Most Recent Changes of the Cyprus Investment Program

New Amendments applying from 15th May 2019 for investors seeking Cyprus citizenship


The Cyprus Investment Program was established by the Council of Ministers to further encourage Foreign Direct Investment and attract high net worth individuals to conduct their business in Cyprus.

In order to improve the Cyprus Investment Program, the Council of Ministers on the 13th of February 2019, decided on a series of amendments which allow non-Cypriot investors and members of their families to apply for Cypriot citizenship.

The key provisions are as follows:

1. It is obligatory for the applicant to contribute a minimum of €75.000 to the Research and Innovation Foundation.  If, however the applicant wishes to donate more than the obligatory amount then this additional donation may be used as supplementary based on the criteria laid out in A.2-A.5.  The applicant may be excused of this obligation under certain circumstances such as: investing a minimum of €75.000 in a certified innovative and social enterprise (i.e. certified by the Ministry of Finance); investing under criterion A.3 (Purchase or Establishment or Participation in Cypriot Companies or Businesses) an amount of at least 20% of the investment cost of the required amount (i.e. € 400,000) to a company of either the primary or secondary sector of the economy, or in the sectors of Research and Development, Education, Health and Renewable energy sources excluding Constructions. 

2. It is obligatory for the applicant to contribute the amount of €75,000 to the Cyprus Land Development Agency which aims to encourage affordable housing schemes, summing but also incarnate other housing plans/measures. In case the applicant intends to donate a higher amount, the amount in question may be used in order to enhance the total amount of the investment made according to the criteria A.2-A.5.

3. It is obligatory for the applicant to hold the qualifying investment for a total period of five (5) years from the date of naturalization instead of three (3) as previously, subject to the approval of the Ministry of Finance.

4. A complete abolition of investment in government bonds as an acceptable investment within the Program.

5. The applicant must obtain a Schengen visa in order to be eligible to submit an application for naturalization.

6. Any applicant who have been rejected the citizenship in any other Member State of the European Union will not be entitled to obtain Cypriot citizenship within the framework of the Cyprus Investment Program.

7. It is required by the applicant to hold a residence permit in the Republic of Cyprus for a minimum period of six (6) months prior to naturalization as a Cypriot citizen.

8. The integration of investing in the shipping industry within the terms of qualified investment upon certain measurable conditions.

9. The integration of investment Alternative Investment Funds (AIF) or Registered Alternative Investment Funds (RAIF) or financial assets of Cypriot companies or Cypriot organizations that are licensed by Cyprus Securities and Exchange Commission (CySec). The applicant should have purchased units of at least €2,0 million either from AIF or RAIF established in the Republic Cyprus, approved /registered and managed by the CySec and whose investments are made solely in the Republic of Cyprus, that meet the conditions of this Program or are in any way approved by the Minister of Finance. Further, these Organizations are permitted to invest up to € 200,000 in Cyprus Stock Exchange’s secondary market.

10. The provisions specified by the Investments in Real Estate and Development and Infrastructure Projects do not oblige the applicant to purchase another permanent private residence in the Republic of Cyprus given that at least one of these residences is worth a minimum of € 500,000 and that the total of the three investments is at least € 2.5 million.  This is due to the fact that the residential housing already in use for the purposes of the Investment Program will be reprocessed under the same program.

Certain criteria are required where the investment is related to the purchase of realty or property used as a permanent residency namely:

-         Issuance of planning permission by the Department of Town Planning and Housing in accordance with the Town and Planning Act (N. 90/1972)

-         Certificate of completion signed by the architect of the project.  In cases of property which are under development it is compulsory to sustain a sum equal to 5% of the value in the specified account or the corresponding bank guarantee from the vendor of the property to the purchaser (Performance Bank Guarantee).

-         A waiver from the bank in the case of a mortgaged property is required to confirm the waiver of any rights upon receipt of the mortgage payment.

11. An Annual Implementation Report that comprises the figures of naturalizations, nationality of the applicants and the sector in which the investments were made will be prepared for the sake of clarity and accurate data.

12. Reaffirmation of the prohibition on the marketing of the Investment Programs in public areas and on the Internet, stressing the visibility of the Cypriot passport and the symbols of the Republic and the EU.

13. The adoption of a Code of Conduct, which must be followed by all service providers, who are now registered under a special Registry.   

14. Publication of proposal for acquisition of services for enhanced due diligence practices for the applicants seeking citizenship from the Interior Ministry within two months from the date of the application.

 

Disclaimer:

Please note that the list of amendments mentioned in this document is not exhaustive but merely gives an indication of the new amendments. For further information or assistance please do not hesitate to contact PELENCANOS & PELECANOU LLC by telephone (+357 24 659930) or by  e-mail (info@pelecanoslaw.com).

 

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