic of Cyprus for at least six (6) months prior to naturalization as a Cypriot citizen.
If the applicant does not already hold a residence permit, he will be able to apply for an immigration permit, on the basis of Regulation 6 (2) of the Aliens and Immigration Laws, at the same time as submitting the application for Naturalization, but be a holder of an immigration permit for a period of at least six (6) months prior to naturalization as a Cypriot citizen.
V. Registry of Service Providers of the Programme
In order to prevent abuse and on the basis of improving the application procedure, the Council of Ministers has launched in 2018 the Committee for Supervision and Control as well as the “Registry of Service Providers for the Cyprus Investment Programme”, to which our firm is duly registered. Therefore, from 01.08.2018 onwards applications will only be able to be submitted by registered Service Providers.
It should be noted that the decision on granting Cypriot citizenship pursuant to the Programme is dependent on the absolute discretion of the Cabinet of Ministers, whereas a granted naturalization may be revoked once a breach of any term or condition of the Programme is established following an inspection.
Investors wishing to apply for Cyprus citizenship using the above criteria and/or for any enquiries and questions please contact us at email@example.com and we will be happy to assist.