The recent changes to the Cyprus Investment Program (CIP)

Posted on 12 Jul 2018, by Eleni Drakou

The scheme for Naturalisation of Investors in Cyprus by exception has proven to be very attractive and popular among high-net-worth-individuals and entrepreneurs from all over the world. The program has introduced specific terms and conditions along with a straightforward procedure for applicants who wish to obtain the Cyprus citizenship.

Taking into account the strong interest by investors, the Cyprus Government has established and revised the “Cyprus Investment Program” on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002-2017, with specific incentives, criteria and control procedures to prevent abuse.

On the one hand, the revisions aim to further encourage the Foreign Direct Investment by attracting individuals to settle and carry on business activities in Cyprus, to further boost the Cyprus economy and to create added value for the country and the investors. On the other hand, the changes intend to enhance the scheme, regulate the procedures and the service providers, and essentially protect the reputation of Cyprus.

The changes

It is notable that the economic criteria and the terms and conditions have not been altered essentially.

The revisions of the scheme have been approved by the Council of Ministers’ Decision dated May 21, 2018, effective as of June 15, 2018 when the Decision was published in the Government Gazette.

The main changes are the following:

The name

The scheme of Cyprus Citizenship by Investment will be renamed to “Cyprus Investment Programme” (CIP).

The Cap

A limitation of 700 applications per year takes effect from 2018. The cap refers to the main applicants but not the applicant’s family members. The number of the approved applications will be taken into account, without any limitations in the number of the submitted applications per year.

Conditions

In cases where the investment involves the purchase of property or properties under construction for which the Town Planning Permit has not as yet been obtained, the mandatory three-year period of maintaining the investment commences on the date that the Town Planning Permit is issued. This clause applies for applications submitted on or after 15/06/2018.

Examination period

The expected timeframe for examining any application submitted in accordance with the CIP is six months.

Registry of Service Providers

All CIP applications should be submitted on behalf of the applicants by natural or legal persons who are registered with the Registry of Certified Service Providers. The registration of new members will be examined and approved by the Committee of Supervision and Control which comprises representatives from the Ministry of Finance, the Ministry of Interior and Invest Cyprus. The Registry will be published on 31/07/2018 on the websites of the Ministry of Finance, the Ministry of Interior and Invest Cyprus (CIPA).

Code of Conduct

The newly established Code of Conduct intends to enhance and maintain the trust of the applicants in the CIP as well as to protect the CIP itself. All members of the Registry of Service Providers and their professional associates should comply with the Code of Conduct which sets the parameters for the provision of services to applicants. Moreover, the Code of Conduct sets the guidelines for the promotion and advertising of the CIP.

Due diligence

A thorough due diligence will be conducted on the applicants and a due diligence report, issued through an internationally accepted database (e.g. LexisNexis, World Check etc), will be required to be submitted together with the application of the main applicant and the main applicant’s spouse and parents.

As per the Decision of the Council of Ministers, the Minister of Finance is authorized to carry out an evaluation study on the CIP and its effects on the economy. The Committee of Supervision and Control will undertake possible revisions from time to time to further improve the implementation of the CIP.

For any further information please contact Eleni Drakou, Associate and Director of Business Development of Michael Kyprianou and Co. LLC by email at eleni.drakou@kyprianou.com or by phone at +357 25 363685.