Citizenship by Investment in Cyprus

Citizenship by Investment in Cyprus

The Council of Ministers updated the conditions for naturalisation of investors in Cyprus by exception, based on subsection (2) of section 111A of the Civil Registry Laws of 2002-2013. According to the verdict laid out on March 19, 2014, a non-Cypriot citizen may apply for the attainment of Cypriot citizenship, if he or she has purchased state bonds, invested in financial assets of Cypriot companies or Cypriot organisations, invested in real estate, land development and infrastructure projects, maintains deposits in Cypriot banks, has business activities in the country or suffered an impairment of deposits due to the resolution measures implemented.

Applicants interested in attaining Cypriot citizenship are required to complete the M127 form and submit certain documentation.  In all cases, investors need to submit the contract of sale and a confirmation of settlement of their residence. Further documentation is also required, depending on the case.

CRITERIA AND DOCUMENTATION:

A1.Purchase of state bonds

The investor must have bought state bonds of the Republic of Cyprus of at least €5 million.

Documentation Required

Receipts from the Treasury of the Republic of Cyprus for the purchase of the state bonds.

A2. Investment in financial assets of Cypriot companies or Cypriot organisations:

The investor must have obtained financial assets of Cypriot companies or Cypriot organisations, i.e. bonds, securities, debentures registered and issued in the Republic of Cyprus of at least €5 million.

The financial assets can be obtained at issuance or by the market.

Documentation Required

  1. Title/titles and other documents concerning the financial assets.
  2. Copy of the bank transfer in the Cypriot commercial banking institution in the name of the company or the organisation.

A3.Investment in real estate, land development and infrastructure projects:

The investor must have pursued an investment of at least €5 million for the purchase or construction of buildings or for the construction of other land development projects, such as residential developments, commercial developments, developments in tourism or other infrastructure projects.

Documentation Required

  1. Contract of sale.
  2. Title Deeds/ Receipt for lodging the contract with the Lands and Survey Department.
  3. Payment receipts of the agreed purchase amount.
  4. Copy of the bank transfer in the Cypriot commercial banking institution in the name of the vendor or the vendor’s company.

 

A4. Purchase or creation or participation in Cypriot businesses or companies:

The investor must have invested at least €5 million in the purchase, creation or participation in businesses or companies, based and operating in the Republic of Cyprus. Apparently, these businesses or companies should have real presence in Cyprus and employ at least five Cypriot citizens. It should be underlined that the required conversion of deposits into shares is comprised in this criterion.

Documentation Required 

  1. Contract of sale.
  2. Payment receipts of the agreed amount of purchase.
  3. Certificate of shareholders by the Registrar of Companies or certificates proving that the investor is the beneficiary owner of the company/companies.
  4. Copy of the bank transfer in the Cypriot commercial banking institution in the name of the company or the organisation.
  5. Confirmation from the Social Insurance Department concerning the insurable income of the Cypriot employees in the company.
  6. Confirmation from the Inland Revenues Department concerning the taxable income of the Cypriot employees in the companies or businesses that the eligible investor invested in.

A5.  Deposits in Cypriot Banks

The eligible investor must maintain private fixed term deposits for a three-year period in banking institutions of the Republic or deposits of privately owned companies or trusts in which the investor is the beneficiary owner of €5 at least million.

Documentation Required

  1. Confirmation of Cypriot banking institutions concerning the fixed terms deposits for three years of the investor or the companies or the trust in which the investor is the beneficiary owner.
  2. Copy of the bank transfer in the Cypriot commercial banking institution.

A6.   Combination of criteria A1-A5

An individual is eligible for the acquisition of Cypriot citizenship, if he or she has a combination of the above, i.e. investment in government bonds, investment in financial assets of Cypriot companies or organisations, investment in real estate, land development and infrastructure projects, purchase or creation or participation in Cypriot businesses or companies and deposits in Cypriot banks, to at least €5 million.

A7. Investors with impaired deposits after bank resolution

Individuals whose deposits with Laiki and Bank of Cyprus have been impaired due to the restructuring measures implemented after March 15, 2013 may apply for naturalisation. In order to be eligible, the amount of their deposit impairment should be no less than €3 million.

In the event that an investor had suffered impairment in his or her deposits below €3 million, he or she may still apply, under the condition that he or she has made an additional investment through the criteria A1-A5 (purchase of state bonds, investment in financial assets of Cypriot companies or Cypriot organisations, investment in real estate, land development or infrastructure projects, purchase or creation or participation in Cypriot businesses or companies and deposits in Cypriot banks) amounting to the balance required of the above-mentioned criteria.

Documentation Required

  1. Confirmation regarding the extent and date of the impairment of deposits.
  2. When it comes to deposits in companies in which the investor is the beneficiary owner, the certificate of registration of the company by the Registrar of Companies and/or any other relevant evidence need to be submitted.

 

A8. Major Collective Investments:

The Council of Ministers shall have the authority on special occasions, to reduce the criteria A1 (Purchase of state bonds), A2 (Investment in financial assets of Cypriot companies or Cypriot organisations), A3 (Investment in real estate, land development or infrastructure projects) and A4 (Purchase or creation or participation in Cypriot businesses and companies):

I.            To €2 million for investors who evidently participate in a special collective investment scheme under the condition that the total value of the investment is more than €12.5 million.

The provision (I), the investment Criteria A1-A4 could be accomplished through different seller/ provider (physical or legal entity).

Terms and Conditions

Investors who satisfy the criteria for applying for naturalisation must have a clean criminal record. Moreover, their names must not be incorporated in the list of individuals whose assets are ordered to be frozen within the European Union borders.

Additionally, applicants must hold a permanent privately-owned dwelling in the country, the market value of which must be worth a minimum of €500.000 plus V.A.T. It should be clarified that family members, who apply independently as investors, are eligible to obtain a residence collectively, under the condition that the total price of the particular home-property covers the amount of € 500.000 per each applicant

The aforementioned conditions do not affect the absolute discretion of the Council of Ministers in affording a decision. In case that after an assessment, it has been revealed that a condition has been circumvented, the authorisation of Cypriot citizenship may be annulled.

Apply for the acquisition of Cypriot citizenship

Contact Michael Chambers & Co and learn everything you need to know with regard to the new scheme for naturalisation of investors in the Republic of Cyprus. Our Corporate and Commercial Law team can inform you whether you are an eligible applicant and undertake the completion of your application form in a timely and effective manner.