New Improved Criteria for Citizenship by Exception
On Friday, 16th of September 2016, the Cyprus Government revised the economic criteria and conditions of the Scheme for Cyprus citizenship by investment (the “Scheme”) so as make it more attractive for non-Cypriot investors wishing to acquire Cypriot Citizenship.
The most important change is that an applicant is, now, only required to make an investment of €2.000.000, instead of €5.000.000 as had previously applied. The required investment can be in real estate, tourism and infrastructure projects or in shares or financial instruments of companies operating in Cyprus, including investment in Alternative Investment Funds. The Scheme also allows the investment in Cyprus Government Bonds for a maximum amount of €500.000.
Our office offers comprehensive services that cover the whole process in terms of advising you on the choice of investment and in preparing and drafting all the relevant agreements and taking care of your application.
We set out below an official abridged translation into English of the relevant decision of the Council of Ministers.
DECISION OF COUNCIL OF MINISTERS NUMBER 834
A non-Cypriot citizen, who satisfies one of the following economic criteria (A), either personally or through a company/companies in which he/she participates as a shareholder - proportionally based on his/her percentage of participation, or through investments made by his/her husband/wife or through investments that he/she has made, jointly with his/her husband/wife, or even as a high-ranking senior manager of a company/companies that meets one of economic criteria set out in Part A below, may apply for the acquisition of Cypriot citizenship through naturalization by exception.
A high-ranking senior manager may apply, provided that he/she receives such a remuneration that generates tax revenue for the Republic of Cyprus of at least €100.000 over a three year period and provided that this tax has already been paid or prepaid.
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 three years from the date of the naturalization.
In addition, the application must fulfill the Terms and Conditions set out in Part B hereof.
A. ECONOMIC CRITERIA:
Α.1 Investment in real estate, land development and infrastructure projects:
The applicant is required to have made an investment of at least €2.000.000 through the acquisition or construction of real estate/buildings or for the development of other real estate projects (including residential or commercial developments, developments in the tourism sector or other infrastructure projects).
Please note that this criterion includes investment in land which can be developed, provided that an investment plan for the development of the land is included in the application. This means that this criterion excludes the investment in land which is situated in a zero growth development zone.
A.2 Purchase or creation or participation in Cypriot businesses or companies:
The applicant is required to have made an investment of at least €2.000.000 in the purchase, creation or participation in businesses or companies that are based and operating in the Republic of Cyprus. The said investment funds must be specifically directed towards financing the investment purposes of the said businesses and companies exclusively and solely in the Republic of Cyprus on the basis of a business plan.
The applications will be examined to ensure that the businesses or companies are proven to have a tangible presence in the Republic of Cyprus, have substantial activity and a significant turnover and that they employ at least five (5) Cypriot citizens or citizens of the European Union. The minimum number of employees required to satisfy the criteria will be increased in cases where more than one applicant invests simultaneously, or almost simultaneously, in the same business or company. In addition, the said employees are required to have had permanent and continuous residence in the Republic of Cyprus during the immediate preceding period of five (5) years prior to date of the submission of the application.
A.3: Investment in Alternative Investment Funds (AIFs) or financial instruments/assets of Cypriot businesses or companies or Cypriot organisations licenced by the Cyprus Securities and Exchange Commission:
The applicant is required to have made an investment of at least €2.000.000 in units in AIFs which are incorporated in the Republic of Cyprus and are licensed and regulated by the Cyprus Securities and Exchange Commission, and which make investments solely in the Republic of Cyprus, in investments which fulfill the criteria of this Scheme, or in sectors which are approved by the Minister of Finance.
For the purpose of ensuring that the investments which fulfill the criteria of the present Scheme will be maintained for a period of at least 3 years, the manager or the auditors of the AIFs will inform in writing the Ministries of Interior and Finance with regards to the value of the initial investment on a yearly basis.
It is noted that the acquisition of financial instruments/assets of Cypriot businesses or companies or organisations of a value of at least €2.000.000, such as bonds and securities, which have been issued, following due authorization from the Cyprus Securities and Exchange Commission, by companies which evidently have a tangible presence and substantial economic activity in the Republic of Cyprus and which relate to the financing of the said businesses or organization, for investment purposes exclusively in the Republic of Cyprus on the basis of a business plan.
It is noted that the acquisition of AIFs units of other AIFs does not fulfill the purposes of the present criterion A.3.
A.4: Combination of the above investments:
The applicant is able to proceed to a combination of the above investments, provided that his/her total investment will amount to at least €2.000.000.
Under the combination of investments option, the applicant can proceed to purchase government bonds issued by the Republic of Cyprus up to a value of €500.000 which are issued by the Public Debt Management Office of the Ministry of Finance under the condition that the applicant will keep the said bonds in his/her possession for at least three (3) years. The characteristics and terms of the said bonds are determined by the applicable General and Specific Terms of Issuance of government bonds of the Republic of Cyprus issued from time to time. Investment in secondary market bonds will not be accepted.
B. TERMS AND CONDITIONS
1. Clean Criminal Record: The applicant must have a clean criminal record. Additionally his/her name must not be included in the list of people against whom a freezing order over their assets has been issued within the European Union.
2. Owner of Permanent Residence in the Republic of Cyprus: In all cases listed in Part A, 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 plus V.A.T. per each applicant.
In cases where the purchase price of the permanent privately-owned residence in the Republic of Cyprus exceeds €500.000 plus V.A.T., part of the additional amount can be used for the purposes of completing the amount of investment which has been invested in accordance with the criteria set out in Part A above.
Additionally, it is noted that, in cases where the applicant has proceeded with investment in residential property/properties on the basis of the above mentioned criterion A.1, he/she will not be required to proceed with the purchase of an additional permanent privately-owned residence in the Republic of Cyprus, if at least one of the residential properties is worth at least €500.000 plus V.A.T. and provided that he/she will keep in his/her possession the said permanent privately-owned residence for the rest of his/her life.
3. Residence in Cyprus: Prior to his/her naturalisation as a Cypriot citizen, the applicant must be the holder of a residence permit in the Republic of Cyprus.
In cases where the applicant is not already the holder of a residence permit, the applicant will be able to submit an application for an immigration permit on the basis of Regulation 6(2) of the Aliens and Immigration Law Cap 105, simultaneously with the submission of the citizenship application. It is noted that there shall be no additional requirements other than those provided for in Part A and Part B of the present Scheme will be required for the submission of an application for the immigration permit exclusively for the purpose of obtaining Cypriot citizenship in accordance with the provisions of this Scheme.
It is noted that the above requirements are also applicable for adult members of the family of the investor who may wish to apply for Cypriot citizenship.
In cases where the application for citizenship is rejected for whatever reason, the immigration permit which was granted in accordance with the present decision will be immediately annulled.
C. FAMILY MEMBERS:
Husband/wife or partner, parents and financially dependent children of age 18 and above, of the successful applicant, can also obtain citizenship.
1. The Husband/wife or partner of the applicant has the right to apply simultaneously for citizenship with the applicant.
2. Parents or financially dependent children can apply for Cypriot citizenship once the process for citizenship of the applicant has completed and it has been successful.
Note that the parents of the applicant must be owners of permanent privately owned property in Cyprus of worth of at least €500.000 plus V.A.T. (or the applicant and his/her parents can co-own property worth of at least €1.000.000).
The term “financially dependent children” includes full time students up to the age of 28 years old and individuals with serious physical or mental disability, rendering them unable to work.