Application for Cypriot Citizenship Status through Business and Investment Ventures

Method of approaching foreign investors

In the last few decades, the Cyprus economy has been an ideal environment model for foreign investments. In order to encourage foreign direct investments, the Cypriot Government has in recent years launched a special program allowing non-Europeans to be able to apply for a Cypriot Passport through investment or business ventures. As a citizen of a European state, a European passport holder will be able to enjoy the benefits of European interior market, such as free movement of goods, services and capital along with the ease of traveling from one European state to another.

Even though equivalent programs have been set up in other countries in East and South Europe (such as Greece, Spain, Portugal, Malta and Latvia) the Government of Cyprus currently offers the most attractive and flexible Business and Investment Scheme in Europe. The Cypriot Government, showing its willingness to bypass bureaucratic red tape procedures, ensures a quick review of all applications submitted to the governing body.

The legislation, based on which the Cyprus government grants citizenship status through investments, is currently known as the “Scheme for Naturalization of Investors in Cyprus” and is legally based on sub paragraph (2) of section 111A of the Civils Registry Laws of 2002 to 2013.

To be eligible for a Cyprus passport, investors must invest funds starting from as little as € 2.5 million.

Main Investment Options for obtaining citizenship

Below are the main investment options for the acquisition of citizenship in Cyprus:

  • Minimum of € 5 million invested in real estate (g. residential properties, commercial properties, offices, hotels, warehouses, apartment complexes etc.). Excluded from this option is undeveloped land.
  • Investments in development and infrastructure projects of a minimum amount of € 5 million.
  • Cypriot Government bonds bought directly from the primary market, minimum value of € 5 million.
  • Purchase of financial assets from Cypriot companies with a minimum value of € 5 million

(e.g. bonds, debentures, shares).

  • Creation of a new company, acquisition or equity participation in an existing firm with a minimum value of € 5 mil. The company should have visible presence in Cyprus and employee at least 5 Cypriot residents. Receiver of the investment funds could be a company of foreign interests (off-shore) or even a subsidy of an off-shore company.
  • The opportunity to participate with 5 million euros, in a company or consortium of companies which undertakes the start-up of a new Public Project (g. a marina, a recycling station, tourist resort, road construction, dam etc.).
  • A deposit of €5 million in a Cypriot bank for a minimum period of 3 year.
  • € 5 million investment in mutual funds in investment companies with tax base in Cyprus.

The Flexible Business and Investment Program Scheme

Investors wishing to diversify their capital have an option to choose a mixture of the aforementioned ventures. The prerequisite for taking advantage of this Flexible Investment Plan is that the overall value of the investments should not be less than € 5 million.

Additional Options for obtaining citizenship

Apart from the above options, an application could be submitted through the following ways:

Application of Citizenship through a Collective Investment Scheme (CIS):

The majority of investors who apply for Cyprus citizenship make use of an alternative method that allows them to reduce their minimum investment amount by half. The law provides the opportunity for investing € 2.5 million as part of a CIS, with a minimum collective investment of € 12.5 million.

The approval of this CIS lies solely at the discretion of the Ministers Council. The obvious disadvantage of this option is that it is more time-consuming than the independent application of €5 mil as it is indispensable that five (5) applicants should be found. Nevertheless, the overwhelming majority of legal offices in Cyprus cooperate by collecting the applications of their different clients into organized groups of five, succeeding in promoting applications instantly.

Donations and Gross Investments of € 2,5 million: opportunity to obtain citizenship is by two main directives

  1. The first step is to make a minimum investment of € 2 million in the primary market by acquiring shares and / or government bonds from the State Investment Company.
  2. The second step is to make a donation of overall value of € 0, 5 million to the Research and Technology Fund of Cyprus.

To reward foreign investors who have contributed decisive to the development of Cyprus economy, the Cyprus government has implemented the following business criterion for obtaining citizenship: under this criterion, two (2) shareholders of the company are eligible to apply for citizenship under the conditions mentioned below.

The applicant should be either direct or indirect director or shareholder of a company that has physical presence in Cyprus and for 3 consecutive years and has been paying annually the amount of € 500,000 for the following payments: VAT, Corporate Tax, Legal Expenses, Accounting Expenses, Auditing Costs and other government fees and charges. This measure can be adjusted in the following two ways:

  • If the company has employed at least 5 Cypriot citizens during the last 3 years, then the required cumulative minimum amount paid annually over the last 3 years can be up to € 350,000.
  • If the company headquarters are based in Cyprus it must have employment of 10 Greek Cypriot Citizens during the last 3years. In this case the minimum required cumulative amount paid per year is reduced to € 200.000.

 

Finally, as a remedy of their actions that led to the bankruptcy of The Popular Bank Public Company (Laiki) in March 2013, the Cypriot Government provides the possibility to depositors who lost deposits that valued a minimum of € 3 million to apply for Cypriot Nationality. In case the depositor lost less than € 3 million, he reserves the right to apply given that he invested or donated in Cyprus a sum that along with the confiscated deposits amounts to more than € 5 million.

 

Additional conditions and procedures

  • Regarding bank deposits, investments in funds, purchase of real-estate and acquisition of a company, the investor is obliged to maintain investments in Cyprus for a minimum period of 3 years.
  • In terms of investing in stocks and bonds, the total amount invested should also be preserved for a minimum of 3 years, given that there would be no loss on the original nominative value.
  • A pre-requisite regardless of investment or business scheme is that all applicants must not have a criminal
  • Usually, the process of obtaining citizenship does not exceed 90 days. It must be stated that there have been a few cases where citizenship has been granted within 70 days. It is also possible for the applicants dependents (i.e. spouses and minor children) to be granted citizenship, even if they do not meet the economic criteria.

 

Acquiring Nationality through residency

Apart from the above strict economic conditions, applicants might meet the minimum criteria to be eligible for nationality through residency by the following conditions:

  1. A candidate living in Cyprus for a minimum period of 7 years, is eligible for citizenship providing that during this period, he has been living in the Republic of Cyprus for at least 1460 days (4 years).
  2. A candidate who has been working in Cyprus is eligible for citizenship providing that during this period he has been working in the Republic for a minimum of 2190 days (6 years).

An additional condition when applying for nationality via residency status is that the candidate has to be on the island for 12 consecutive months before submitting an application.

Permanent Residency

In the event that a candidate cannot acquire a Cypriot passport for whatever reason (e.g. already has a second nationality by another non-European country) but wants to reside permanently in Cyprus without being obliged to be subjected to the time-consuming visa process each time he visits the country, he can apply for permanent residency.

For more information regarding the permanent residency programs, please click here.

Should you have any queries, don’t hesitate to contact us.