Cyprus has tightened its citizenship – by – investment scheme procedures for applicants in a bid to make it more reliable after being criticized by the EU for lack of transparency. A Cyprus passport will now be granted under the new golden visa rules in exchange for an investment of € 2.5 million, up from € 2 million, including the purchase of a residency. According to the new changes, R&D will be allocated an amount of € 75,000 from the scheme. In order to fund affordable housing schemes, an equal amount will go to the land development organization. Following a recent Council of Ministers meeting in the Republic of Cyprus on 13 February 2019, significant changes to the Cyprus Investment Program will come into effect from 15 May 2019 onwards, thus changing the status quo of the CIP permanently.
The cabinet also approved more stringent criteria for applicants who will be subject to background checks by a foreign specialized firm that has not yet been hired. Applicants will also be required to already have a Schengen visa — a short – stay visa that allows a person to travel to any Schengen Area member for tourism or business purposes for up to 90 days. In addition to due diligence, all applicants will need a Schengen visa, but will not be eligible if another EU country has rejected a citizenship application.
The main changes voted by the Council of Ministers of Cyprus and coming into force on May 15, 2019 are as follows:
• A limit of 700 Applications per year in the Republic of Cyprus under the CIP ;
• A donation of € 75,000 for R&D (in addition to the existing CIP criteria) is mandatory ;
• A donation of € 75,000 to the land development organization is mandatory for financing affordable housing schemes (in addition to the existing CIP criteria) ;
• Applicants must now have a Schengen visa when submitting a request ;
• Applicants who have been rejected for citizenship by any other EU country may not pursue Cypriot Citizenship under the CIP (this has immediate effect) ;
• The investment will have to remain in place of 3 years for 5 years after the date of naturalization;
• The investor will be entitled to change his investment into other forms of permitted investment during this 5-year period, provided that he / she obtains the consent of the Ministry of Finance before making any changes ;
• Shipping will be included in the investment sectors, while investment in government bonds for CIP purposes will no longer be available ;
• If the investment is in real estate, to qualify for such investment, a planning permit must be in place ;
A report on investor citizenship and residence schemes operated by a number of EU countries was presented by the European Commission in January this year. The report identified the risks associated with schemes such as money laundering, tax evasion, and corruption. It also outlined the steps needed to address these concerns. The reports pointed out that in the EU, Bulgaria, Cyprus and Malta are the only countries that grant citizenship to investors without a physical residence obligation.