The Council of Ministers updated the conditions for naturalisation of investors in Cyprus by exception, on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002-2013. According to the verdict laid out on May 24, 2013, a non-Cypriot citizen may apply for the attainment of Cypriot citizenship, if he or she has made mixed investments and a donation to a state fund, has direct investments in the Republic, maintains deposits in banks, has business activities in the country or suffered an impairment of deposits due to the resolution measures implemented.
Applicants interested in attaining Cypriot citizenship are required to complete the M127 form and submit certain documentation. In all cases, investors need to submit the contract of sale and a confirmation of settlement of their residence. Following documentation is also required, depending on the case.
Mixed investments and a donation to a state fund
In order to be able to apply for citizenship, a non-Cypriot investor must dedicate an amount of at least €2 million for the acquisition of shares and/or bonds of the state’s investment company under formation, provided that he deposits such amount with the Treasury of Cyprus until the shares and bonds of the said company are issued. Additionally, the applicant must make a donation of at least €0.5 million to the country’s Research and Technology Fund.
- Receipts from the Treasury of Cyprus for the acquisition of shares and/or bonds from the state’s investment company under formation.
- Receipts for the investor’s donation to the Research and Technology Fund.
The eligible applicant must have direct investments in the Republic worth at least €5 million. Direct investments also involve the purchase of:
- Real estate, including residential, commercial, office space and accommodation developments or projects of similar nature.
- Companies or businesses that maintain establishments and are operative in the Republic.
Companies registered in Cyprus.
- Assets of financial nature, such as securities, bonds and debentures authorised and issued in Cyprus, including those to be issued by the Solidarity Fund on the grounds of the Establishment of a National Solidarity Fund Law of 2013.
- Participation of an investor in a company or consortium of companies commissioned to conduct a public project.
With regard to the purchase of real estate, companies or businesses and assets of financial nature, investors shall maintain such assets in their possession for three years at least. As far as a bond or share portfolio is concerned, it is to be safeguarded that the value of the investment portfolio for the three years period will not drop below the amount stipulated.
The Minister of Interior has the authority to decrease the amount required for direct investment to €2 million for the period ending on June 30, 2014. This will be applied to non-Cypriot citizens who evidently participate in a certain collective real estate programme, which will encompass the acquisition of real estate in the country managed by the State, of a total value of no less than €10 billion.
1. Purchase of real estate:
- Contract of Sale
- Title deeds
- Confirmation for submitting the contract to the Lands and Surveys Department
- Receipts for paying the arranged price
1. Purchase of a company or business:
- Contract of Sale
- Receipts for paying the arranged purchase price
- Confirmation from the Registrar of Companies with regard to the shareholders.
1. Purchase of shares:
- Shares certificates
1. Purchase of assets of financial nature:
- Titles and other relevant documentation
Deposits in Cypriot Banks
The eligible investor must maintain private fixed term deposits for a three-year period in banking institutions of the Republic or deposits of privately owned companies in which he is the beneficiary owner or trusts in which he is the ultimate beneficiary of €5 million at the very least.
- Confirmation of banking institutions with regard to the fixed terms deposits for three years of the investor or companies in which he is the beneficiary owner or of the trust in which he is the ultimate beneficiary.
- As to the deposits of companies, the certificate of registration of the company by the Registrar of Companies and any other relevant documentation need to be submitted.
Combination of the Above
An individual is eligible for the acquisition of Cypriot citizenship, if he has a combination of the above, such as mixed investments and a donation to a state fund, direct investments and deposits in Cypriot banks, totaling at least €5 million.
The required documentation in this case, involves the submission of the necessary documents applied to each condition.
The investor must be a beneficiary owner or shareholder of a company which is managed in the country and that over the last three years, before the submission of the application, has paid to state funds (V.A.T., corporate tax, direct revenue, other fees and charges) and for the acquisition of business services (accounting, auditing, legal) a total of €500.000 per year as a minimum.
Alternately, in the event that the investor is a beneficiary owner or shareholder of a company which is operative in the Republic, has founded its headquarters in the country and employs at the very least five Cypriot citizens, then the minimum amount that has to be paid for state funds and remuneration for business services is reduced to at least €350.000 for the last three years prior to submitting the application.
In the event that the investor is a beneficiary owner or shareholder of a company which is operative in the Republic, has founded its headquarters in the country and employs at the very least ten Cypriot citizens, then the minimum amount that has to be paid for state funds and remuneration for business services is reduced to at least €200.000 for the last three years prior to submitting the application.
For these companies, applications for acquisition of Cypriot citizenship may be filed by only two shareholders, who ideally obtain the majority of the share capital.
In the event that a foreign investor has paid to the government direct revenue or fees less than the aforementioned amounts, a combination may be made with conditions applied for mixed investments and donation to state funds or direct investments or deposits in Cypriot banks. The total of payments to state funds and remuneration for services in the last three years shall be subtracted from the requisite investment to meet conditions for mixed investments and donation to state funds, direct investments or deposits in Cypriot banks.
- Certificate of registration of the company by the Registrar of Companies.
- Certificate of shareholders by the Registrar of Companies or certificates providing evidence that the applicant is the beneficiary owner of the company.
- Confirmation with regard to the amounts paid as to the remuneration for business services. The confirmation has to be issued by the service providers.
- Audited accounts of the company for the last three years prior to the year of application.
- Confirmation from the Social Insurance Department as to the insurable income of the employees in the company of the investor.
Investors with impaired deposits after bank resolution
Individuals whose deposits with Laiki and Bank of Cyprus have been impaired due to the restructuring measures implemented after March 15, 2013 are able to apply for naturalisation. In order to be eligible, the amount of their deposit impairment should be no less than €3 million. In the event that an investor had suffered impairment in one or both of the banks below €3 million, he may still apply, provided that he has made an additional direct investment or mixed investments or a donation to a state fund amounting to the balance required of the said condition.
- Confirmation with regard to the extent and date of the impairment of deposits.
- When it comes to deposits in companies in which the investor is the beneficiary owner, the certificate of registration of the company by the Registrar of Companies and any other relevant evidence need to be submitted.
Terms and Conditions
Investors who satisfy the criteria for applying for naturalisation must have a clean criminal record. Moreover, their names must not be incorporated in the list of individuals whose assets are ordered to be frozen within the borders of the European Union. Additionally, applicants must hold a permanent privately-owned dwelling in the country, the market value of which must worth a minimum of €500.000 plus V.A.T.
The aforementioned conditions do not affect the absolute discretion of the Council of Ministers in affording a decision. In case that after an assessment, it has been revealed that a condition has been circumvented, the authorisation of Cypriot citizenship may be annulled.
Apply for the acquisition of Cypriot citizenship
Contact Michael Chambers & Co and learn everything you need to know with regard to the new scheme for naturalisation of investors in the Republic of Cyprus. Our Corporate and Commercial Law team can inform you whether you are an eligible applicant and undertake the completion of your application form in a timely and effective manner.