Cyprus Offers Better Fast-Track Citizenship

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Cyprus Offers Better Fast-Track Citizenship

The sunny climes and speedy administration of Cyprus have long made it a favourite port of call for investors and businesses looking to expand into Europe. With one of the lowest rates of corporation tax in Europe at 12.5%, equal treatment for offshore companies, its low capital requirement for starting a business and a strong banking system, Cyprus has long stood out as a particularly appealing destination for company formation (albeit one best navigated with professional advice).

Yet the emergency sequestering of investment money in 2013 to avoid bankruptcy hit a number of mostly Russian investors hard, and threw its nascent Citizenship by Investment (CBI) programme into doubt. Now that the financial crisis is almost out of sight, a new revision is set to consolidate Cyprus’s position by offering several generous concessions, including a major reduction to the amount of investment needed to qualify.

The last change in the law was in 2013, when the necessary amount of capital was lowered from up to €10m to €5m in individual investment, or €2.5m as part of a group application. But with some lingering uncertainty over the security of investments and competing schemes in Latvia, Malta, Portugal, Greece and Spain, further reductions aim to enhance Cyprus’ reputation and re-establish it as the best EU country for external investment.

The new programme merges the two methods into a flat €2m of individual investment, while also broadening the potential investment opportunities. While most people opting for the CBI scheme previously invested in Cypriot government bonds, these have now been capped at €500k of the total amount of investment, while putting money into fixed bank deposits has been abolished. Investments can now also be placed in real estate, provided there is a legitimate development plan in place beforehand.

The path to citizenship for the parents of an applicant has also been simplified. Where this once required an entirely separate application, they can now be included in the investor’s application, provided that they acquire a residence in Cyprus with a minimum acquisition cost of €500k. Investors must now obtain a Cyprus residence permit along with their CBI application, and at present, must also have their own private residence in the country with a minimum value of €500k. This requirement is expected to be abolished in the near future however, and the applicant is not required to reside in the country at any point in the application process.

One of the key draws for potential investors has always been the turnaround time on applications, and this will persist at a mere three months processing time on average. This beats the next best country, Malta, by a whole nine months, and could be the ideal safeguard for British citizens and business owners currently fretting about their impending withdrawal from the European Union. For everyone else, the changes due on 1 November 2016 make the Mediterranean island an enormously enticing prospect.

This post was written by Heather Landau, managing director of Immigration Into Europe. We offer our clients a set of immigration services including company formation, bookkeeping, virtual offices and introductions to investment programmes that will support all your immigration requirements.

Moving Abroad Checklist

Initial Considerations

Will your partner be travelling with you?

If so, what will they be giving up in your present home and will they be able to continue with their career in your new home? You will need to check whether a separate visa is required for your partner to work or if your visa gives that right. If they are unable to work you will need to decide on the effect on your finances and what alternatives are available to give a fulfilling life (home business, training, voluntary work).

Are you taking family with you?

Moving with family raises many exciting opportunities, but also can create challenges. The HSBC Expat Explorer survey indicates that expat kids can take six months to settle in to their new country (see article). Getting young or even older children to prepare to move and leave their friends and family behind can be a challenge and should be thought through.

The options for education is another area that needs to be thought through.

Moving your child to a new country with a different education system can be a great opportunity to broaden their experience, but if they are close to key exams the timing can make this inadvisable. If you do take your family with you, it is important to decide between joining the local school system or choosing an international school.

Where will you be living?

Whether you will be living in a house or apartment, furnished or unfurnished, these decisions will affect what you need to take with you. The time you are planning to live overseas will also affect whether you should leave your property at home empty, rent it out or sell it. See the article Sell, Store or Ship.