Cyprus – a straightforward route to EU citizenship
Cyprus is one of the most popular jurisdictions for non-EU citizens who wish to obtain an EU passport. Over the last few years, the island has attracted many third-country nationals who wish to either live in Europe or enjoy the advantages of holding an EU passport. The Cyprus naturalization by investment scheme is considered the most straightforward route to becoming a European citizen. Investors and entrepreneurs coming from Russia, China, Middle East, Syria, Egypt, Ukraine, and South America, have chosen to obtain the Cyprus citizenship by investing in the country’s economy. Either enterprises looking to expand their international presence or just wealthy individuals or other entrepreneurs looking for investments can benefit from the Cyprus solid business infrastructure and the new laws for granting the citizenship by investment.
A Cyprus passport within 90 days
The fast track application saves a lot of time for investors and their families who can now obtain the Cyprus passport and the privileges of the EU citizenship within ninety days. The procedure to obtain the citizenship is simple and straightforward. Cyprus is one of the few countries within the EU that offers direct citizenship without any residential requirements in comparison to other countries where applicants first obtain a residence permit and after a period of time, usually five to ten years, file another application to obtain the citizenship. The Cyprus scheme has a transparent procedure as the examination is solely based on economic criteria and the submission of a clean criminal record. Third country nationals are benefited from the fact that there are no language competence requirements. The Cyprus scheme also benefits the applicant’s family since the spouse and any children below the age of 18 (or 28 under certain conditions) are also able to obtain the citizenship. Grandchildren can also inherit the citizenship via naturalization.
Cyprus offers to investors the opportunity of a dual citizenship. Investors choose Cyprus for a variety of reasons like the good quality of life and the relatively low cost of living, the high standard of professional and multilingual services, the Mediterranean climate, the access to the health care and educational system, the very low crime level, and the multicultural society. Cyprus’ legal system is based on English law and the English language is broadly spoken. Entrepreneurs also benefit from the opportunities for investment and growth, for example the excellent rental yield that generates from investments. The strategic geographical location makes the country an ideal destination and the granting of a Cyprus passport offers ease of travel to Europe, Asia, Middle East, Africa and USA.
Most importantly, Cyprus is a full member of the European Union since 2004 hence Cypriot citizens enjoy all the privileges of an EU citizen: free movement of people and capital within the countries of the EU, free establishment and movement of services in all EU countries and free movement of goods. EU citizens enjoy the right to freely travel, reside, work and study in any EU country, the right to transfer any amount of money from any EU country to another, purchase property and invest in any other way in any member state. Applicants can also benefit from the special tuition fees exclusive for EU students.
Cyprus offers a combination of tax incentives for investors who were granted the citizenship. Besides the low corporation tax of 12.5%, the investor does not become a tax resident in Cyprus unless he spends more than 183 days in the country in one calendar year. Cyprus has also signed numerous double tax treaties with other countries that offer tremendous possibilities for international tax planning.
Naturalization scheme through investment
The Cyprus government grants the citizenship with various and often combined ways. Investors and entrepreneurs apply personally or through a corporation. The economic criteria are examined by the Ministry of Finance. The applicant should invest the amount of €5 million or the amount of €2.5 million in case he participates in collective investment plans of €12.5 million. The investment can be made in:
- Government bonds;
- Financial assets of Cypriot companies or organisations;
- Real estate, development and infrastructure projects;
- Purchase, incorporation or participation in Cypriot businesses and companies; and/or
- Deposits in Cypriot banks or deposits of privately owned companies or trusts.
The investor is also required to have a permanent privately-owned residence in Cyprus of at least €500.000 unless he chooses to invest the amount of €2.5 million in the purchase of a private residence.
Investors who choose to invest the amount of €5 million often prefer the combination of investment in real estate and bank deposits. The most popular investment option for applicants who invest the amount of €2.5 million through a collective plan is the investment in real estate. The property investment is the most frequent option as it generates significant rental income. However, investors have expressed the opinion that the scheme should also allow investment combinations for the amount of €2.5 million.
The fast track application procedure
The application for the naturalization is submitted to the Ministry of Interior and examined by the Ministries of Interior and Finance. If the applicant meets the criteria and conditions, the case is presented to the Council of Ministers for the final decision. Once the application is approved, the Certificate of Naturalization is issued by the Civil Registry and Migration Department within two weeks.
Residence permit – the permanent and unlimited ticket to Cyprus
A non-EU investor can also obtain a permanent and unlimited in duration residence permit in Cyprus without engaging in any business, trade or profession. The permanent residence permit may be granted by purchasing a property in Cyprus, a house, an apartment, or other building of minimum market value of €300.000 (plus VAT). This scheme is suitable for people who have a secured annual income high enough to give them a decent living in Cyprus and cover all the expenses according to the applicants’ needs. The income must be generated from any legal source abroad, for example from pensions, business activities, permanent deposits, shares, employment, rents. The permanent residence is granted to applicants for the rest of their lives without requiring to be renewed. There is no need to reside in Cyprus; a short visit once every two years is sufficient. However, holders of the permit are not allowed to work in Cyprus.
The procedure for obtaining the Cyprus Permanent Residency is an expedited process completed in two months. The application for the residence permit is examined by the Minister of Interior. The criteria are simple and easy to fulfil compared to other countries. Cyprus is not yet a Schengen member state, but is soon going to join the Schengen area. Nonetheless, Cyprus permanent residence holders receive the Schengen visa within a shorter time period and with simple procedures.
Interested investors should have in mind that applying for the Cyprus citizenship requires professional legal advice. The guidance offered by a reputable law firm specialising in immigration law, banking and finance, corporate law and immovable property will determine the success of the application.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought on your specific circumstances.
For further information, please contact Eleni Drakou.