As of May 2nd 2023, the Cyprus investment program in respect to the immigration permits to third-country national investors will be governed by a stricter framework following a proposal by the Minister of Interior. This decision aims to shield the process and eliminate a number of weaknesses observed. In combination with the framework relating to the Residence and Employment permit of companies of Foreign Interest (please refer to https://www.flexi-group.net/post/cyprus-work-and-residence-permits for an in-depth review) it is evident that the Republic of Cyprus is fast becoming an attractive international business hub suited for “fit and proper” investors and corporations alike.
Main Investment Criteria
As per the new criteria, the applicant shall invest at least €300.000 in one of the following categories:
Investment in house/apartment: Acquisition of a residence (either house or apartment) from a development company, which should be a first sale of at least €300.000 plus VAT.
Investment in real estate: Acquisition of any type of real estate (offices, shops, hotels or similar developments or combination of these) with a total value of at least €300.000. These acquisitions could derive from the resale of real estate and does not necessarily need to be a first sale.
Investment in the share capital of a Cyprus company with activities and staff in the Republic: Initial investment of €300,000 in the share capital of a new company or an increase in the share capital of €300,000 for an already-existing company registered in the Republic of Cyprus that is headquartered and conducts business here, has a demonstrable physical presence there, and employs at least five persons.
Investment in shares of a Cyprus Investment Organization for Collective Investments (type AIF, AIFLNP, RAIF): Investment worth €300,000 in shares of a Cyprus Collective Investment Organization whose investments should be made in the Republic of Cyprus
It is of utmost importance to note that the new policy aims to institutionalize a control mechanism for compliance with the criteria and maintenance of the investment through the introduction of a new provision:
“The applicant will now be required to submit on an annual basis evidence that he maintains the investment, that he maintains the required income determined for him and his family, and that he and his family members hold a health insurance certificate in in case they do not continue to be beneficiaries of GHS.
It is understood that, in case the holder of the immigration permit fails to prove the above, it will entail the activation of the process of cancelling the permit of himself and his family members.”
Furthermore, the following are being covered by the new policy:
Payment methods and money transfers to Cyprus:
The new policy stipulates that “the money to be used for the investment should be proven to come from abroad from the account of the applicant himself and/or his spouse, provided that he is included as a dependent in his application. The amount of the investment value should be paid into the seller's account in a Cypriot financial institution.”
Time of relocation and minimum residence time
Notably, an amendment to the legislation will be promoted in respect to the time of relocation and minimum residence time. The suggested amendment will include the period in which the applicant is obliged to relocate in Cyprus as well as, the minimum residence time in the Republic in order for someone to be considered a permanent resident.
Additional Investment Criteria
An important change that has occurred with the 2021 amendments to the Cyprus Investment Program is the abolition of the previous criterion for the existence of a term deposit. The previous scheme required a term deposit of €30.000 for three years in a Cyprus bank account. This term has now been removed, shortening the time it takes to prepare an application, as in fact the bank account opening delayed the process by a few weeks.
In addition to the investment, the applicant should be able to prove that they have at their disposal an insured annual income of at least €50,000. The annual income is increased by €15,000 for the spouse and €10,000 for each minor child.
If the applicant decides to invest in a house or apartment, this income may come from work-related wages, pensions, shareholder dividends, permanent deposits, rents etc. deriving from sources abroad and can only be proven via their tax returns of the country in which he is a tax resident. The total income takes into consideration the spouses’ income as well.
Should the applicant proceed with an investment in real estate (apart from residential buildings), in the share capital of a Cyprus company with activities and staff in Cyprus or in shares of a Cypriot Collective Investment Organization, the total income or part of it may also derive from activities within Cyprus, provided that such income is taxable in the Republic.
The applicant and their spouse must provide a clean criminal record from their country of origin and their country of residence (in cases where these differ) and prove that they do not pose any threat to public order or public security in any way.
A number of quality criteria have also been included in the new policy:
The applicant and their dependents shall submit a health insurance certificate for medical treatment for both inpatient and outpatient care
The applicant and their spouse shall confirm that they do not intend to be employed in Cyprus, with the exception of their employment as directors in the company they invest into under the policy
In cases where the investment does not concern the share capital of a company, the applicant and their spouse may be shareholders in companies registered in Cyprus and the income from dividends in such companies shall not be considered an obstacle for the purposes of obtaining the immigration permit. They may also hold an unpaid directorship position in such companies.
If the applicant decides to invest in real estate (excluding residence buildings), in the share capital of a Cypriot company with operations and personnel in Cyprus, or in shares of a Cypriot Investment Organization for Collective Investments (type AIF, AIFLNP, RAIF), they must provide documentation proving their and their family's residence in the Republic (such as a property title deed, sales document, or rental document).
In cases where the applicant chooses to invest in a house/apartment, but the number of bedrooms of the investment property cannot satisfy the needs of their dependent family members, they should indicate another property or properties which will constitute the residence of these persons (e.g. property title deed, sales document, rental document).
The application will be sent to the Minister of the Interior for review and decision-making if all the requirements of this policy are satisfied and there are no issues with the applicant's criminal history or issues with public order and security.
It is estimated that the timeframe for the examination of the application from the day of submission will be approximately two months..
Important General Notes
According to the new criteria, the policy covering an applicant’s depends changes to:
“The immigration permit is issued to the applicant. This includes the applicant's dependents who are the spouse and their minor children under the age of 18.
If they so wish, it is possible to issue two separate immigration permits to each of the parties of the couple without the obligation and the second one to meet the above criteria, provided that a separate application is submitted and the corresponding fee is paid.
Provided that in the event that an immigration permit granted to the investor is cancelled for any reason, it will entail activation of the permit cancellation procedure for the other part of the couple, based on the provisions of Regulation 6, of the Foreigners and Immigration Regulations.”
Based on the aforementioned, the policy does no longer cover the granting of an immigration permit to adults who have not invested themselves in Cyprus through proof of additional income by the investor and without having their own place of residence.).
It is important to note that as per the 2021 amendments it is no longer possible to combine investment categories. While in the past, the combination between residential and commercial real estate was permitted as long as the total investment amount was € 300.000, now, the investor has to choose one of the categories and invest the minimum amount required in a single category.
*DISCLAIMER: This article and its publication are intended to provide a brief introduction and act as a general guide. This is provided for information purposes only and cannot be utilized as a substitute for professional advice. This document does not represent a legal opinion and one must not rely on it without receiving independent advice based on the particular facts of its own case. No responsibility is accepted by the author or the publishers for any loss suffered from acting or refraining from acting based on the contents of this publication.
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