To facilitate citizenship investments, Cyprus overhauled its citizenship regulations last year. At one point the programme required an individual investor to put up at least €5 million, and as an alternative it allowed a group of five to invest at least €12.5 million between them, but a minimum of €2.5 million for each investor. This could cause delays because investment consultants had to piece together groups of five applicants who did not know each other.
The Government has now abolished the cumbersome collective option and has reduced the threshold to €2 million for everyone – a deduction of 20 per cent compared with the old collective scheme. It also now allows the investor’s parents to apply for citizenship in Cyprus as long as they have purchased a permanent residence worth at least €500,000.
As a result of the financial crisis, Cyprus Popular Bank went bankrupt and many wealthy Russians and others lost assets. By way of slight compensation the Government allowed those who had lost over €3 million to apply for citizenship. This policy has now ended and the door has been closed. Besides these modifications, the rest of the Cypriot citizenship scheme remains unchanged.
Investors seeking citizenship and access to the European Union must invest at least €2 million in one of four forms of investment:
• Government bonds
• Financial assets of Cypriot companies
• Land, real estate or infrastructure projects (residential or commercial)
• Partnership or full ownership of a local business
Any combination of these investments will also allow a foreign investor to apply for citizenship, whereby only a maximum of €500,000 may be invested in bonds he purchases directly from the Government on the primary market. While meeting these criteria, the investor must also prove that a local property has been purchased to serve as his permanent residence. The value of this property must be at least €500,000. Value added tax of 19 per cent applies on real estate, but only 5 per cent (or more, in certain cases) applies on the first property. Of course it is inevitable that the citizenship applicant has to pass the Government’s ‘due diligence’ assessment. The investor in question must hold his investment for a minimum of three years and the residential property indefinitely. Non-compliance with these rules will lead to annulment of citizenship and passports.
Because Cyprus’ citizenship scheme requires investment only, and no donation to a government fund, the acquisition of citizenship in Cyprus offers the investor exceptional value for money and unprecedented access to Europe (the European Union and European Free Trade Area countries). EU citizens can of course reside and work, not only in the European Union, but also in Iceland, Norway and Switzerland.
Citizen Lane, Switzerland
