The Citizenship by Investment program is a significant and highly discussed topic nowadays. Investors from around the world wish to obtain additional citizenships, as they consider such additional passports as a realistic intangible asset that will stay and pass over to their families for generations to come.
With certainty, some programs may not carry on forever. For that reason any investor that wishes to obtain such additional citizenships should operate in a fast manner.
The approach for dual citizenship, even though it had tentatively begun around 2006, nowadays thrives since many governments enhanced this approach by making their “Citizenship investment product” intentionally attractive enough, aiming at increasing the inflow of investor capital to their countries.
Currently, with this strategy new opportunities arise for investors and entrepreneurs since they have the legal right to obtain a second password if they choose so. The great philosophy behind such immigration investment schemes is that individuals can benefit in various ways by obtaining additional citizenship via investment. Primarily, they will obtain a new and additional passport for themselves and their families. Secondly and importantly as well, this can be achieved with a smart investment decision that at the same time will generate profit for them.
Some of the predominant characteristics that constitute a high-quality “Citizenship investment product” are: the mobility offered by the passport, the reputation of the country in respect to safety, lifestyle, culture, geographical position, health providence, legal environment, corporate law etc. as well as the investment opportunities they may obtain on an individual and corporate level, the taxation system, the political situation, the quality of life and the privilege of safeguarding their anonymity rights and of course the economic growth.
At the spotlight of this article is the Cyprus Citizenship investment program since it is considered to be one of the strongest in the world. It is noteworthy that according to the Passport Index of 2017, the Cyprus passport was classified 13th at Passport Power Ranking, 37th at an individual Power Rank globally and achieved a remarkable Visa Free Score of 147.
The Council of Ministers of the Republic of Cyprus, on the 13th of September 2016, proceeded with an amended Regulation in relation to the Scheme for Naturalisation (Citizenship) of Investors in Cyprus by Exception, in order to further enhance the “Citizenship by Investment product” of the country.
The announced modifications rendered the EU|Cyprus citizenship even more attractive to investors, since the threshold of investment has been reduced to €2 million from €2.5 million, altogether.
An additional important positive change of the new scheme is that the parents of the main applicant are also eligible to apply and obtain the Cyprus/EU citizenship provided that they purchase a housing property of at least €500.000 (therefore they will not need to proceed with another main additional investment).
Briefly, the updated scheme is as follows:
1. Investment of €2,000,000 (two million Euros) - (important note: the investment should only be preserved for 3 years – upon expiration of the 3 year period the investor can sell / cash in his / her investment)
Α.1 Investment in real estate, land development and infrastructure projects:
The applicant must have made an investment of at least €2 million 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 under 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, is excluded.
Α.2 Purchase or Establishment or Participation in Cypriot Companies or Businesses:
The applicant should have made a purchase or should have participated in companies or organizations established and operating in the Republic of Cyprus with investment costs of at least €2 million. The invested funds shall be channelled towards the financing of the investment objectives of these companies exclusively in Cyprus, based on a specific investment plan.
The applications shall be evaluated to verify that the companies or organizations 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 companies need to have legally and continuously resided in Cyprus during the five years preceding the application submission date.
Α.3 Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by CySec:
The applicant should have bought units of at least €2 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, in investments that 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 companies or organizations of at least €2 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 companies 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 eligible.
Α.4 Combination of the aforementioned investments:
The applicant may proceed with a combination of the above investments, provided that the total investment will amount up to at least €2 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. The characteristics and the terms of these special bonds will be determined by the General and Special Issue Terms of the Government Bonds of the Republic of Cyprus. Investments in government bonds through the secondary market are not considered eligible.
A reasonable question may arise at this point as to whether the decision of selecting a Citizenship investment program should only be based on the criteria offered by the scheme.
Our suggested answer to this question is that it is dependent on several factors. It is certain that each case is unique, since there are different and many variable parameters that should be taken into consideration, in order to reach the best possible decision.
For example: a reside investor / entrepreneur of a non EU member state, who aims to acquire a strong fast passport; reduce corporate tax percentage (%); wishes a free unlimited access to Europe; have the ability to invest in real estate projects or companies with a high return on investment rate (ROI); to have the choice of several options concerning the types of company formation, which shall ultimately lead to a stable, safe and flexible environment, will most probably conclude that Cyprus is the right choice him / her.
Benefits as to why should someone choose a Cyprus passport:
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