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Cyprus citizenship by investment: Changes in the CBI program

Kristina Kurkuliak
19 November 2018

The Council of Ministers of the Republic of Cyprus has made a decision to set a quota for the number of Cyprus citizenship by investment program participants. Now, the maximum annual number of candidates who can apply for the country’s citizenship corresponds to 700, with the term of a case consideration taking at least 6 months. The mentioned changes were approved on May 21, 2018. The modified program has now a different name, the Cyprus Investment Scheme.
The Mediterranean stronghold has been lately criticized over the system of economic citizenship issuance. In particular, in March 2018 the European Commission representatives announced the plan to investigate the issuance of Cyprus passports to millionaire investors. The initiative was reasoned by the fact of the program is hindering the anti-corruption war in the EU and increasing the risk of illegal transactions and money laundering.
In connection with this, Cypriot authorities decided to reconsider the program’s conditions. Numerous amendments were introduced in May. Responding to the criticism from the European side, the finance minister, Harris Georgiades, announced the changes and denied the rumours about corruption schemes involved in the program.
The minister noted: “We reject the idea that the passport of Cyprus is up for sale. We do not depend on this scheme, but it is a useful addition to the tools encouraging the economic growth of the country.”
The major change concerns the number of investors who can apply for citizenship.

Starting from 2018, the annual quota is 700 candidates, excluding their family members.

Other amendments include:

Note! Due diligence costs are to be covered by applicants. The minimum term of application processing will be increased from 3 to 6 months.

The conditions of the last point are quite controversial and need explanation from the government. Does the amendment concern only residential properties or commercial objects, too? Does the investment limitation extend to the contributions through special funds? How will this change work de facto in case one investor purchases several objects at the required price, but with only one of them previously used for obtaining economic citizenship? Will one have to pay the additional €1,000,000 or this amount will be proportionally reduced with respect to the price of this particular unit in the portfolio?

How many investors have already received Cyprus citizenship by investment?

According to the existing terms of the program launched in 2013, wealthy investors can receive Cyprus passport upon investing at least €2,000,000 in housing/real estate, government bonds and local companies.
In 2017, the citizenship of Cyprus was given to 1,013 people (503 to main investors and 510 to their family members). In 2016, the country accepted 904 new citizens (443 investors and 461 family members). In 2015, the government issued 679 passports (337 to investors and 342 to family members). In 2016, the authorities approved 214 applications, having issued the total of 400 passports.
At the beginning of 2018, 92 people have obtained the citizenship of Cyprus.

The number of luxury real estate (≥ €1,500,000) sales contracts submitted to the Department of Land and Surveys from 2010 to 2017

 

Popularity secret: Cyprus passport program (Cyprus Investment Scheme) advantages

Latest updates: other countries running Citizenship by Investment programs that have also changed the requirements for getting their passports in 2018

Caribbean countries

The prime minister of Saint Kitts and Nevis has recently announced changes to the economic citizenship program. The amendments concern investment in real estate option. Now two candidates can get citizenship by jointly investing at least $200,000 each in the same real estate object (the general requirement is to invest over $400,000 in real estate). However, in this case, the object retention period increases from 5 to 7 years.
A similar offer has been active since May 1, 2018, in Antigua and Barbuda. The difference here is that the investment retention term remains 5 years and the offer is valid until October 31, 2018.
Apart from making a change in the investment in real estate option, Antigua and Barbuda also canceled the repeated procedure of due diligence upon the passport renewal by economic citizens (every 5 years). Moreover, the age threshold for the investor’s parents has been reduced from 65 to 58.

Vanuatu, a small country in the Pacific

On April 27, 2018, James Harris, responsible for Vanuatu’s passport program, announced the reduction of prices in its CBI program as well noting that foreign investors could get the country’s citizenship in exchange for Bitcoin Cash. The official stated that national authority had established the mechanism of accepting cryptocurrency for participation in the program.

What to expect in the future?

The number of high-income people all over the world wishing to receive a second citizenship is growing steadily. 41% of high net worth individuals from Latin America, 39% from Middle East, 28% from Africa are considering to obtain a second passport. European programs keep attracting candidates with numerous benefits and the opportunity to immigrate to a highly developed country, while the Caribbean countries focus on the affordable prices.
The introduction of limitations in Cyprus only increases the value of its passport. Obtaining a second citizenship has become the necessity similar to purchasing a car. You can live without it, but your life is much more comfortable with it.

Interested in more detailed information about Cyprus citizenship by investment program? Contact us!

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