23/08/22

CYPRUS: Cash-for-passports scheme’s lost revenues cast doubt over benefit to country.

As published on in-cyprus.philenews.com, Tuesday 23 August, 2022.

A cash-for-passports scheme discontinued by Cyprus in 2020 after a political furore has cost the state hundreds of millions of euros in lost revenues from misdirected tax breaks.

And this casts a dark cloud over repeated official arguments that the scheme was beneficial to the country, Philenews reported on Tuesday.

Just over 7,000 investors and family members benefited from the citizenship scheme, which in its final form required a minimum two million euro investment for a Cyprus passport.

As the country is a member of the European Union, Cypriot passports provide visa-free travel and access throughout the bloc.

The scheme was abolished in October 2020, after a barrage of news reports suggesting that fraudsters and fugitives from justice had benefited as well as bona fide investors.

Based on the findings of the Audit Service, the scheme was estimated to bring in a total of seven billion euros to the Cypriot market but investments totaling 4.5 billion (64%) were found to have presented complications.

Specifically, a significant number of real estate purchase and sale documents – a basic condition for acquiring Cypriot citizenship – worth 3.5 billion euros are pending.

And they remain pending for a period of two to eight years. In addition, a large number of contracts for the purchase of real estate corresponding to the respectable amount of one billion euros have been cancelled.