Cyprus: Permanent residency and citizenship rules boost investment

Maria Nicolaou	Zoe Kokoni

Cyprus, one of the sunniest and safest locations in Europe, is an ideal location for both EU and non-EU nationals looking for a high quality standard of living. The recently introduced simplified procedures for issuing permanent residency and citizenship certificates in Cyprus have made this relocation much easier and have increased foreign investments into the island.

A Cyprus permanent residency can be obtained by investment in real estate. The programme requires investment in real estate with a minimum market value of €300,000 ($336,000) plus VAT, including proof of the initial payment of at least €200,000 (excluding VAT).

In addition to the above mentioned financial criteria, the applicants must fulfil the following requirements:

• Maintain a deposit in a Cypriot bank with a minimum balance of €30,000 from funds transferred from overseas (the amount requirement increases by €5,000 for each dependent child and €8,000 for each dependent parent);

• Have a clean criminal record;

• Visit Cyprus at least once every two years;

• Declare that they do not intend to work or to be involved in any form of business in Cyprus;

• Declare that they have a secured annual income from abroad; and

• Ensure that the applicant's name is not included in the list of persons whose property is ordered to be frozen by the EU.

Provided that the above criteria are met, the application shall be examined by the Minister of Interior and the permit should be granted within two months.

Third country nationals who hold the permanent residence status and reside in Cyprus for at least seven years may apply for citizenship.

In September 2016, Cyprus' Council of Ministers approved the amendments to the Scheme for Naturalisation of Investors in Cyprus by Exception. These amendments resulted in the required investment amount being reduced to €2 million in residential real-estate. The investment should either be made in person or through a company in which the applicant is a shareholder. The type of investment can be one or a combination of the following:

• Investment in real estate, land development and infrastructure projects;

• Purchase, establishment or participation in Cypriot companies or businesses; and/or

• Investment in alternative investment funds or financial assets of Cypriot companies or Cypriot organisations that are licensed by the Cyprus Securities and Exchange Commission (CySec).

Depending on the type of the investment, relevant documentation will have to be submitted as part of the application.

The investment may be sold after a period of three years provided that the investor maintains at least a property with a minimum value of €500,000.

The citizenship applicant may also add dependents to the application including his/her spouse, children (up to the age of 18 or between 18 and 27 if they are financially dependent on the main applicant) and parents (provided that they have purchased a permanent residence of at least €500,000 plus VAT).

The applicant is required to have a clean criminal report and it is also necessary that his/her name is not included in the list of persons whose property is ordered to be frozen by the EU. Additionally, prior to his/her naturalisation as a Cypriot citizen, the applicant must hold a residence permit in Cyprus or an immigration permit.

Obtaining the permanent resident status or citizenship status in Cyprus does not automatically translate to an individual also being a tax resident. Tax residency will depend on the number of days spent in Cyprus, whilst taxation rights of Cyprus will also depend on the domicile of an individual.

Maria Nicolaou (maria.nicolaou@eurofast.eu) and Zoe Kokoni (zoe.kokoni@eurofast.eu), Nicosia

Eurofast Taxand Cyprus

Tel: +357 22699222

Website: www.eurofast.eu