Cyprus Offshore Companies formation

Obtain an EU passport in Cyprus

Executive Summary:

On 13th of September, the Cyprus Council of Ministers announced the revised, more favourable and attractive scheme for obtaining the Cyprus citizenship by investor under the scheme of naturalization, reducing the investment that should be made from €2,5 million to €2 million.

The main benefits of the scheme are as follows:

Kyriakides, Savvides & Associates Limited offers you the ability to obtain on EU passport with quick and simple procedures.

The Cyprus (EU Member State) passport has the following benefits:

  • Unrestricted right to live and work in the EU
  • The Citizenship is granted to the applicant, the spouse and of financially dependent children up to the age of 28
  • The passport is given in 6 months (much lower time than any other country)
  • No need to be physically resident in Cyprus
  • The investor can also obtain the Non Domiciled resident Status provided he states in Cyprus for more than 183 days per year. The requirement is expected to be decreased between 60 to 90 days in the near future.
  • A Non Domiciled resident in Cyprus will have no dividend or interest tax in Cyprus on his/her worldwide income.
  • Cyprus has one of the lowest rates of corporate tax (12,5%) in the EU.
  • The amount of the investment required is €2.000,000 in flexible investment options (Bonds, securities, Real Estate business) plus €500.000 in residential accommodation.
  • If the investment is only in residential accommodation the total investment is reduced to €2.000,000 instead of €2.500,000.
  • You need to keep the investment only for 3 years

The investor could perform the following investments:

  • Investment in real estate, land development and infrastructure projects
  • Investment in financial assets of Cypriot companies or Cypriot organizations
  • Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by CySec
  • Combination of the aforementioned investments

Family members
The investor’s family members can also apply for the citizenship, either simultaneously or after the acquisition of the citizenship by the investor, depending on each family member.

Terms and Conditions:

  • Clean criminal records
  • Privately owned residential property in Cyprus with minimum value of €500,000 plus VAT
  • Residence in Cyprus

Detailed Analysis of the scheme:
On 13th of September 2016, the revised Scheme for the Naturalisation of Investors in Cyprus has been approved by the Cyprus Council of Ministers. The Scheme for Naturalisation of Investors in Cyprus by Exception is based on subsection (2) in section 111A of the Civil Registry Laws of 2002-2015.

Cyprus is an attractive business center, offering opportunities for investment across a wide range of sectors. The strategic location, the good infrastructure, the Economic Prospects & Opportunities, the High Quality of Life, the Human Talent & Quality of Professional Services, the Legal and Regulatory Framework, the EU & Eurozone Member State and the Tax System give strong incentives for the investment.

Aim:
The main aim of the improved Scheme for the Naturalisation of Investors in Cyprus is to attract Foreign Direct Investment and encourage the use of Cyprus as an investment center by high net worth individuals, investors and entrepreneurs.

Who is qualified to apply and how:
A non-Cypriot citizen could apply for the acquisition of the Cypriot citizenship through naturalization by exception and enjoy all the benefits of a Cypriot National & EU National, if one of the following economic criteria are met as described in PART A, either personally or through company/companies in which he/she participates as shareholder – in proportion to his/her holding percentage, or through investment done by his/her spouse or jointly with spouse or as a high ranking senior manager of company/companies that meets one of the economic criteria as described in PART A.

A high-ranking senior manager may apply provided that:
A high-ranking senior manager is eligible to apply for the citizenship, provided that he or she receives such a remuneration that generates for the Republic of Cyprus tax revenues of at least €100,000 for a three-year period and provided that this tax has already been paid or prepaid and he or she has acquired a permanent residence of purchase price at least €500.000 (plus VAT).

In addition, the company that employs the high-ranking senior manager should meet one of the economic criteria as described in PART A.

General
The applicant for the Cypriot citizenship under the naturalization scheme should had perform the investment as described in PART A, three years preceding the application date, and must hold the investment(s) for at least three year as from the naturalization date.

The applicant must fulfil the Economic criteria as described in PART A and the Terms and Conditions as described in PART B.

The applicants that had acquired the Cypriot citizenship under the scheme of naturalization will be subject to periodic inspection. In case where there is a breached of a criterion, term or condition of the Scheme the granted naturalization may be revoked.

When the investor’s application for obtaining the Cypriot citizenship under the naturalization scheme is rejected, then, the immigration permit as obtained in accordance with that decision, w ill be immediately cancelled.

PART A
Economic Criteria

Α.1 Investment in real estate, land development and infrastructure projects:
The investor could perform an investment of at least €2 million in real estate, land development and infrastructure projects.

The investment could be for the purchase or construction of building(s) or for the construction of other land development projects used for residential or commercial developments, or developments in the tourism sector, or other infrastructure projects.

In case of investment in land under development, an investment plan for the development of the purchased land must be included in the application.
The investment in land located in a building zone of zero development, is not considered as investment under the scheme.

Α.2 Investment in financial assets of Cypriot companies or Cypriot organizations:
The investor should have made an acquisition or should have participated in companies or organizations established and operating in the Republic of Cyprus with investment costs of at least €2 million. The invested funds will be channeled for the financing of the investment objectives of these companies exclusively in Cyprus, as per a specific investment plan.

The application will be reviewed to the physical presence of the companies or organizations in Cyprus and that they have significant activity and turnover. The company or organization must employee at least five employees, Cypriot or citizens of European Union member-states. In case where more than one applicant invest simultaneously or almost simultaneously in the same company or organization, the number of employees will increase in proportion to the investors. Also, the employees must have legally and continuously resided in Cyprus during the five years preceding the application submission date.

Α.3 Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by CySec:
The applicant has the option to invest at least €2 million units in alternative investment funds (AIF) established in the Republic of Cyprus, licensed and supervised by the CySec. Those funds must invest exclusively in the Republic of Cyprus, in investments that meet the criteria of this Scheme or in areas approved by the Minister of Finance.

The investment must be kept for at least three years, so, the manager of the auditor of the fund is obliged to notify in writing the Ministries of Finance and Interior with reference to the value of the initial investment, on an annual basis.

The applicant can also proceed with the purchase of financial assets of Cypriot companies or organizations of at least €2 million, such as bonds, bills and securities, issued with the approval of the CySec, provided that the companies or organizations have proven physical presence and substantial economic activity in the Republic of Cyprus. The purpose of those companies or organizations should be the financing of the investment plans of these companies or organizations exclusively in Cyprus, based on an investment plan.

The purchase by an AIF of units of other AIFs is not eligible.

Α.4 Combination of the aforementioned investments:
A combination of the above investments can be made, provided that the value of the investment(s) will be at least €2 million.

Under the criterion of the combination of the aforementioned investments, the investor Within may purchase special government bonds of the Republic of Cyprus, up to €500.000, which will be issued by the Public Debt Management Office of the Ministry of Finance.

The characteristics and the terms of these special bonds will be determined by the General and Special Issue Terms of the Government Bonds of the Republic of Cyprus.

The investments in government bonds through the secondary market are not eligible.

PART B
Terms & Conditions

  1. Clean Criminal Record:
    Is essential for the applicant to have a clean criminal record. Also, the applicant must not have been included in the list of persons whose assets, within the borders of the European Union, have been frozen as the result of sanctions.
  2. Residence in the Republic of Cyprus:
    The applicant must have a permanent privately-owned residence in the Republic of Cyprus, for which the purchase price must be at least €500.000, plus VAT.
    Member of the same family that apply separately for naturalization, can jointly purchase a residence, given that the permanent residence property has value that covers that amount of €500,000 per applicant.
    When the value of the acquired permanent residence property exceeds the value of €500,000 plus VAT, the excess amount could be used for supplementing the amount of the total investment that should be made as per the economic criteria mentioned in PART A.
    In case where the applicant invested in housing unit(s) as per the economic criteria A1, the acquisition of another permanent residence in Cyprus will not be required, if at least one of those housing units worth at least €500,000 plus VAT, given that the applicant retains the possession of the residence for life.
  3. Residence Permit in Cyprus:
    The applicant must hold a residence permit in Cyprus before his/her naturalization as a Cypriot citizen.
    In case where the applicant does not hold a residence permit, he/she could apply for an immigration permit on the basis of Regulation 6 (2) of the Aliens and Immigration Law, simultaneously with the application for naturalization.
  4. Government Bonds
    The investment in government bonds is restricted to €500,000 and the investor should retain these bonds for a three-year period.
  5. Residence in Cyprus
    Further to the acquisition of the Cyprus citizenship, the investor is not obliged to be Cyprus resident.

The above-mentioned terms and conditions apply for all adult members of the family of the investor, who will apply for naturalization.

Family members:

  1. Spouse/Partner:
    The investor’s spouse/partner can acquire the Cypriot Citizenship by simultaneously filling their application.
  2. Minor children
    Further to the investor’s acquisition of Cypriot Citizenship, the minor member of the family can apply for the Cypriot citizenship, given that the other parent gives his/her consent.
  3. Adult financially dependent children
    Financially dependent children have the right to apply for the Cypriot citizenship provided that he/she belongs to one of the following categories:
  • Children with severe physical or mental disability that disallow employment
  • Student up to age 28
    The application for the citizenship should be filed further to the investor’s acquisition of Cypriot Citizenship.

4. Parents

Further to the investor’s acquisition of Cypriot Citizenship, his/her parent can apply for the Cypriot citizenship provided that they are owners of            a permanent residence value at least €500,000 plus VAT or collectively own one permanent residence worth at least €1 million plus VAT.

PART C
Submission of documents
The following documents must be submitted together with the application form (M127).

  1. Clean Criminal Record:
    Certificate of Clean Criminal Record from the country of origin and the country of residence in case where they are different.
  2. Residence in the Republic of Cyprus:
    (a) Contract of Sale.
    (b) Title Deeds or evidence of Registration of the contract with the Lands and Surveys Department.
    (c) Evidence for the payment of the agreed purchase price for the permanent residence.
    (d) Copy of the wire transfer to a Cypriot commercial banking institution in the name of the seller or the seller’s company.
    (e) An evaluation certificate from an independent registered land surveyor, if required by the Ministry of Interior or the Ministry of Finance.
  3. Criteria regarding the investment (when applicable):
    (a) Certificate of Registration of the company/ companies by the Registrar of Companies.
    (b) Certificate of shareholders by the Registrar of Companies or certificates showing that the applicant is the beneficiary owner of the company/ companies.
    (c) Audited accounts of the company (or companies) for the last three years preceding the year of the application.
    (d) If the applicant is a high-ranking senior manager, the submission of the employment contract and the receipt from the Department of Inland Revenue are additionally required.
    (e) If the investment is made by the spouse of the applicant or jointly, a marriage certificate is required.

The following documents are required depending on the type of the investment that the investor proceeded with:

  1. Investment in real estate, land development and infrastructure projects
    – Contract of sale.
    – Title Deeds or evidence of Registration of the contract with the Lands and Surveys Department.
    – Evidence for the payment of the agreed purchase price for the investment.
    – Copy of the wire transfer to a Cypriot commercial banking institution in the name of the seller or the seller’s company.
    – An evaluation certificate from an independent registered land surveyor, if required by the Ministry of Interior or the Ministry of Finance.
    – Investment Plan for the development of the purchased land, in case where the investment includes the purchase of land under development
  2. Purchase or Establishment or Participation in Cypriot Companies or Businesses
    – Contract of sale.
    – Evidence for the payment of the agreed purchase price for the investment.
    – Certificate of shareholders by the Registrar of Companies.
    – Copy of the wire transfer to a Cypriot commercial banking institution in the name of the company or the organization.
    – Specific investment plan.
    – Copies of the employment agreements for all the employees, Cypriot or European Union citizens, employed by the company in which the applicant has invested.
    – Confirmation from the Social Insurance Department as to the insurable income of the Cypriot or European Union citizens employed in the company.
    – Copy of the Social Insurance Contributions for every Cypriot or European Union citizen employee.
    – Registration Certificate (MEU1) or Permanent Registration Certificate of Union Citizen (MEU3) for employees that are European Union citizens.
  3. Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations that are licensed by CySec:
    – Title/Titles and other relevant documents of the financial assets / units purchased.
    – Copy of the wire transfer to a Cypriot commercial banking institution in the name of the company or the organization.
    – Specific investment plan.
    – Confirmation by the CySec.
  4. Investment in government bonds:
    – Proof from the Public Debt Management Office for the purchase of special government bonds.
    – Copy of the wire transfer into a bank account of the Treasury of the Republic of Cyprus.

Additional document may be requested either by the Ministry of Interior or by the Ministry of Finance during the review of the application.

None of the above affects the absolute discretion of the Cabinet of Ministers on taking a decision.

For more information please contact us.

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Phone: +357 25343477 http://www.ksapre.com/