Naturalization of Persons
The Republic of Cyprus has established a scheme for naturalization of investors in Cyprus by exception (hereinafter the “Scheme”) as part of its policies to encourage foreign direct investments and attract high net worth individuals to reside and do business in Cyprus. The Scheme, as revised on the 13th of September 2016, provides for the granting of citizenship to non-Cypriot high-net worth individuals, investors and entrepreneurs subject to the fulfillment of certain criteria, terms and conditions as set out below.
Who can apply?
A non- Cypriot citizen may apply for naturalization by exception either personally or through a company/companies.
In case of an application through a company/ies, the applicant must either (a)participate in such company/ies as a shareholder – in proportion to his holding percentage, or (b) through investments done by his/her spouse or jointly with the spouse or (c) as a high-ranking senior manager of such company/ies that she/he receives such a remuneration that generates for Cyprus tax revenues of at least €100,000 over a three (3) year period and provided that this tax has already been paid or prepaid.
According to the Scheme, the applicant shall meet one of the below economic criteria:
1. Investment in real estate, land development and infrastructure projects:
The applicant must have made an investment of at least €2, 0 million for the purchase or construction of buildings or for the construction of other land development projects (residential or commercial developments, developments in the tourism sector) or other infrastructure projects.
It shall be noted that investment in land under development is included in this criterion, provided that an investment plan for the development of the purchased land will be included in the application. It is understood that investment in land that is situated in a building zone of zero development, is excluded.
2. Purchase or Establishment or Participation in Cypriot Companies or Businesses:
The applicant should have made a purchase or should have participated in companies or organizations established and operating in Cyprus with investment costs of at least €2,0 million. The invested funds shall be channeled towards the financing of the investment objectives of these companies exclusively in Cyprus, based on a specific investment plan.
The applications shall be evaluated to verify that the companies or organizations have proven physical presence in Cyprus, with significant activity and turnover and employ at least five (5) Cypriot or citizens of European Union member-states. The minimum number of employees shall increase, if more than one applicant invests simultaneously or almost simultaneously in the same business or company. In addition, the employees of the companies need to have legally and continuously resided in Cyprus during the five (5) years preceding the application submission date.
3. Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by Cyprus Security and Exchange Commission (hereinafter “CySec”)
The applicant should have bought units of at least €2,0 million from alternative investment funds (AIF) established in Cyprus, licensed and supervised by the CySec and whose investments are made exclusively in Cyprus, in investments that meet the criteria of this Scheme or in areas approved by the Minister of Finance.
In order to confirm that the investments that meet the criteria of the current Scheme will be kept for at least three years, the manager or the auditor of the Fund shall inform in writing and on an annual basis, the Ministries of Finance and Interior with reference to the value of the initial investment.
The purchase of financial assets of Cypriot companies or organizations of at least €2,0 million, such as bonds, bills and securities, issued with the approval of the CySec, by companies that have proven physical presence and substantial economic activity in Cyprus, and have as a purpose the financing of the investment plans of these companies or organizations exclusively in Cyprus, based on an investment plan, fall under this criterion.
Finally, it shall be noted that the purchase by an AIF of units of other AIFs is not considered eligible.
4. Combination of the aforementioned investments
The applicant may proceed with a combination of the above investments, provided that the total investment will amount up to at least €2,0 million. Within this criterion, the applicant may purchase special government bonds of Cyprus, up to €500.000, which will be issued by the Public Debt Management Office of the Ministry of Finance, on condition that the investor will retain these bonds for a three year period. The characteristics and the terms of these special bonds will be determined by the General and Special Issue Terms of the Government Bonds of Cyprus. Investments in government bonds through the secondary market are not considered eligible.
Terms and conditions
1. Clean Criminal Record;
2. Residence in the Republic of Cyprus:
· the applicant must possess a permanent privately-owned residence in Cyprus, the purchase price of which must be at least €500.000, plus V.A.T. ,
· members of the same family, who apply separately, can collectively acquire a residence, provided that the total value of such home-property covers the amount of €500.000, plus V.A.T. per each applicant ; and
3. Residence permit:
· the applicant, prior to his/her naturalization as a Cypriot citizen must hold a residence permit in Cyprus as below,
· in case the applicant does not already hold a residency permit, he/ she may apply for one simultaneously with the application of naturalization. If application for residency permit is solely for naturalization purposes, there are no other conditions other than the ones stated in the Scheme.
Submission of documents
Specific documents must be submitted and, depending on the case, additional documents will be required.
Further to the list provided by the ministry of interior of Cyprus, additional documentation may be requested by either the Ministry of Interior or the Ministry of Finance for evaluation purposes.
· in addition to the above-listed criteria, terms and conditions, it is required that the necessary investments should have been made by the applicant during the three (3) years preceding the date of the application and the applicant must retain the said investments for a period of at least three (3) years as from the date of the naturalization;
· the Cabinet of Ministers has absolute discretion in deciding whether or not to grant a citizenship to the applicant;
· in the case where, following a periodic inspection, it has been established that a criterion, term or condition of the Scheme has been breached, the granted naturalization may be revoked; and
· the Scheme provides for the grant of the Cypriot citizenship to the spouse or partner of the applicant, to the parents of the applicant (subject to the requirements set out therein) and to the financially dependent adult children of the applicant as well (as these are defined therein). The spouse or partner of the applicant may acquire the Cypriot citizenship after filing the relevant application but it is understood that the Council of Ministers allows for the submission of the spouse’s or partner’s application along with the applicant’s application so that they will both acquire the Cypriot citizenship simultaneously. As regards the minor children, the adult children and the applicant’s parents their application shall be submitted after the applicant has acquired the Cypriot citizenship. Moreover, it shall be noted that the adult family members of the applicant prior to their naturalization as Cypriot citizens must hold a residence permit in Cyprus.
A residency permit may be issued to any person who is a third country nationals (the “Applicant”), provided that such person fulfills the following criteria:
(a) The Applicant must prove that he/she has at his/her disposal a secured minimum annual income of €30,000, from sources other than employment in Cyprus. The required income of €30,000 could derive from salaries of employment abroad and not in Cyprus, pensions, stock shares, rents, etc. The necessary minimum annual income is increased by €5.000 for each dependent person of his/her family (spouse/partner and children) and by €8.000 for every dependent parent or parent-in-law.
(b) The Applicant must submit the application form accompanied with a Title of ownership or contract of sale, of a property in Cyprus, a house, apartment or other building, in his/her name and/or the name of his/ her spouse, of a minimum market value of €300,000 and proof of payment for at least €200,000. The contract of sale should already have been submitted to the Department of Lands and Surveys.
Further it is noted that the real estate purchase may be accepted even when made in the name of a legal person, provided that (i) the applicant and/or his/her spouse are the sole shareholders or the ultimate beneficial owners of it, and (ii) the legal person is legally established in the Republic of Cyprus or other member state of the European Union or European Economic Area.
Also, it shall be noted that the purchase must be in relation to a property sold for the first time by a development company.
(c) The Applicant must submit a confirmation letter from a Cypriot Bank stating that he/she has deposited a minimum capital of €30.000 in an account, which will be pledged at least for a three year period.
It is noted that the amounts mentioned in paragraphs (b) and (c) should be proven to have been transferred to Cyprus from abroad.
(d) The applicant must submit a Criminal Record Certificate (if the applicant resides abroad), which must be issued by the Authorities in his country of origin, and he should not constitute in general any threat against public order or security in Cyprus.
(e) The applicant should submit a Statement that he does not intent to work or be engaged in any form of business in Cyprus.
(f) The applicants should visit Cyprus at least once every two years.
The application should be submitted on the prescribed form to the relevant authority personally or through post or through a representative.
It is estimated that when applying the procedure described above, the period for the examination of the application, shall not exceed a period of 2 months.
The residency permit issued to an applicant covers his/her spouse and children under the age of 18.
Note however that the residency permit does not provide visa-free travel to other EEA Member States.
For further information please contact us at:
Clerides, Anastassiou, Neophytou LLC
Tel: +357 25 274050
This material has been prepared by professionals of Clerides, Anastassiou, Neophytou LLC. It is intended as a general guide only, and its application to specific situations will depend on the particular circumstances involved. Accordingly, we recommend that readers seek appropriate professional advice regarding any particular problems that they encounter. This information should not be relied upon as a substitute for such advice. While all reasonable attempts have been made to ensure that the information contained herein is accurate, Clerides, Anastassiou, Neophytou LLC accepts no responsibility for any errors or omission it may contain or any opinions contained herein whether caused by negligence or otherwise, or for any losses, however caused, sustained by any person that relies upon it.
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