Citizenship by Exception Scheme: An EU Passport in just three months
The Cyprus government has this month revised the requirements for the increasingly popular "Scheme for Naturalization of non-Cypriot investors by exception" whereby through a Euro 2 million investment in Cyprus, a non-Cypriot citizen can legitimately acquire a Cyprus passport for himself and his dependents thus reaping the benefits of European citizenship.
The scheme’s immense success is due to various factors; the fact that it is the quickest procedure in Europe with one being awarded a passport within three months from the date of submission; there is no residency requirement (unlike jurisdictions such as Portugal and the Netherlands) and no donated amounts (as with the Maltese scheme) and most importantly and uniquely the applicant can dispose of their investment after three years. Furthermore, the applicant’s spouse and children up to the age of 28 can be included with no extra financial investment.
A major goal of the government’s political and economic policy in Cyprus in revising the scheme was to attract more foreign direct investment from high net worth individuals who wish to reside and/or bring their commercial operations to Cyprus. The scheme has been bettered in that it is simpler and more attractive to non EEA nationals Non-EU/EEA foreign nationals who wish to have dual citizenship.
The Benefits of Cyprus Citizenship by Exception Scheme
Residing in Cyprus is not a requirement when acquiring citizenship, however, many do given that Cyprus is a holiday destination island with an optimal standard of living. Cyprus is not only a tax haven; it is a tax haven in heaven and it is one of the safest European countries according to the United States Bureau of Diplomatic Security. Furthermore, the dependable legislation and regulatory framework, the attractive tax system and the impressive safety record that Cyprus holds makes Cyprus a tier one jurisdiction to invest in.
The procedure is extremely simple and straightforward. A non-Cypriot citizen will be eligible to obtain a Cypriot passport if the following four conditions are met:
He has a clean criminal record;
He owns a permanent residence in Cyprus worth in excess of €500,000 (plus VAT);
He possesses a residency permit noting that if the applicant does not have a residency permit, the application is made at the same time as the application for citizenship with no further requirements;
He satisfies any one of the Criteria listed below.
The applicant must make ONE of OR a COMBINATION of the following investments:
A.1 Investment in Real Estate, land Development and Infrastructure Projects
Investment in Cyprus of at least €2.000.000 for the purchase or construction of buildings or for the construction of other land development projects or infrastructure projects. The acquisition of land under development also qualifies as long as the application is accompanied by a development plan. Acquisition of agricultural land does not qualify as an investment.
A.2 Investment in Financial Assets of Cyprus companies/ organisations
An investment of at least €2.000.000 in the purchase or creation or participation in companies that are based and operating in Cyprus. The investment funds need to be utilized solely in Cyprus to finance the investment objectives of the business in accordance with a specific investment plan. The companies need to prove tangible presence in Cyprus and employ at least 5 citizens of the Republic of Cyprus and/or European Union. The number of required employees increases if more than one citizenship application is made utilizing the same company. In addition, the employees need to have a 5-year continuous presence in Cyprus prior to the application.
A.3 Investment in Alternative Investment Funds/financial assets of Cypriot companies/ organisations licensed by the Cyprus Securities and Exchange Commission (CySec)
An acquisition of at least €2.000.000 of financial assets of Cyprus enterprises regulated by the Cyprus Securities and Exchange Commission (CySec), such as units of Alternative Investment Funds and shares/bonds/bills/ securities debentures of Cyprus companies, (issuance regulated by CySEC).
It is imperative for the chosen investee company to have a physical presence and substantial economic activity within Cyprus and the funds should to be utilized to finance the investment objectives of the business in Cyprus in accordance with a specific investment plan.
A.4 Combination of the above investments.
A Cumulative investment of at least €2.000.000 in any combination of criteria A.1, A.2 and A.3.
In the combination, the applicant is allowed to invest up to €500.000 in Government Bonds of the Republic of Cyprus, as long as they are retained for 3 years. The bonds can only be accepted in the combination, if acquired directly from the Ministry of Finance; secondary market acquisitions are not allowed.
Through Holding a Senior Position in a Company
In case where a senior member of a company would like to apply for a Citizenship; this route allows for an application to proceed given that his/her remuneration in this said company creates a local tax revenue amounting to a minimum of €100.000 over a three-year period and whereby the company that he/she is employed by makes the required investments specified in any of criteria A.1, A.2, A.3 or A.4 on the applicant’s behalf.
1. Decide on the investment criterion. The applicant is required to invest in Cyprus, an amount of at least €2.000.000, in any one of a number of options (see below). The investment need only be kept for 3 years, after that period the applicant can dispose of the investment.
2. If required, purchase a residential property in Cyprus with a minimum value of €500,000 (net of vat). Note that in cases where the value of the residence exceeds €500.000, the excess can be utilized to complete the investment criteria of the €2.000.000.
3. Prepare the required citizenship documents and permanent residency application documents and submit them to the Ministry of Interior.
4. Receive your naturalisation certificate and passport within 3 months from the date of submission.
5. Apply for family members if required. The applicant’s spouse and any dependents up to the age of 28 are eligible to apply along with the applicant without satisfying further economic criteria
Family Members: How to apply
Cypriot citizenship may also be granted to the spouse, as well as to the minor children and 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.
Adult children of an investor are considered as financially dependent, if they are students up to the age of 28 and are attending an institution of higher education aiming to obtain a diploma or an undergraduate or a master’s degree. Note that individuals who are studying for the acquisition of a professional qualification (e.g. chartered accountants or barrister) or individuals who are studying for the acquisition of a second, third etc. diploma or degree (either undergraduate or master’s) are excluded.
Additionally, an investor’s child with severe physical or mental disability that makes him/her unable to work is also considered as financially dependent.
How We Can Assist
As a leading innovative firm, to cater to our client’s demands, we provide a one stop-shop for clients in relation to the citizenship application procedure as follows:
Assistance to the applicant with any choice for their investment in Cyprus.
Assistance with finding the ideal property to match the criteria via our strong network of reputable real estate agents.
Advice on the procedure and documentation necessary to apply for citizenship
Drafting the required documents and placing all the publications necessary in relation to the submission of the applications for naturalisation by exception.
Communication with the responsible ministries for clearance prior to submitting the application. Submission of the necessary applications and documentation to the Ministry of Interior.
Monitoring the status of the application and conducting personal meetings with the authorities.
Provision of legal advice on the preparation and drafting of agreements connected with the purchase of property in Cyprus and advice and support on employment law as well as corporate and commercial law.
Assistance with the opening of bank accounts at local banks.
Acting as escrow agents (if required) for the purchase price of the residential property to be purchased.
Please refer to our Cyprus Citizenship by Exception Scheme brochure for further information regarding Cyprus citizenship and how MPC Legal assist you.