Citizenship by investment, which is the term widely coined for accelerated investment schemes which lead to alternative citizenship and a second passport with limited residency requirements, aims predominantly to entice foreign investors, entrepreneurs and high net worth individuals.
The reasons for obtaining an alternative citizenship and seeking residence solutions are many and the demands of today globalized world constantly keep on adding to that number. Whether it be to ensure a better quality of life and education, access to medical facilities, a back-up plan for times of political unrest, fiscal cliffs and estate planning or to facilitate investment and banking privacy, dual citizenship, passport and visa-free travel are nowadays ever more important for international clients and their families.
Cyprus was until 1960 a British colony and as with all commonwealth countries the fundamental areas of Cyprus law are, and to certain extent still remain, carbon copies of their respective English counterparts. As from 2004, Cyprus is part of the European family; it is an EU Member State. Its market economy is dominated by the services sector, which accounts for 76% of the GDP. Whilst financial services and tourism are the most important sectors, the recent discovery of vast deposits of natural gas and oil underwater in its exclusive economic zone is expected to pin down Cyprus as a major player in the energy field in the next five years. Despite the financial turmoil that has severely challenged mainland EU, Cyprus has preserved its corporate growth thus maintaining its long-standing average rate of 15.000 new company incorporations per annum, subjecting same to a flat corporate tax of 10%, which is the lowest in the EU.
In exchange for Cyprus (EU) citizenship and passport, Cyprus seeks to incentivize prospective investors and high net worth individuals to invest in and grow its economy. The eligibility requirements for the Cyprus citizenship by investment scheme are equally applicant and investment orientated.
As to the former, the applicant would need to be at least thirty (30) years of age and have a clean criminal record. Confirmation will further be sought that the applicant’s name is not included on the list of persons whose property is ordered to be frozen within the boundaries of the European Union. Last but not least, the applicant is required to have a permanently privately owned residence in the Republic of Cyprus, the value of which must exceed the amount of €500.000 at current prices.
As far as the investment side of the scheme is concerned, an interested applicant may elect either one of the following six broad mediums depending on his commercial/financial fluency:-
(i) Bank deposits
The applicant must have personal deposits in Cyprus banks, or deposits of privately owned companies, or of a trust (in which he is a shareholder), in the Republic of Cyprus amounting to a minimum of €15 million for at least a five year period. In this case, the application is expected to be endorsed by a Cypriot bank, confirming the existence of the applicants fixed term five year deposit; or,
(ii) Direct investments
The applicant must have direct investments in the Republic of Cyprus amounting to a minimum of €10 million. Direct investments may include, amongst others, purchase of immovable properties, businesses, companies, shares and financial assets; or,
(iii) Entrepreneurial activities
The applicant must have established/registered in the Republic of Cyprus a company (or companies) controlled by him with a total minimum turnover of €10 million per annum on average (in accordance with company/companies audited accounts) over the last three years preceding the year of the application and at least 1/3 of the applicants employees must be citizens of the Republic of Cyprus; or,
(iv) Introduction of new and innovative technologies
The applicant must prove that he has introduced on a large scale new and innovative technologies in vital/major sectors of the Cyprus economy or that he has established an important research centre for the conduct of research locally on a large scale; or,
(v) Direct income and/or remuneration for services
The applicant must have established a company or companies, the management of which is in the Republic of Cyprus and in the last three years preceding the year of the application to have paid into the Cyprus economy at least €500.000 on average per annum, either in the form of income tax/VAT payments and/or in the form of remuneration for the purchase of business services (legal, accounting, auditing, banking etc); or,
(vi) Combination of direct investments, entrepreneurial activities and deposits in Cypriot banks amounting to €15 million.
The complete application is reviewed by the Council of Ministers and their deliberation may take up to four months. If the application is approved, the applicant is naturalised and this leads to the immediate and lawful ownership of a Cyprus (EU) passport. Once Cyprus citizenship has been acquired, it is for life. Not only the applicant, but further his dependants, may enjoy full Cypriot (EU) citizenship for life, which can be passed on to a future generation by descent.
It should be noted that the applicant is not required to surrender any other citizenship and/or passport he may have, as dual citizenship and/or passport are permitted under Cyprus law. Furthermore, there is no requirement to sit any language aptitude or other local knowledge tests.
Prior to taking any decisions, potential applicants of the Cyprus citizenship by investment scheme are strongly encouraged to seek legal and tax advice from their country of origin, as well as from the Republic of Cyprus. Kindly note that long term residence and work permit schemes are also available in the Republic of Cyprus.
