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Cyprus changes its rules for passport for investment scheme

by Yiannis Athanasiou / on 07 Jun 2019

The Cyprus government introduced significant new economic & procedural changes to the Cyprus Citizenship by Investment Program, by which investors obtain the Cyprus citizenship. The main objective of the changes is to encourage the creation of an eco-system for business innovation as well as to facilitate the creation of finance for affordable housing through the mandatory contribution to the Cyprus Land Development Corporation. The changes also aim to encourage investment in the shipping sector, as well as promote research & development activities & fund housing schemes. The main changes, are as follows:
• An obligatory donation of €75,000 to the Foundation for Research and Innovation, in order to promote entrepreneurship in Cyprus. An obligation that can be waived under certain conditions, ie where the investor shall invest in an innovative business which has acquired a relevant certificate by the ministry of finance or in a certified social company . The mandatory donation is also waived where the applicant has made an investment under the criterion “Buy or Set Up or Participation in Cypriot Businesses and Companies” amounting to at least 20% of the investment cost of the prerequisite amount (ie € 400,000 ) to a company operating in the primary sector of the economy or in the secondary sector of the economy, or in one of the fields of research and technology, education, health, and renewable energy.
• An obligatory donation of €75000 to the Cyprus Land Development Corporation, in order to implement affordable housing policies.
• The inclusion of investments in the shipping sector will be now included in the eligible investments, based on specific measurable criteria.
• The inclusion of investment in Registered Alternative Investment Funds in the eligible investments, as well as the possibility for these Organisations to invest up to € 200,000 in Cyprus Stock Exchange’s secondary market.
• In the case of residential units already used for the purposes of the Investment programme and are now reused under the same Programme, the provision stipulating that if the applicant has made investments in a residential unit (s) on the basis of criterion “Investments in Real Estate, Development and Infrastructure Projects” is not required to purchase another permanent private dwelling in the Republic of Cyprus if at least one of these dwellings is worth at least € 500,000 will be valid provided that the 3 total investment, including privately owned, is at least € 2.5 million.
• An applicant will now have to maintain his/her investment for 5 years from the date of naturalization, instead of the previous 3 years which was previously the case.
• Applicants will now have the right to change their investments during the 5-year period, provided prior consent is obtained from the Ministry of Finance.
• Where the investment relates to the purchase of real estate or property as well as in the case of a property used as a permanent residency the following will be required:
1. a planning permission issued by the Department of Town Planning and Housing in accordance with the Town and Planning Act (Ν. 90/1972)
2. a completion certificate signed by the architect of the project. When a property is under construction, 5% of the total value of the property should be maintained in a special account or a 5% bank guarantee should be issued in favour of the buyer.
3. In cases where there is a mortgage on the property, a bank waiver must be obtained, confirming the waiver of any rights upon receipt of payment for the mortgage shall be required.
• The main applicant should hold a valid Schengen visa (in case that a visa is required to enter European Union member states). The same applies for the investor’s adult family members that are eligible to apply for the acquisition of the Cypriot citizenship. A Schengen Visa is issued by any of 21 EU countries, plus Iceland, Norway, Switzerland and Liechtenstein, which enables its holder to move freely in the Schengen Area.Holding such a visa means that the applicant has been checked by all Schengen area countries and that none of them has rejected him before.
• An applicant who has applied for the acquisition of citizenship in any other Member State of the European Union and has been rejected will not be entitled to acquire Cypriot citizenship within the framework of the Cyprus Investment Programme.
• Reaffirmation that thee applicant should be in possession of a residence permit in the Republic of Cyprus for at least six months prior to naturalization as a Cypriot citizen.If the applicant does not already hold a residence permit, he will be able to apply for an immigration permit, on the basis of Regulation 6 (2) of the Aliens and Immigration Laws, at the same time as submitting the application for Naturalization, but be a holder of an immigration permit for a period of at least six months prior to naturalization as a Cypriot citizen.
• An Annual Implementation Report that includes the number of naturalizations, nationality of the applicants and the sector in which the investments were made will be prepared for the sake of transparency and correct information.
• Reaffirmation of the ban on the advertising of the Investment Programmes in public places and on the Internet, with particular emphasis on the visibility of the Cypriot passport and the symbols of the Republic and the EU.

The changes are expected to be in force in the upcoming months by the Ministry of Interior. The main objective of the changes is to enhancing trustworthiness and efficiency of the Cyprus Investment Programme as well as widening the investment opportunities with goal of benefitting the economy of Cyprus.

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