Cyprus: Obtaining The Cypriot Citizenship By Investing

Last Updated: 4 October 2017
Article by Chryssafinis & Polyviou LLC

As part of the continuous effort to maintain Cyprus' reputation as a global financial centre, the Cyprus Government may grant the Cypriot Citizenship to foreign business persons and investors on the basis of exemption, provided that foreign applicants satisfy certain financial and other criteria. A successful application for the Cyprus Citizenship means that the applicant can enjoy all free movement benefits that apply to all European Union Citizens.

On the basis of the "Scheme for Naturalization of non-Cypriot investors by exception" (the "Scheme"), a non-Cypriot individual, who meets one of the economic criteria outlined in Part A below, either personally or through a company/ companies in which he/ she participates as a shareholder – in proportion to his/her holding percentage, or through investments done by his/her spouse or jointly with the spouse or even as a high-ranking senior manager of a company/ companies may apply for the acquisition of the Cypriot citizenship through naturalization by exception.

Also a high-ranking senior manager may apply, provided that he/she receives such a remuneration that generates for the Republic tax revenues of at least €100,000 over a three year period and provided that this tax has already been paid or prepaid.

It is important to note that the applicant should have made the necessary investments during the three years preceding the date of the application and must retain the said investments for a period of at least three years as from the date of the naturalization.

In addition, the applicant must fulfil the Terms and Conditions set out in Part B. In the case where, following a periodic inspection, it has been established that a criterion, term or condition of the Scheme has been breached, the granted naturalization may be revoked.

Investment Criteria

Namely, an applicant may acquire the Cypriot Citizenship through the Scheme, in one of the following ways:

Part A:

A1. Investment in Real Estate, land development and infrastructure projects:

The applicant must have made an investment of at least € 2.000.000 for the purchase or construction of buildings or for the construction of other land development projects (residential or commercial developments, developments in the tourism sector) or other infrastructure projects.

It is noted that investment in land for development is included in this criterion, provided that an investment plan for the development of the purchased land will be included in the application. It is understood that investment in land that is situated in a building zone of zero development rate, is excluded

A2. Investments in the purchase, incorporation or participation of Cypriot Companies or businesses:

The applicant should have proceeded with the purchase, incorporation or participation in companies or businesses established and operating in the Republic of Cyprus with investment costs of at least €2,0 million. The invested funds must be channelled towards the financing of the investment objectives of these companies or businesses exclusively and only in Cyprus, based on a specific investment plan.

The applications shall be evaluated to verify that the companies or businesses have proven physical presence in Cyprus, with significant activity and turnover and employ at least five (5) Cypriot or citizens of European Union member-states. The minimum number of employees shall increase, if more than one applicant invests simultaneously or almost simultaneously in the same business or company. In addition, the employees of the said companies need to have legally and continuously resided in Cyprus during the five years preceding the application submission date. 

A3. Investments in Alternative Investment Funds ("AIFs") or financial assets of Cypriot companies or Cypriot organizations that are licenced by the Cyprus Securities and Exchange Commission ("CySec"):

The applicant should have bought units of at least €2,0 million from Alternative Investment Funds (AIF) established in the Republic of Cyprus, licensed and supervised by the CySec and whose investments are made exclusively in the Republic of Cyprus, and the said investments must meet the criteria of this Scheme or in areas approved by the Minister of Finance.

In order to confirm that the investments that meet the criteria of the current Scheme will be kept for at least three years, the manager or the auditor of the Fund shall inform in writing and on an annual basis, the Ministries of Finance and Interior with reference to the value of the initial investment.

The purchase of financial assets of Cypriot businesses or organizations of at least €2,0 million, such as bonds, bills and securities, issued with the approval of the CySec, by companies that have proven physical presence and substantial economic activity in the Republic of Cyprus, and have as a purpose the financing of the investment plans of these businesses or organizations exclusively in Cyprus, based on an investment plan, fall under this criterion.

It is noted that the purchase by an AIF of units of other AIFs is not considered an eligible criteria for the Scheme.

A4. Combination of the aforementioned investments:

The applicant may proceed with a combination of the investments mentioned in A1 to A3 provided that the total amount of the investments will amount up to at least €2,0 million.

Within this criterion (combination of investments) the applicant may purchase special government bonds of the Republic of Cyprus, up to €500.000, which will be issued by the Public Debt Management Office of the Ministry of Finance, on condition that the investor will retain these bonds for a three year period.

Investments in government bonds through the secondary market are not considered eligible.

Further to the above, the following Terms and Conditions must apply.

TERMS AND CONDITIONS

  1. Clean Criminal Record: The applicant must submit a clean criminal record certificate from the Country of Origin certified by diplomatic means.
     
  2. Residence in the Republic of Cyprus: The applicant must own a private residence of at least €500.000 (five hundred thousand euro) market value plus V.A.T which must be situated in Cyprus. It is noted that members of the same family, who apply separately as investors, can collectively acquire a residence, provided that the total value of this home-property covers the amount of €500.000 per each applicant.
  3. Note: In case that the purchase value of the permanent privately owned residence in Cyprus exceeds the amount of €500,000, part of this additional amount can be used for purposes of supplementing the total amount of the investment made on the basis of the criteria of Part A above. Additionally, it is noted that if the applicant has invested in housing unit/units on the basis of the aforementioned criterion A.1, the purchase of another permanent residence in Cyprus will not be required, if at least one of these housing units is worth at least €500,000 plus VAT, provided that the applicant retains the possession of the residence for life. Thus in this instance the total investment by the applicant will be only €2,000,000.

  1. Residence Permit in Cyprus: The applicant, prior to his/her naturalization as a Cypriot citizen must hold a residence permit in Cyprus. If the applicant does not already hold a residence permit, he/she may apply for an immigration permit on the basis of Regulation 6 (2) of the Aliens and Immigration Law, simultaneously with the application for naturalization. If the application for acquiring an immigration permit is made solely for purposes of acquiring the Cypriot citizenship, in accordance with the provisions of this Scheme, there are no other conditions than those stated in both Part A and Part B of this Scheme.
  2. Note:  All of the above also apply for the adult members of the family of the investor, who will apply for naturalization. In case the application for naturalization is rejected for any reason, the immigration permit, obtained in accordance with the provisions of this Decision, will be cancelled immediately.

SUBMISSION OF DOCUMENTS

In order for the applications to be processed (application type M127) the following supporting documents must be deposited depending on each case. Namely:

1. Clean Criminal Record: Certificate of Clean Criminal Record from the country of origin and the country of residence (if different).

2. Residence in the Republic of Cyprus:

  1. Contract of Sale.
  2. Title Deeds or proof of registration of the contract with the Lands and Surveys Department.
  3. Proof of payment of the agreed purchase price.
  4. Copy of the wire transfer to a Cypriot commercial banking institution in the name of the seller or the seller's company.
  5. An evaluation certificate from an independent registered land surveyor, if required by the Ministry of Interior or the Ministry of Finance.

3. Criteria regarding the investment (when applicable):

  1. Certificate of Registration of the company/ companies by the Registrar of Companies.
  2. Certificate of shareholders by the Registrar of Companies or certificates evidencing that the applicant is the beneficiary owner of the company/ companies.
  3. Audited accounts of the company (or companies) for the last three years preceding the year of the application.
  4. If the applicant is a high-ranking senior manager, the submission of the employment contract and the receipt from the Department of Inland Revenue is additionally required.
  5. If the investment is made by the spouse of the applicant or jointly, a marriage certificate is required.

Furthermore, depending on the case, the following are required:

1. Investment in real estate, land development and infrastructure projects:

  1. Contract of sale.
  2. Title Deeds or proof of registration of the contract with the Lands and Surveys Department.
  3. Proof of payment of the agreed purchase price.
  4. Copy of the wire transfer to a Cypriot commercial banking institution in the name of the seller or the seller's company.
  5. An evaluation certificate from an independent registered land surveyor, if required by the Ministry of Interior or the Ministry of Finance.

2. Investment in financial assets of Cypriot companies or Cypriot organizations:

  1. Contract of sale.
  2. Proof of payment of the agreed purchase price.
  3. Certificate of shareholders by the Registrar of Companies.
  4. Copy of the wire transfer to a Cypriot commercial banking institution in the name of the company or the organization.
  5. Specific investment plan.
  6. Copies of the employment contracts of the Cypriot or European Union citizens employed by the company in which the applicant has invested.
  7. Confirmation from the Social Insurance Department as to the insurable income of the Cypriot or European Union citizens employed in the company.
  8. Copy of the Social Insurance Contributions for every Cypriot or European Union citizen employee.
  9. Registration Certificate (MEU1) or Permanent Registration Certificate of Union Citizen (MEU3) for employees that are European Union citizens.

3. Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by CySec:

  1. Title/Titles and other relevant documents of the financial assets / units purchased.
  2. Copy of the wire transfer to a Cypriot commercial banking institution in the name of the company or the organization.
  3. Specific investment plan.
  4. Confirmation by CySec.

4. Investment in government bonds:

  1. Proof from the Public Debt Management Office for the purchase of special government bonds.
  2. Copy of the wire transfer into a bank account of the Treasury of the Republic of Cyprus.

Members of the Family of the investor who obtain the citizenship (the "Investor")

The spouse, cohabitee, parents and children above the age of 18 but who are financially dependent on the Investor who has obtained the citizenship may obtain the Cyprus citizenship by filing an application to the Ministry of Internal Affairs (Form M 127).

In order to facilitate the procedure for the spouse and the cohabitee of the Investor they can apply for citizenship simultaneously with the application of the Investor when he files his own application.

The parents and the children of the Investor above the age of 18 but who are financially dependent on the Investor must file their application for citizenship by exception (Form 127) once the Investor has obtained his citizenship.

The parents of the Investor must own residential property in Cyprus of at value of at least €500,000 plus VAT. However the Investor and his parents can jointly buy a property of a total value of at least €1 million plus VAT.

Financially dependent children above the age of 18 are those that:

  1. Are students until the age of 28 and who study at a university - their main activity being their studies for obtaining a university degree, certificate, diploma, Bachelor or Mater. Studies for professional qualifications do not satisfy these requirements (such as Certified/Chartered Accountants, Barristers etc.);
  2. Persons with serious physical or mental disability which renders them unable to work.

IMPORTANT NOTE:

The designated Cypriot authority which approves the application is the Cyprus Council of Ministers which, notwithstanding compliance with the above conditions, exercises absolute discretion in the approval.

Our services and support for the duration of the application's approval procedure

Our offering of services and support will cover a variety of steps and stages. Namely:

  • Advice the applicant during face to face meetings with him/her on saisfying the required criteria including discussion and advice on actions that may be deemed necessary;
  • Thorough examination of the required documents in order to ensure that all the necessary requirements are met and that all the required documentation is of the appropriate standard;
  • Submission of a letter by Chryssafinis and Polyviou LLC addressed to the Minister of Interior accompanying the application by means of which our professional opinion would be presented and arguments will be stressed as to why approval of the particular application would constitute a benefit to Cyprus;
  • In addition to the above we are committed to a continuous monitoring for the duration of the approval procedure and briefing of the applicant.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.