Martinos Typographos examines the Cyprus Citizenship by Investment offerings in an insightful case study.
Subsection (2) of Section 111A of the Civil Registry Laws (2002) of the Republic of Cyprus provides that the Council of Ministers may, under any conditions it determines to be appropriate, allow the Naturalization by exception of foreign investors. Thus by virtue of its most recent decision dated 19 March 2014, the Council of Ministers has revised its conditions and criteria for granting Cyprus Citizenship by exception to interested non-Cypriot nationals and their families that wish to invest in Cyprus.
The procedure under Cyprus’ Citizenship by Investment Program (CCIP) is simple, fast and straightforward. The main rationale behind the program is to attract new investment in Cyprus, therefore once certain pre-defined conditions are satisfied the naturalization certificate will in most cases be granted within three months. The time factor is indeed one of the standout points of the Cyprus program along with the fact that it is the only program in the European Union that requires no compulsory residence of any duration and also the fact that the program is based on an investment rather than a donation.
As mentioned above the criteria are very simple and straight forward. Citizenship shall be granted to any interested individual and their family (spouse, minors and financially dependent children up to the age of 28) who invest an amount of at least €2.5 million in any one of a number of investment options (see below). Further to the investment the investor is required at all times to have a residential property in Cyprus of no less than €500,000 and have a clear criminal record.
The applicant’s spouse is eligible to apply along with the investor without the need of satisfying further economic criteria. The spouse’s application can be submitted along with the application of the investor, so that both spouses are able to acquire the Cypriot citizenship simultaneously.
As with the spouse, minors (under the age of 18) and financially dependent children of the applicant up to the age of 28 are eligible to apply for Cyprus citizenship without the need to satisfy further economic criteria.
Upon the acquisition of the Cyprus Citizenship by their investor parent, minor children will inherit the right to acquire the Cyprus Citizenship of their parents according to the provisions of section 110 (3) of the Civil Registry Law.
The Decision of the Council of Ministers regulates, that adult children of an investor are considered as financially dependent, if they are students up to the age of 28 and are attending an institution of higher education aiming to obtain a diploma or an undergraduate or a master’s degree. The Decision excludes individuals who are studying for the acquisition of a professional qualification (eg, chartered accountants, barristers etc.) or individuals who are studying for the acquisition of a second, third etc. diploma or degree (either undergraduate or master’s). Additionally, an investors’ child with severe physical or mental disability that makes him/her unable to work is also considered as financially dependent.
In any case the application of the children may be submitted once their investor parent has acquired the Cypriot citizenship.
Every application must be decided upon within three months from the date of submission.
Provided all necessary documentation is submitted and all required criteria are met then the application will be examined in a positive light and the Cyprus citizenship will be granted.
The applicant, applicant’s spouse and every child of the applicant over the age of 18 will be required to pay €2,000 each for the submission of the application and, if the application is approved, the amount of €5,000 for each, is paid as a fee for the issuance of the Naturalization Certificate.
Minors, under the age of 18, will only be required to pay an amount of €80 for the issuance of their Naturalization Certificate.
Any interested applicant may choose any one of the following investment options/criteria:
An amount of €2.5 million invested in any one of criteria 2, 3, 4 and 5 below as part of special collective investment scheme the total value of which should be at least €12.5 million.
Note 1: Where the investment of €2.5 million above is in a single residential property the applicant need not satisfy the further condition of acquiring a residential property in Cyprus of at least €0.5 million, applied to the other criteria below.
Note 2: Each investor that forms part of the collective investment may invest in any sector they wish and their investment will have no connection whatsoever with the investment of the other co -investors
Note 3: Interested applicants are not required to find all investors by themselves. Investment Immigration consultants in Cyprus have the capacity to facilitate this for their clients. They can easily and quickly source additional investors to form the collective schemes.
Acquisition of state bonds of the Republic of Cyprus of at least €5.0 million.
Acquisition of financial assets of Cypriot companies or Cypriot organizations (bonds/ securities/ debentures registered and issued in the Republic of Cyprus) of at least €5.0 million. These financial assets can be purchased either at issuance, or subsequently by the market.
An investment of at least €5.0 million for the purchase or construction of buildings or for the construction of other land development projects (residential or commercial developments, developments in the tourism sector or other infrastructure projects).
An investment of at least €5.0 million in the purchase, creation or participation in businesses or companies, that are based and operate in the Republic of Cyprus. These businesses or companies should evidently have a tangible presence in Cyprus and employ at least five Cypriot citizens.
The applicant needs to have personal fixed term deposits of three year duration in Cypriot banks or deposits of privately owned companies or trusts (in which he/she is the beneficiary) in the Republic of Cyprus, of at least €5.0 million
The applicant may choose to invest in a combination of the above amounting to a total value of €5.0 million.
Any persons whose deposits with the Popular Bank Public Company Ltd, amounting to a total of at least €3.0 million, have been impaired due to the measures implemented after the 15 March 2013 will be regarded as satisfying the investment option criterion.
Duration of Investment
Any investment pursued under the program need only be kept for three years. After that period the successful applicant may dispose of any investment acquired in pursuance of his Cyprus Citizenship. Also any property acquired in pursuance of the CCIP may be rented out from day one.
The first thing every interested applicant needs to do is to decide on his choice of investment. Depending on this, actual presence in Cyprus may not be essential and a representative may be appointed to act for the investor. If applicable the applicant would also be required to proceed with the purchase of a residential property of at least €500,000. In certain cases the purchase of two residential properties of a total value of at least €500,000 may be allowed.
The investment process should be quite straight forward and easy and should provide no future problems to any prospective investor provided, such investor acts prudently and takes advantage of the safe and protective legal system of Cyprus. It is imperative for a prospective investor to seek professional advice to safeguard against future risks and avoid unnecessary pitfalls.
Once the investment process is completed and prior to submitting his application, the investor is required to proceed with a publication in two separate issues of any newspaper circulating in Cyprus stating his intention to apply for naturalization. After this the applicant would be ready to prepare and submit his application (Form M127) for Cyprus naturalization accompanied by his birth certificate, copy of passport, certificate of clear criminal record from his country of origin, marriage certificate (if applicable), copy of the newspaper advertisement as above, CV, proof concerning the permanent privately-owned residence(s) of €0.5 million (if applicable) and the required documents evidencing the choice of investment of the applicant in Cyprus.
As mentioned above the spouse’s application can be submitted along with the application of the investor, so that both spouses are able to acquire the Cypriot citizenship simultaneously, whereas the application of the children may only be submitted once their investor parent has acquired the Cypriot citizenship.
The application is submitted to the Ministry of Interior and the application fee paid is €2,000.
Examination Procedure of an Application
Once an application is submitted the examination process begins. Firstly, the documents relating to the investment of the applicant in Cyprus are sent to the Ministry of Finance for evaluation. In the meantime, the Ministry of Interior examines whether the applicant meets the remaining conditions of the Decision of the Council of Ministers. Where the response is affirmative from both Ministries then the Minister of Interior presents the case to the Council of Ministers for approval. Once the application is approved, the Civil Registry and Migration Department will issue the Certificate of Naturalization.
Typographos & Co Lawyers (Ikaros Typographos & Co) is a law firm in the Republic of Cyprus, duly registered with the Cyprus Bar Council.
Martinos Typographos, Partner, Typographos & Co Lawyers