In February 2019 the Cyprus Council of Ministers approved changes to the Cyprus Investment Program that will come into effect from the 15 May 2019.
What is the Cyprus Investment Program?
The Cyprus Investment Program enables non-Cypriots who meet specific criteria and invest a certain amount of money in Cyprus property to become a citizen of Cyprus, an EU Country, gaining a Cyprus passport for themselves and their family. The program has become increasingly popular amongst high net worth individuals who, with a second passport reap the benefits such as international business, EU benefits and safety.
What Criteria has been Updated?
- A set number of 700 Applications per year under the CIP in the Republic of Cyprus.
- The investment is €2m if the investment is invested directly into residential real estate, this means buying a brand-new property.
- For resale properties, the investment amount increases to €2.5m.
- A donation of €75,000 to the land development organisation to fund affordable housing schemes will be required.
- A donation of €75,000 euro to the Research and innovation foundation.
- Applicants will now need to be in possession of a Schengen visa when applying
- Applicants who were denied passports by any other EU country for citizenship, will not be allowed to apply for Cypriot Citizenship.
- The investment will need to be maintained for 5 years instead of 3 years.
- During this 5-year period, the investor will be entitled to change his investment into other forms of permitted investments.
- Shipping will be included in the investment sectors.
- Investment in government bonds shall no longer be available.
- If the investment is in real estate, a planning permit must be in place.
- Due diligence and background checks shall be carried out by a specialized foreign firm.
Why has the Cyprus Investment Program been Updated?
The cabinet updated the criteria for the program in order to protect the financial benefits and ensure more direct investment into the creation of an eco-system of business innovation. Other donations will be used to provide financing to housing programs for affordable housing.
Stricter criteria will also be implemented to verify who can gain a Cyprus Passport. Following stricter due diligence procedures with the obligation for investors to hold a Schengen visa and the rejection of applicants who have failed to obtain passports from similar schemes.
Overall the changes ensure a secure financial future for Cyprus and a higher standard of criteria for applicants.
What is the Reaction to the Update?
With the changes set to be implemented on May 15th there have been an increase in applicants who wish to apply before the updates come into effect. According to news sources (phileleftheros), the increase could result in prematurely reaching the limit of 700 passports granted per year.
Although the update comes into effect on May 15th, it is possible that a slight extension may be granted to certain applicants, for example, those who already possess a bill of sale for a property but have not completed all the required paperwork. In these cases, if an applicant submits the bill of sale before May 15, but not the other documentation, the investor’s application could be assessed based on the existing criteria.