New Criteria for a Cypriot Citizenship

Cyprus/April 2014

Scheme for naturalization of investors in Cyprus by exception on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002-2013

The Council of Ministers have decided on 19 March 2014 to revise its previous decision dated 24th May 2013 concerning the criteria and conditions for the naturalization by exception of non-Cypriot entrepreneurs investing in Cyprus.

According to the revision, a foreign investor is eligible for naturalization by exception if they meet at least one of the following criteria in terms of investments:

(a) Investment in government bonds: The applicant must have purchased state bonds of the Republic of Cyprus of at least €5m.

(b) Investment in financial assets of Cypriot companies or Cypriot organizations: The applicant must have purchased financial assets of Cypriot companies or Cypriot organizations (bonds/ securities/ debentures registered and issued in the Republic of Cyprus) of at least €5m.

(c) Investment in real estate, land development and infrastructure projects: The applicant must have made an investment of at least €5m 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).

(d) Purchase or creation or participation in Cypriot businesses or companies: The applicant must have made an investment of at least €5m in the purchase, creation or participation in businesses or companies, that are based and operating in the Republic. These businesses or companies should evidently have a tangible presence in Cyprus and employ at least five (5) Cypriot citizens.

With regard to conditions (a) to (d), the applicant shall retain the said assets in their possession for a period of at least 3 years. In the case of a share or bond portfolio, it is to be ensured that the amount of the value of the portfolio for the said period will not fall below the amount specified.

(e) Deposits in Cypriot banks: The applicant must have personal fixed term deposits for 3 years in Cypriot banks or deposits of privately owned companies or trusts (in which he/she is the beneficiary owner) in the Republic of Cyprus of at least €5m.

The applicant is also eligible if he/she satisfies a combination of the abovementioned criteria in (a), (b), (c), (d) and (e) amounting to at least €5m.

(f) Persons whose deposits with the Popular Bank Public Company Ltd have been impaired due to the measures implemented after the 15th March 2013: The applicant has incurred impairment in deposits amounting to a total of at least €3m.

In the case where the applicant has incurred an impairment in their deposits under €3m they may apply, having made an additional investment through the criteria in (a), (b), (c), (d) and (e) for the balance of the required amount.

(g) Major Collective Investments: The Council of Ministers shall have the right on special occasions, to reduce the above criteria in (a), (b), (c) and (d):

I. To €2,5m for investors, who demonstrably participate in a special collective investment scheme, provided that the total value of the investment is at least €12,5m.

II. To €2m for investors who demonstrably participate in a special collective investment scheme, provided that the total value of the investment is more than €12.5m. It is noted that this present provision (I), will be in force until the 1st of June 2014.

In addition, it is noted that for the abovementioned provisions (Ι) and (ΙΙ), the investment for the Criteria (a) to (d) may be realized through a different salesman/ provider (physical or legal entity).

The Decision of the Council of Ministers provides for the grant of the Cypriot citizenship to the spouse as well as the financially dependent adult children (eighteen years old or above) of the investor. Neither the spouse nor the children are obliged to meet any financial criteria.

Lastly, there are certain terms and conditions that must also be satisfied in order for the applicant to be able to proceed with their application:

1. Clean Criminal Record: the applicant must have a clean criminal record and their name must not be included on the list of persons whose property is ordered to be frozen within the boundaries of the European Union.

2. Residence in the Republic of Cyprus: In all cases listed with regards to the criteria (a) to (g), the applicant must 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.

It is noted that members of the same family, which 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.

Zoe Kokoni
Tel : +357 22 699 222