Naturalisation of Investors in Cyprus by exception
The Council of Ministers introduced on 13/09/16 a scheme pursuant to which third country nationals may acquire citizenship through naturalisation by exception by satisfying certain investment/economic criteria, which was recently amended by the Council of Ministers on 13/02/19.
As per the criteria of this investment scheme, the requisite investments should have been made by the applicant three (3) years preceding the date of the application and the applicant is required to retain the said investment for a period of at least three years from the date of naturalization and as amended for applications that are submitted from 15/05/19 and onwards the applicants must retain their investments for a period of at least five (5) years.
A non – Cypriot citizen may apply for the acquisition of the Cypriot citizenship through naturalisation by exception if he/she meets the following economic criteria and terms and conditions:
1.Investment in real estate and land developing
A direct investment in Cyprus of at least €2,0 million (excl. VAT) for the acquisition or development of real estate projects, including residential or commercial developments, developments in the tourism sector, or other infrastructure projects. The acquisition of land is not considered as a qualifying investment under this section.
If the applicant has invested in housing units/units on the basis of this section, then the purchase of another permanent residence in Cyprus will not be required, if at least one of the housing units is worth at least €500.000 (excl. VAT). It should be noted that applications filed after 15/05/19 and relate to investments in housing units the total investment in housing units including the permanent residence should at least be €2.5 million.
2.Purchase or participation in Cypriot businesses or companies
An investment of at least €2,0 million (excl. VAT) in the purchase or participation in business or companies, that are based and operating in Cyprus. These businesses or companies should have a tangible presence and substantial activity in Cyprus, as well as employ at least 5 employees that are Cypriot or EU citizens who have been legally residing in Cyprus for a continuous period of at least 5 years preceding the submission of the application.
3.Investment in Alternative Investment Funds (AIFs) or financial assets of Cypriot companies or organizations
An investment of at least €2,0 million (excl. VAT) in units from AIF, bonds, debentures or other securities established in Cyprus in companies or organisations with substantial economic activity in Cyprus which are licensed and regulated by the Cyprus Securities and Exchange Commission (CySec). The purchase by an AIF of units of other AIFs does not satisfy the requirements of the Scheme.
4.Combination of investments
The above investments can be combined, with a total investment amount of at least €2.0 million (excl. VAT). Such combination may also comprise the acquisition of government bonds of the Republic of Cyprus, up to €500.000.
One of the amendments introduced by the Council of Ministers on 13/02/19 is the requirement for the invenstors that file applications from 15/05/19 and onwards to make a contribution to the Research and Development Foundation of Cyprus of at least €75.000 and a contribution to the Cyprus Land Development Corporation of at least €75.000.
5.Terms and Conditions
- The applicant must have a clear criminal record and not be included in the sanctions list.
- Own a permanent privately-owned residence in Cyprus of a market value of at least €500.000 (excl. VAT) that must be retained for a lifetime. If members of the same family apply separately as investors, they can collectively acquire a residence provided that its total value covers the amount of €500.000 (excl. VAT) per applicant. The Scheme does not impose a requirement to reside in Cyprus after obtaining the Cyprus passport.
- The applicant must hold a residence permit in Cyprus before obtaining the Cyprus citizenship.
- Schengen Visa (applicable from 15/05/19 onwards). The applicant must be a holder of a valid Schengen visa unless such visa is not required to enter into a Member State or when the applicant is a national of an EU state.
Category F - Fast Track Procedure under Regulation 6 (2)
Category F scheme applies to non-EU nationals, who possess and have a secured annual income, high enough to give them a decent living in Cyprus, without having to engage in any business, trade or profession and are not entitled to work. This income must come from legal sources from legal sourches from abroad, for example, it could derive from pensions, permanent deposits, business activities, ownership of companies, shares etc.
The following conditions must be satisfied for the issuance of the permit:
a.the applicant should prove that he has at his disposal a secure annual income of at least €30.000. This annual income is increased by €5.000 for every dependent person. This income must derive from abroad and may include salaries from employment, pensions, dividends from shares, fixed deposits, rents etc.
b.the applicant should deposit a minimum capital of €30.000 that must be tranferred to Cyprus from abroad, into an account, which will be pledged for a period of at least three years.
c. the applicant should submit, with the application, title deeds or a contract of sale in his name and/or his spouse, which has been officially deposited with the Department of Lands and Surveys, of a real estate of at least €300.000 (excl. V.A.T.) and official receipts for the payment of at least €200.000 (excluding V.A.T.).The full payment of the value for the real estate shall be settled in an account in a financial institution in Cyprus. It should be noted that the purchase of the property must be in relation to a property sold for the first time by a development company.
d. the applicant must submit a confirmation of a clear criminal record from his/her country of residence and generally should not be considered as a threat in any way to the public order or public security in Cyprus.
e. the applicant will need to confirm that he/she does not intend to be employed in Cyprus in any direct or indirect manner. It should be noted that the applicant and/or his spouse may be a shareholder(s) in a Company registered in Cyprus and the income from the dividends of such a company in Cyprus are not deemed an impediment for the purpose of obtaining an immigration permit.
f. the applicant and his family included in the Immigration Permit, must visit Cyprus at least once every two years.
g. the duration for the issuance a residence permit under Regulation 6 (2) shall not exceed a period of 2 months from the date of the submission of the application, as it is considered as a fast track procedure.
Frequently Asked Questions
1.What is the Cyprus Investment Programme?
The Cyprus government introduced the Cyprus Citizenship by Investment Programme in order to inspire foreign investors and people of the business world to initiate their business and investment plans in Cyprus. The Cyprus Citizenship by Investment Programme provides investors and their families the opportunity to obtain Cyprus passports
2.Which other family members are entitled to obtain Cypriot citizenship along with the investor/applicant?
The Cyprus Investment Programme allows for the dependents of the applicant to also obtain the Cypriot citizenship. Under the Investment Programme, the following are eligible dependents:
a) The spouse / partner of the applicant
- submission of the spouse’s or partner’s application along with the application of the investor to acquire the Cypriot citizenship simultaneously
b) Children under the age of 18
- submitted after the investor had acquired the Cypriot citizenship and provided that the other parent consents to the grant of the citizenship
c) Adult children up to the age of 28 who are full-time students and financially dependent on the principal applicant
- excludes individuals who are studying for the acquisition of a professional qualification (e.g. chartered accountants or barrister)
d) Adult children with severe physical or mental disability that renders them unable to work.
- application can be submitted after the investor had acquired the Cypriot citizenship
e) The investor’s parents are entitled to apply for citizenship provided if:
i.they hold a permanent privately-owned residence in the Republic of Cyprus, the purchase price of which must be at least €500.000, plus V.A.T. or
ii.the investor and his/her parents, may collectively acquire a residence, provided that the total value of this home-property is at least €1.000.000, plus V.A.T.
- Application can be submitted after the investor had acquired the Cypriot citizenship
3.What steps the investor should follow prior the submission of the application?
a) The applicant must proceed to the investments and purchase a residence in Cyprus with a minimum value of €500,000 and
b) The applicant, prior to his/her naturalization as a Cypriot citizen must hold a residence permit in Cyprus for a period of at least 6 (six) months or
c) If the applicant does not already hold a residence permit can apply for an immigration permit, simultaneously with the application for naturalization.
4.How long does it take, considering the examination process, to obtain citizenship through the Cyprus Investment Programme?
Once the application is submitted, the examination by the authorities and the issuance of the citizenship/passport may take from six (6) to twelve (12) months to be processed.
5.What does it mean by: “The applicant should have concluded 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 since the date of the Naturalization?”
The investor, in order to apply for citizenship under the Investment scheme, must have completed the investment during the three years prior the submission date of the application. For example, if the applicant submits an application on 5th October 2020, the investment must have been completed through the period from 5th October 2017 to 5th October 2020.
Additionally, the investor is required to maintain the investment for at least three years following the acquisition of the Cypriot citizenship. The three-year period commences on the date that the certificate of naturalization is issued, given that the investor has sworn before the Court Registrar his oath of allegiance to the Republic of Cyprus.
6.What kind of investment is required?
In general, an investment of €2m is required. The investor must own a permanent privately-owned residence in Cyprus, purchased for at least €500.000.
7.There are various options for investing, and an applicant may choose one of the following:
- Investment of at least €2m, for the purchase or participation in companies or organizations established and operating in the Republic of Cyprus with investment costs of at least €2m, which needs to be also maintained for three years;
- Investment of at least €2m 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.
- Investment of at least €2m for the acquisition of units from alternative investment funds (AIF) or Registered Alternative Investment Funds (RAIF) established in the Republic of Cyprus
Note: The applicant may proceed with a combination of the above investments, provided that the total investment will amount up to at least €2m
8.The applicant, prior the date of application, already owns a residential property in Cyprus. Is he/she still required to purchase an additional property?
In case the existing property is worth of at least €500,000, then the applicant is not required to purchase any additional property. In case the value of the existing property is less than €500,000, then the applicant must acquire an additional residential property.
9.If there is a difference between the market value and the purchase value of a property, which amount is taken into consideration for the examination of the application?
The purchase value of the property.
10.Can the investor sell his/her privately-owned residence and purchase a different one of the same or higher purchase price?
Yes, but only if the investor buys a different residence of an equal or a higher purchase value.
11.Could a real estate sold for a second time be considered as an investment for the purposes of the Investment Programme?
According to the contents of the Council of Ministers’ Decision, the eligible investment is not limited to new properties.
12.Does the applicant need to reside in Cyprus prior the acquisition of the Cypriot Citizenship through the Investment Programme?
No requirement of minimum duration of physical residency applies prior the approval of the Cypriot passport application. It is compulsory for applicants to visit Cyprus once, prior the issuance of the passport, in order for the relevant authorities to be able to obtain Biometrics of the applicants and also for the applicant to be able to receive/issue a permanent residency permit.
13.Is the applicant required to reside in Cyprus after he/she has acquired citizenship in order to retain it?
14.Does the Cyprus Investment Programme expire?
15.What are the benefits of a Cypriot Passport under the Cyprus Investment Programme?
- The Programme provides access to 171 visa-free destinations.
- Once acquired, it is valid for life and is passed on to spouse and dependent children
- The process lasts from 6 to 12 months
- A Cyprus passport holder is also a holder of a European Union passport