The Cyprus Investment Program (CIP) is a profitable and economical way to obtain EU citizenship and the fastest way to obtain Cypriot citizenship.
One of the key features of this program is its investment policy, according to which citizens of non-EU countries (including citizens of Russia, Ukraine, UAE and China) can obtain Cypriot citizenship by making certain investments in the critical infrastructure.
The program was created to attract FDI to Cyprus to support the country's weakening economy. It is also attractive for investors wishing to register a research and technology company in Cyprus. In our blog post below, we look at the key changes the programme has recently undergone.
IQ Decision UK specialists provide assistance to investment projects in Cyprus.
Investment for citizenship
In recent years, the Cypriot authorities have made a lot of efforts to create a favourable business climate that encourages innovation. Cyprus is also attracting more property buyers. Tax breaks and a citizenship-for-investment program play a role. A series of government initiatives following the 2013 financial crisis attracted international property buyers to the island. Capital gains tax and stamp duty were cut, and the VAT cut on new dwellings from 19% to 5% is still in effect.
CIP amendments: causes and consequences
There are several reasons for the large-scale changes in the Cyprus investment program. Some of the innovations are due to pressure from the EU representatives who want to bring all programs of this kind to a single model. In addition, there are a number of changes that have been developed by the government of the island state, based on the results of the program over the past few years.
Thus, the influence of the EU can be seen in the increased requirements for the candidates and toughening the screening of those who apply. At the same time, the introduction of mandatory non-refundable contributions to state funds can be called the government’s attempt to use part of FDI to at least partially cover the social needs of the country.
Here are just some of the changes the CIP has undergone:
As before, every applicant for a Cypriot passport is offered several investment options. But if earlier these options consisted of the minimum allowed value of real estate, then in 2019 another 150 thousand euros were added to this amount of mandatory contributions to the Research and Innovation Promotion Fund.
Thus, the current options for investors in Cyprus look like this:
- investments in residential property from 2 million euros + 150 thousand euros in funds;
- investment in commercial property in the amount of 2 million euros + 500 thousand euros in housing + 150 thousand euros of non-refundable contribution;
- investments in securities of companies (including shipping companies) in the amount of 2 million euros + 500 thousand euros in housing + 150 thousand euros in funds.
- All options can be combined, the main condition is that the investor must leave the real estate in lifetime use no less than 500 thousand euros. The government believes that this condition guarantees close cooperation with investors in Cyprus, even if they do not plan to reside on the island.
- Investors in Cyprus under the CIP undertake to prepare annual reports on the implementation of their investment projects.
The Cypriot authorities have revised their requirements for the identity of the investor. Now the applicants who have not received citizenship in other EU countries will be cut off at the stage of filing. This decision should optimize the work of the commission and speed up the processing of applications.
Also, the government introduced a requirement for the applicant to obtain a short-term Schengen visa at the time of submission of documents. At the same time, if the investor is a resident of a state that gives visa-free access to the Schengen zone, there is no need to open a visa.
In some cases, when the investor has no visa, this will delay the process a lot. As a rule, investors are busy people and it is rather difficult to find time for visa processing due to the busy schedule. It is much easier when for registration it was enough to issue a promo visa to Cyprus, which could be done on the way to the airport. On the other hand, most investors already have Schengen visas these days. So this item is nothing more than a part of a checking procedure.
The final word
To take full advantage of the CIP, it is a normal practice to seek advice on the Cyprus investment regulation. Consulting on the implementation of investment obligations in accordance with the CIP will help you to thoroughly understand all the nuances of registration in accordance with the investment program. A good solution would be also to request advice on structuring an investment project in accordance with the CIP.
IQ Decision UK experts are monitoring the latest updates in the regulatory framework of this jurisdiction. We are ready to advise clients not only on the subject of the article but also to provide other services, from company registration in Cyprus to legal assistance in the settlement of investment disputes in Cyprus.