Cyprus has always been an attractive destination for those looking for outstanding lifestyle, a
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1 Cyprus Citizenship for foreign investors / businessmen January 2016 Introduction Cyprus has always been an attractive destination for those looking for outstanding lifestyle, a strong legal system and tax efficiency. In recent years, and despite the problems in its banking sector, Cyprus has become a popular European jurisdiction of choice for non-eu businessmen and investors who wish to explore alternative citizenship options. The Cyprus government programme for obtaining the citizenship by way of Naturalisation by Exception allows the investor, after a successful application, to obtain a Cyprus passport and enjoy all the benefits of a Cyprus and EU member state National. Legal Framework On the basis of a Council of Ministers Decision (dated 19 th March 2013 as amended on 24 Th May 2013) foreign investors / entrepreneurs can acquire the Cyprus citizenship by way of Naturalisation by Exception. Subsection (2) of Section 111A provides that the Council of Ministers may, under the conditions it determines as appropriate, to allow the Naturalization of foreign entrepreneurs. A non-cypriot citizen that fulfils one of the Financial Criteria (A), either personally, or via a company/companies in which they are a shareholder according to the percentage of their participation, or as highranking Managerial Key Person of a company/companies that fulfils one of the Financial Criteria (A), may apply for the acquisition of Cypriot citizenship by way of Naturalisation by Exception. Additionally, the aforementioned Decision of the Council of Ministers provides for the grant of the Cypriot citizenship to the spouse as well as the financially dependent adult children (eighteen years old or above) of the investor. Neither the spouse nor the children are obliged to meet any financial criteria. 1
2 In the case of the high-ranking Managerial Key Person, the application may be submitted provided that this person receives a salary from the particular company/companies that creates tax income for the Republic of at least 100,000 for a three-year period and provided that this amount has already been paid or it has been prepaid. The applicant must have concluded the required investments in the three years preceding the date of the application and must maintain the said investment for a period of at least three years from the date of Naturalisation. The applicant must, moreover, fulfill the Terms and Conditions included in Part B. In the event that in the course of periodical checks it is found that any Criterion or Term or Condition is circumvented, the Naturalisation may be revoked. Key Benefits All citizens of a European Union Member State including Cypriot nationals have the right to freely travel, live and work anywhere within the Member States of the European Union Entire family can obtain Cyprus citizenship (spouse of applicant, children under 18 years and adult dependent children (over 18 years) Persons obtaining the Cypriot citizenship will have the right to reside in Cyprus without the need of any further formalities (i.e. renewals etc) No requirement to physically reside in Cyprus either before the application or after obtaining the citizenship Free movement of capital, goods and services anywhere within EU. May buy property in any EU member state and invest in any activities 2
3 No need to give up an existing passport under the Cyprus Law (more than one passport is legal in Cyprus) No language test requirements for obtaining the citizenship. Financial Criteria One of the following financial criteria (or a combination where applicable) must be met by the main applicant : A.1 Investments in Government Bonds: The applicant must have invested in bonds of the Republic of Cyprus of at least 5,0 million. A.2 Investments in financial assets of Cypriot businesses or organisations: The applicant must have purchased financial assets of Cypriot businesses or organisations (e.g. debentures/ securities/ bonds registered and issued in the Republic of Cyprus) of at least 5,0 million. Such financial assets may have been purchased at first issue or subsequently through the market. A.3 Investments in Real Estate, Developments and Infrastructure Projects: The applicant must have invested at least 5,0 million for the purchase or the construction of real estate or the creation of other developments (residential or commercial developments, developments in the tourism industry or other infrastructure projects). A.4 Acquisition or incorporation or participation in Cypriot businesses or companies: The applicant must have purchased, registered or participate in businesses or companies that are registered and operate in the Republic of Cyprus, the investment being at least 5,0 million. The said businesses or companies must be proven to have physical presence in Cyprus and employ at least five (5) Cypriot citizens. It is provided that this criteria includes the obligatory conversion of deposits to shares. A.5 Deposits in banks: 3
4 The applicant must have personal fixed term deposits in Cypriot banks or deposits of privately owned companies or trusts (in which he/she is the beneficiary owner) in the Republic of Cyprus of at least 5,0 million for three years. A.6 A Combination of the above criteria A.1 A.5 A.1 (Investments in Government Bonds), A.2 (Investments in financial assets of Cypriot businesses or organisations), A.3 (Investments in Real Estate, Developments and Infrastructure Projects), A.4 (Acquisition or incorporation or participation in Cypriot businesses or companies) and A.5 Deposits in Cypriot Banks): The applicant is required to have a combination of the above amounting to at least 5,0 million A.7 Persons whose deposits with the Popular Bank Public Company Limited (Laiki Bank) have been impaired due to the measures implemented after the 15th March 2013 The applicant has incurred an impairment in deposits amounting to a total of at least 3,0 million. In the event that the applicant has incurred an impairment in his deposits under 3,0 million he /she may apply having made additional investments through criteria A.1 A.5 for the balance of the required amount of the said criteria. A.8 Major Collective Investments Where applicants submit an application as a group participating in an investment between criteria A.1 A.4 with a minimum total value of investment of at least 12,5 million, then the minimum criteria for each individual applicant is reduced to 2,5 million each (but the group of 5 applicants is required). It is additionally provided that the investments under criteria A1 to A4 may be done through a different seller/provider (physical or legal entity). 4
5 The brief summary contained in this bulletin is based on information provided as per the relevant Council of Ministers decision (dated 19 th March 2014) and the Frequently Asked Questions issued by the Ministry of Interior. These might change by the authorities in the future and as such it is essential that appropriate professional advice is obtained. ValueAchieve Business Services Limited will be glad to assist you in this respect. Contacts Spyros Christodoulides Managing Director Tel.: Mob: Fax: Maria Petridou Business Development Director Tel.: Mob: Fax:
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