Cyprus Citizenship

CYPRUS CITIZENSHIP BY EXCEPTION TO FOREIGN INVESTORS /ENTERPRENEURS

“Citizenship by exception” is explicitly directed towards entrepreneurs with significant value of assets and investments in Cyprus. This special program for foreign investors is regulated by the Ministry of Interior and is examined by the Council of Ministers.

On the 24th of May 2013, the Council of Ministers amended the criteria and conditions previously set regarding the acquisition of Cypriot Citizenship. As a result, and by the authority granted to them under paragraph 2 of the Article 111A of the Civil Registry law 2002 - 2013, the Council of Ministers laid out the following parameters for obtaining Cyprus citizenship by exception.

Non-Cypriot citizens are entitled to apply for obtainment of Cyprus Citizenship by exception, if they fulfill one of the six following criteria:

THE FINANCIAL CRITERIA ARE LISTED AS FOLLOWS:

1. Mixed Investments and donation to State Fund:

The Applicant must have made the following investments and donation:

a) amount of at least 2 million Euros for the purchase of shares and/or bonds of the under formation investment company of the state and;

It is implied that the Applicant is able to deposit the said amount to the Treasury of the state until issuance of the shares and/or bonds of the said company.

b) Amount of at least 0,5 million Euros as donation to the Research and Technology Fund.

Whether you are only temporarily residing in Europe, or considering an application for European Citizenship, Cyprus is your solution.

The Island is the crossroad of three continents and more importantly it is a vital gateway to the European market, thus constituting a truly attractive business and investment destination. However, by acquiring Cypriot citizenship, you are also securing a future for yourself and your family. Amongst many other benefits, Cyprus offers high level of professional services and a well-trained labour force; excellent telecommunications and air connections; low crime rate; excellent schools and universities; and a warm Mediterranean climate.

This article endeavors to outline the criteria required for eligibility to apply for Cypriot Citizenship.

2. Direct Investments:

The Applicant must have direct investments in Cyprus of at least 5 million Euros. The direct investments may alternatively be with regards to the following:

a) purchase of immovable property (residential, offices, shops, hotels etc. or developments of similar nature, with exception to unutilised land),

b) purchase of enterprises or companies that reside and are active in the Republic of Cyprus

c) purchase of shares of companies registered in the Republic of Cyprus

d) purchase of monetary assets (e.g. bonds/securities registered and issued in the Republic of Cyprus, including those that will be issued by the Solidarity Fund based on the National Solidarity Fund Law of 2013)

e) participation in company/partnership of companies that has undertaken the materialisation of public works.

It is implied that for the conditions (a) – (d) the Applicant will have in his/her possession the said assets for a period of at least three years. In the case of portfolios of shares or bonds, it should be ensured that the value of the portfolio for the said period will not be decreased to under the specified amount.

3. Deposits in banks:

The Applicant must have personal deposits in Cypriot Banks or deposits of his/her private company/ies or trust/s (of which the beneficiary is themselves) in the Republic of Cyprus of at least 5 million Euros of a fixed term of three years.

The deposits must remain bound in Cypriot Banks for a period of no less than 3 years. In case it is revealed from periodic inspections that this condition is not strictly followed, Cyprus naturalization may be revoked.

4. Combination of Mixed Investments and Donation to State Fund (1), Direct Investments (2) and Deposits in Cypriot Banks (3):

The Applicant must possess a combination of the above financial criteria (1) to (3), coming to 5 million Euros.

5. Business Activities:

The Applicant must be a shareholder or beneficial owner of a company (or companies) - the management of which must be in the Republic of Cyprus - and the last 3 years prior to the submission of the application must have paid at the State Treasury corporate tax, V.A.T. or other rights or fees such as those for the purchase of business services (legal, accounting, audit) the amount of at least €500.000, annually.

Alternatively:

In case the Applicant is a shareholder or beneficial owner of a company (or companies) that is active in Cyprus, with the main office situated in Cyprus, and employs at least five (5) Cypriot citizens, then the minimum amount that must have been paid for the above (direct income – corporate tax, V.A.T. or other rights and fees etc. and fees for purchase of business services – legal, accounting, audit) is decreased to at least €350.000 annually for the last three years prior to the submission of the application.

In case the Applicant is a shareholder or beneficial owner of a company (or companies) that is active in Cyprus, with their main office situated in Cyprus, and employs at least ten (10) Cypriot citizens, then the minimum amount that must have been paid for the above (direct income – corporate tax, V.A.T. or other rights and fees etc. and fees for purchase of business services – legal, accounting, audit) is decreased to at least €200.000 annually for the last three years prior to the submission of the application.

For each such company (or companies) the submission of applications for naturalisation is possible for two (2) shareholders maximum, which preferably hold the majority of the share capital. In situations where the Applicant has paid to the Cypriot economy direct income or fees (as described above) of a smaller value than the abovementioned amounts, then a combination may be made with Criteria 1 (Mixed Investments and Donations to State Funds) or 2 (Direct Investments) or 3 (Deposits in Banks). The sum of the payments to State Funds and the services fees of the last three years will be deducted from the required investment for fulfillment of criteria 1, 2 or 3.

6. Persons whose deposits in Bank of Cyprus or Laiki Bank have been reduced due to the enforcement of measures that have been applied on both Banks after the 15th of March 2013:

The Applicant has suffered a deposit reduction in one or both of the aforementioned Banks, totaling an amount of at least 3 million Euros.

In the case the applicant has suffered a reduction of deposits in one or both of the mentioned banks under the amount of 3 million Euros, he/she may apply after making additional Direct Investment (2), or Mixed Investments and Donation to State Fund (1) for the remaining required amount of the said criterion.

ADDITIONAL REQUIREMENTS TO THE ABOVE STATED FINANCIAL CRITERIA:

1. Age:

The Applicant must be 18 years of age and above.

2. Criminal Record:

The Applicant must have a clear criminal record of any convictions. Additionally, his/her name will not be included in the list of persons of which the commitment of property is ordered within the limits of the European Union.

3. Residence in Cyprus Republic:

The Applicant must own residential property in the Republic of Cyprus with a market value of at least 500,000 Euros, plus VAT.

12th August 2013

The content of this document is intended to provide a general guide to the subject-matter only, and does not constitute legal advice. Specialist professional advice should be sought in cases of specific enquiries.

Article by:

Christodoulos G Vassiliades & Co LLC

22556677

Nicosia

www.vasslaw.com

mariannap@vasslaw.net
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