Cyprus has always been considered as an ideal destination for Permanent Residence by Non-EU Nationals. The Cypriot Government, in an attempt to further attract foreign investment to the island and to help economic recovery and further economic growth, recently announced certain amendments to the provisions of Regulation 6(2) of the Aliens and Immigration Regulations, which became effective on 24th March 2021.
An Immigration Permit under Regulation 6(2) gives Non-EU nationals the right to permanently reside in Cyprus. The recent revision of regulation 6(2) is in line with the Cyprus Government's objective to stimulate and increase foreign investment in areas other than merely real estate.
The most significant amendments are as follows:
Additional Investment Criteria Added
Though the required amount of the investment remains the same, the investment criteria have been expanded and are no longer solely related to investment in real estate. Other categories have been included.
In order to qualify, the Applicant must make an investment of at least €300,000 in one of the following categories of investments from funds that emanate from abroad:
(A) Investment in a house/apartment:
Purchase of a house or apartment by a Land Development company, which should relate to a first sale of at least €300,000 (plus VAT).
(B) Investment in real estate (excluding houses/apartments):
Purchase of other types of real estate, such as offices, shops, hotels or similar developments, or a combination thereof with a total value of €300,000. Resales are acceptable.
(C) Investment in the share capital of a Cyprus Company with activities and staff in Cyprus:
An investment worth €300,000 in the share capital of a company registered in the Republic of Cyprus, which is based and operates in the Republic of Cyprus and has a proven physical presence in Cyprus and employs at least five (5) people.
(D) Investment in units of a Cyprus Collective Investment Organization (type AIF, AIFLNP, RAIF):
An investment worth €300,000 in units of a Cyprus Collective Investment Organization.
No obligation for a Fixed Deposit
Another significant amendment is that the Applicant is no longer obliged to deposit €30.000 in a fixed deposit account, locked for three years This requirement has now been removed.
Requirement of a Secure Annual Income
It continues to be the case that, in addition to making the investment, the Applicant should be able to demonstrate that he has at his disposal a secure annual income of at least €30,000. Such annual income is increased by €5,000 for each dependent family member and €8,000 for each dependent parent of the Applicant or his/her spouse.
In the event that the Applicant makes an investment under criterion A above, to purchase a house or apartment, it is essential now, as it was previously, that the Applicant can prove that his income derives from abroad.
However, when it comes to investing in criteria B, C, or D above, it is notable that the new amendments provide that the Applicant’s source of income may be derived from sources from activities within the Republic.
Declaration of ‘No intention to work in the Republic’
It has been a requirement of the Programme that when applying under Regulation category 6(2), the Applicant and his/her spouse had to certify that they did not intend to work in the Republic.
This continues to be the case under the amended regulations, with the exception of their employment as Directors in a Company in which they have chosen to invest under this policy, which is now permitted, provided they do not receive a salary.
Furthermore, it is clarified in the new amendments that where the investment does not relate to the share capital of a Company, the Applicant and/or the Applicant’s spouse may be a shareholder in companies registered in Cyprus and the income from dividends in such companies shall not be considered as an impediment for the purpose of obtaining Permanent Residency.
Requirement of Proof of Residence under criteria B, C, or D
Another notable point is that the amended regulations provide that where the Applicant chooses to invest under criteria B, C, or D above, the Applicant should present information in relation to his place of residence in the Republic which can be a title deed, sales agreement or rental agreement.
Provisions relating to Investment in Real Estate
When investing under criteria A and B above (Real Estate), it continues to be the case that at least €200.000 plus VAT needs to be paid prior to submitting the application and that evidence should be provided that the funds for the investment must have emanated from abroad and are not a product of internal borrowing, and these funds need to be deposited in a financial institution in Cyprus in the Vendor’s bank account.
It should be noted that the purchase of real estate can be made by a legal entity in which the Applicant and/or his spouse are the sole shareholders or UBOs, and which entity is legally established in the Republic of Cyprus or in another Member State of the European Union or the European Economic Area.
For the purposes of applying under Criterion A in relation to the purchase of a house/ apartment (dwelling), it is specified that:
(a) The Applicant may purchase up to two (2) units of residential property, (apartments or houses), provided that the total market value meets the minimum requirement of €300,000 plus VAT.
(b) This purchase must relate to dwellings sold by a land development company for the first time, (not resales), unless the purchase of the dwellings took place before 07/05/2013.
Contract of Sales contracts relating to resale of dwellings which were deposited in the Land Registry before 07/05/2013 will be accepted for the purposes of implementing this policy.
It is emphasized that the properties do not have to be purchased by the same Land Development company.
Dependents of the Main Applicant
The Immigration Permit is issued to the Applicant and it can include his/her spouse and dependent children up to the age of 18.
As before, an Immigration Permit can be granted to unmarried children of the Applicant between the ages of 18 and 25, only when it is proven that, at the date of the application, they are attending higher educational institutions abroad and provided they are financially dependent on the Applicant. Such dependent children shall submit their own separate applications for an Immigration Permit upon payment of the appropriate fee.
It is noted, however, that, if the children of the Applicant between the ages of 18-25 are enrolled as students in Higher Institutions of the Republic of Cyprus, they will have to apply for a Temporary Residence Permit in the Republic in their capacity as students under the relevant legislation (EU Directive). Following the completion of their studies, they will be entitled to apply for a Permanent Residence Permit, irrespective of their age with the only prerequisite that the main Applicant provides evidence of an additional annual income of €5000 per annum. The Permit will continue to apply after the age of 25, even if the children marry by then, and they are no longer students or financially dependent on the Applicant. It is understood that their spouse and their minor children may not be included as dependent persons in such a Permit.
It continues to be the case that the parents and parents-in-law of the main Applicant can apply on the basis of the main Applicant’s investment, with the prerequisite that the Applicant will present an additional annual income of €8,000 for each dependent parent or parent-in-law.
Higher Value Investment to include Adult Children
An important addition in the Regulations is that it is now possible for the main Applicant to make an investment of a higher value in order for his adult children to obtain an Immigration Permit (Permanent Residence) even though they are not financially dependent on the main Applicant.
The market value of the investment of €300,000 needs to be multiplied according to the number of adult children, which will rely on such investment for the purpose of obtaining an Immigration Permit.
In the event that the investment relates to Real Estate, as described in criteria A or B, a receipt of payment of at least 66% of the market value of the properties should be submitted together with the application.
It must be noted that, in such cases, each adult child must be able to prove a secure annual income of at least €30,000, which will be increased by €5,000 for each dependent person.
Such investment can be made jointly in the name of the Applicant and the adult child or exclusively in the name of the Applicant.
Clean Criminal Record
Needless to say, it remains a fundamental requirement that the Applicant provides a clean criminal record from his country of origin and residence, and generally does not pose any threat to public policy or public security.
Application Procedure and Examination
The application will be processed by the Civil Registry and Migration Department and shall be forwarded for examination and decision to the Minister of Interior, provided that all the criteria and requirements are met. It is estimated that the examination period will be two months from the date of submission of the application.
Permanent Residency in Cyprus as a Plan B
The amendments introduced to the Cyprus Residency Programme are more than welcome. Especially now that the previous Cyprus Investment Programme has been suspended, we are optimistic that the Cyprus Residency Programme, as amended, will continue to attract those investors who are searching for a Plan B to safeguard their families, in addition to merely protecting their wealth. The unique combination of benefits that Cyprus has to offer, including the high quality of life, low cost of living, excellent education, a high standard of healthcare, tax advantages, a strategic business location, as well as the international business environment, are all important reasons for those looking to obtain Permanent Residency in Cyprus. As it has become necessary during the lockdown to spend an extended amount of time in one place, investors are now looking for a country where they are happy to stay for a lengthy period of time. Thus, countries such as Cyprus, with its good infrastructure, healthcare and education and that are welcoming to international residents, are in the forefront of their consideration and we hope that these amendments will make the Programme even more attractive to investors.
The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Esme Palas, Partner, on Telephone 26930800 or email firstname.lastname@example.org