Cyprus has always been a desirable destination due to the pleasant climate with more than 300 days of sunshine a year and a unique geographical position. The island offers a free market and a service-based economy supported by tourism, shipping, and newfound natural gas resources with transparent regulatory and legal framework making it an ideal landscape for investors to grow and prosper. Furthermore, Cyprus is one of the safest and most stable nations with low taxes and a flexible approach to the Investment Programs. On top of offering investors several options to a low-hassle, fast-tracked pathway to an EU passport, Cyprus allows applicants to retain their current nationality and to acquire and maintain Cypriot citizenship without a physical-presence requirement.
The Cyprus Investment Programme grants full Cypriot citizenship to individuals who invest EUR 2.15 million into the country in real estate, businesses or selected financial instruments and meet certain other requirements. Successful applicants gain the right to live, work, and study in all 28 EU member countries. Following a revision of the existing program, a new set of rules was implemented in May 2019 that enables foreign nationals to gain citizenship. The changes include the addition of two government contributions of EUR 75,000 each and an approval time frame of six to eight months. The applicants may fulfil the qualifications either personally or through companies in which they act as shareholders or high-ranking officers. Any non-Cypriot citizen may apply for the program provided they fulfill the qualifications listed below:
A. Make the two contributions listed below:
- Donation of EUR 75,000 to the Research and Innovation Fund or another certified innovation enterprise
- Donation of EUR 75,000 to the Cyprus Land Development Corporation
B. Select one of the below investment options:
- Real estate: The applicant should invest at least EUR 2 million for the purchase or construction of residential, commercial or other real estate.
- Business Investment: Investors can qualify by spending 2 million euros to purchase a business with a significant presence in Cyprus. Businesses must employ at least five Cypriot citizens, or longtime Cyprus residents with EU citizenship.
- Purchase of AIFs Investment of at least EUR 2 million in alternative investment funds or financial assets of Cypriot enterprises or Cypriot organizations licensed by the Securities and Exchange Commission including bonds, securities and debt securities.
- Combination: The applicant may invest in a combination of the above, provided that the total investment amounts to at least EUR 2 million including a purchase of up to EUR 500,000 in government bonds.
All applicants must also purchase a residence in Cyprus, at a minimum cost of 500,000 euros plus VAT, in order to qualify for citizenship. The core investment is required to be held for only 3 years but the applicant is required to maintain lifetime possession of a residence in Cyprus. Investors who are investing solely in real estate are allowed to count their 500,000-euro residential-property investment towards their 2-million euro core investment.
For investors not interested in a passport, the Cypriot Government also offers a residency-by-investment program. In this case, the cost is much lower and the applicant can qualify for permanent residency provided the following conditions are met:
- Purchase of new immovable property of a total market value of at least EUR 300,000 plus VAT. The application form must be submitted accompanied with a contract of sale and proof of payment of at least EUR 200,000 plus VAT. The contract of sale must have been submitted to the Cyprus Department of Land and Surveys. The property can also be bought by a company provided that the company is registered in the name of the applicant or the applicant and their spouse. They must also be sole shareholders.
-Proof of a secured annual income of at least EUR 30,000 deriving from abroad. This income must increase by EUR 5,000 for the spouse and every additional child and EUR 8,000 for each dependent parent.
- Confirmation letter from a Cyprus bank that they have deposited a minimum capital of EUR 30,000 from abroad into an account that will be locked for three years. After the expiration of this period, the money will be released without restrictions.
Length of process
The applicant needs to have committed to the investment prior to applying for the visa and funds must be in place in Cyprus before application. Such funds can be released in accordance with any payment plan agreed for the investment, particularly in the case of off-plan developments. However, an application can be made within a few days of committing to the investment. The process for gaining the Cyprus passport will then be completed within 6 months. A full refund can be offered for certain real estate investments in the unlikely case of refusal of the citizenship application. After 3 years the investment can be reduced down to a residential property worth €500,000 and this investment must be maintained in order for the investor to retain their citizenship.
Residential or Commercial Property
One of the key considerations when deciding between residential or commercial property in Cyprus is the rate of tax (VAT) that applies. Commercial property will attract VAT at a rate of 19% whereas residential property will attract just 5% on the first 200sqm of the first and main permanent residence property.
In addition to the investment, applicants will need a clear criminal record. There is no language requirement, medical test or interview. Very simple documents are required for the application. It is easy to apply and there is no requirement to stay in the country.
Qualifying family members include spouse, all children up to the age of 28 and all future generations. Parents can also qualify by making a further €500,000 investment in real estate.
Taxes for Residents and Non-Residents
Non-domiciled investors will be exempt from taxation in Cyprus for personal investment income including dividends and interest. This means that non-domiciled individuals will pay zero tax in Cyprus irrespective of whether the income is earned in Cyprus or abroad. There is no inheritance tax. Cyprus also has one of the lowest corporate tax rates in Europe at just 12.5%.
Living, Working and Studying
Applicants gain the full rights of EU citizens and have the freedom to live, work and study anywhere in the European Union. However, the Cypriot government is keen to encourage residency. Cyprus has the lowest crime rate in Europe. Cyprus is an ex British colony and a member of the Commonwealth that offers a high standard of living and affordable British education. An environmentally clean country, over 80% of the population in Cyprus speak English. At least three United Kingdom Universities have campuses in Cyprus.
Applicants gain a European passport allowing travel to 163 countries and districts without a visa. It includes multiple entry into Canada for six months and Australia, Singapore, Hong Kong and Macao for three months.