Cyprus Investment Program Recent Amendments

Sep 24th, 2020

Committing your investment funds to a programme in Cyprus is one of the fastest and easiest ways to gain Cypriot citizenship and visa-free travel throughout the EU, but like any citizenship-by-investment programme, the rules and regulations evolve over time with the investment needs of the nation.

Typically, investment in real estate is the easiest path to Cypriot citizenship. If you’re interested in moving and want to apply for citizenship in Cyprus, make sure to familiarize yourself with the latest requirements and investment options.

While most of the CBI program regulations from prior years remain intact, there have been some minor adjustments to the financial requirements and additions to the rules regarding your family’s naturalization.

Amendments to the Cyprus citizenship-by-investment programme were passed on August 18, 2020 by the House of Parliament. As of that time, there hasn’t been a change to the $2 million minimum investment requirement, but there have been updates to the conditions for eligibility.

New Eligibility Restrictions

There are tighter restrictions on who is permitted to apply for the Cyprus investment programme. Regrettably, you’ll have to seek alternate real estate investment opportunities if you fall into one of these categories:

  • Politically exposed persons holding government office within the last 12 months, down from 5 years previously
  • Individuals who are facing legal sanctions in the European Union, or who have family members facing such sanctions
  • Individuals currently under criminal investigation in the European Union or abroad
  • Individuals on the EUROPOL or INTERPOL wanted list
  • Individuals whose citizenship has been rejected by another EU nation
  • Individuals with a criminal record who have been imprisoned in abroad for a sentence of 5 years or more, unless imprisoned for actions that do not constitute a crime in Cyprus

Updates to Financial Requirements

There has been a small bump in the minimum financial assets required to invest in Cyprus citizenship. First and foremost, the mandatory donation has been increased from $150,000 to $200,000, at least half of which must be donated to the Cyprus Land Development Corporation.

The other half must be donated to your choice of one of the following organizations:

  • The Cypriot National Solidarity Fund
  • The Fund for Renewable Energy Sources and Conservation of Energy
  • The Research and Innovation Foundation
  • The Industry and Technology Service

Existing regulations already mandate that you must provide documentation for the source(s) of your funds for investment. With the new amendments to the programme, it’s now mandatory that these funds be disbursed from a bank account owned by the applicant or a business entity owned by the main applicant.

The account in question must be based outside Cyprus, and all investment funds must be paid to Cypriot financial institutions under the jurisdiction of the Cyprus Central Bank.

Since Cyprus is increasing its efforts to fund the Cyprus Land Development Corporation, the new amendments also prohibit using citizenship-by-investment funds for the financing of private land development companies. While you’re still able to invest in existing Cyprus real estate, new development operations are ineligible for investment to gain Cyprus citizenship.

Also, note that you may not invest in properties of any kind inside of a no-building zone.

Updates to Programme Procedures and Requirements

Previously, investors in the CBI program have been required to employ at least five citizens of Cyprus or EU residents who have resided in Cyprus within the last five years.

In 2020, this number has been increased to a minimum of 9 citizens. This minimum may increase should multiple investors be seeking Cyprus citizenship alongside the main applicant.

Family members of the applicant may now also apply for citizenship simultaneously, or they may be permitted to do so at a later time.

In addition, the parents of the spouse of the applicant may now apply for citizenship under the condition that they purchase a permanent dwelling for a price of at least $500,000 plus value-added tax.

Such individuals are expected to reside in the new dwelling “for life,” or else must maintain the dwelling while residing elsewhere in Cyprus.

The Ministry of the Interior has commissioned a Naturalization Control Unit responsible for maintaining the ongoing integrity of the Cyprus CBI program.

Besides making your $2 million investment in real estate or alternative investment programmes, you must maintain favorability as a legitimate business operator in the nation and uphold the CBI requirements at all times. The Naturalization Control Unit will fulfill the following duties:

  • Monitoring that the applicant continues to meet the initial requirements for citizenship
  • Monitoring individuals to ensure they maintain ongoing compliance with the terms set forth in their approved CBI application
  • Provide updates and amendments to CBI rules and regulations are freely available and current for all investors
  • Annual reporting regarding the programme’s implementation and publication of the report for transparency purposes

Revocation of Citizenship

There have been no updates to the CBI regulations with regard to revocation. As in previous years, the Ministry of the Interior may reclaim your Cyprus passport and revoke your citizenship if you commit one of the following penalties:

  • Conviction of a serious criminal offense carrying a prison sentence of 5 years or more, within the first ten years of your naturalization
  • Becoming listed as a wanted person by INTERPOL or EUROPOL
  • Failing to maintain the minimum employment requirements and other mandates laid out under your approved investment programme’s agreement

Double Taxation Lifted for Russian Businesspersons

Cyprus and Russia have agreed to a double-taxation exemption for Russia-based investors in Cyprus and vice-versa. While the Russian and Cypriot governments are still drawing up the final terms of the agreement, the law is expected to pass on January 1, 2021, unless delayed.

The double taxation rule will exempt withholding taxes on interest payments from Eurobonds, government bonds, and corporate bonds.

Any other tax withholding such as insurance or pension fund withholdings will be subject to a tax of not more than 5%, and may still qualify for an exemption.

Putting your time and money into a CBI program is a life-changing commitment. Let Bluemina help you navigate the Cypriot legal landscape with our network of qualified lawyers and immigration experts.

Give us a call today and see how we can simplify this lengthy application process so you can focus on your investment planning instead of the complicated red tape.

Author : Nadine Daoud