The popular Cyprus Investment Programme is about to change. The programme will remain attractive for foreign investors while boosting transparency in the context of the increased pressure from the EU. However, both the level of investment and the holding period are increasing enough to make some smaller investors think twice. From 15th May 2019, the applicants will be subject to the new regime.
The main changes are the introduction of a mandatory donation of €150,000 to governmental organisations, a minimum investment raised to €2.5 million for resale property previously used in Citizenship applications or other investments (instead of €2 million) and the obligation to maintain the investments for 5 years (instead of 3). For investments in newly built property which carries a 19% VAT, the investment stays at €2 million + VAT. On the plus side, all the key advantages of the Cyprus citizenship for an investor and their family remain as potent as before and the timeframe to obtain the citizenship is still 6 months.
The aim of the changes is to enhance trustworthiness in the Cyprus Investment Programme while benefitting the economy and prosperity of Cyprus. For the sake of transparency, an Annual Implementation Report will be prepared, that will include the number of naturalizations, nationality of the applicants and the sector in which the investments were made. In addition, the Government reaffirms the ban on advertising of the investment programme in public places and on the Internet.
There is still time to apply for the program under the current regime, as long at the application is received no later than 14th May 2019. The main changes, effective from 15th May 2019, are as follows:
- A mandatory donation of €75,000 to the Foundation for Research and Innovation to promote the creation of an entrepreneurial innovation ecosystem. This obligation that can be waived under certain conditions, i.e. the applicant invests in an innovative business or in a certified social company, or the applicant invests at least 20% of the investment in a company operating in the primary or secondary sector of the economy, or in one of the fields of research and technology, education, health, and renewable energy.
- A mandatory donation of €75,000 to the Cyprus Land Development Corporation, aiming at the contribution to the integrated housing policy, specifically for the purpose of implementing affordable housing projects and the implementation of other housing plans / measures.
- The inclusion of investments in the shipping sector in the eligible investments, on the basis of specific measurable criteria.
- The investment should be maintained for 5 years following the date of naturalisation, instead of 3 years.
- During the 5-year period, the applicant will be able to change his/her investment, provided consent is granted by the Ministry of Finance.
- Where the investment relates to the purchase of real estate property or properties as well as for the purchase of the required permanent privately-owned residence, a planning permission, a completion certificate and a bank waiver will be required.
- The Investment requirement for residential properties is kept at €2,000,000. Investment in other sectors is €2,500,000. Any application which includes resale property already used for a previous Citizenship application by other applicants, increases the amount of investment for the New Application to €2,500,000.
- Complete abolition of investment in government bonds as an acceptable investment within the Programme.
- Stricter due diligence test to be conducted by a specialised firm.
- The applicant must have a Schengen visa in order to be able to apply for naturalisation.
- Any applicant who has applied for the acquisition of citizenship in any other Member State of the European Union and has been rejected will not be entitled to acquire Cypriot citizenship within the framework of the Cyprus Investment Programme.
- The applicant should be in possession of a residence permit in the Republic of Cyprus for at least 6 months prior to naturalization as a Cypriot citizen.
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