29.04.2023
The Government of Cyprus, in an attempt to attract foreign investment to the island and to help economic recovery and further economic growth, introduced Regulation 6(2) of the Aliens and Immigration Regulations, which gave non-EU citizens who invested in Cyprus the right to reside permanently on the island subject to certain criteria.
To address some shortcomings in the system, these criteria have been modified and will come into effect on May 2, 2023 in order to protect the integrity of the system, thereby ensuring their continuity and strengthening the reputation of the country.
A permanent residence permit is issued to applicants from non-EU countries, provided that they meet one of the investment criteria listed below:
The applicant must invest at least EUR 300,000 in one of the following categories:
- House / apartment. Purchase of a house/apartment for sale for the first time (not resale) for at least EUR 300,000 (plus VAT).
- Commercial real estate. Purchase of another form of real estate (excluding houses/apartments) such as offices, shops, hotels or similar properties, or a combination thereof, with a total value of EUR 300,000. These buildings may also be objects of resale.
- Share capital of a Cypriot company with activities and personnel in Cyprus . An investment of €300,000 in the share capital of a new company or an existing firm that is registered, based and operating in Cyprus with a proven physical presence and at least five (5) employees.
- Shares of the Cyprus Investment Organization for Collective Investments (such as AIF, AIFLNP, RAIF). An investment of €300,000 in the shares of a Cyprus Investment Organization for Collective Investment, whose investment is to be made in Cyprus.
In the event that the applicant ceases to own the investment without immediately replacing it with another of the same or greater value, which must meet the conditions set out in this procedure, then the permanent residence permit will be cancelled.
It is necessary to prove that the money to be used for the investment must have come from abroad from the personal bank account of the applicant or his spouse, and the value of the investment must be transferred to the bank account of the seller in Cyprus.
In addition, the applicant must prove that he has at his disposal a guaranteed annual income from abroad in the amount of at least 50,000 euros. Annual income is increased by €15,000 for a dependent spouse and by €10,000 for each dependent minor child.
In cases where the applicant invests in a house or apartment, this income may come from salaries, pensions, stock dividends, time deposits or rent from abroad. However, such income can only be substantiated by the applicant’s tax returns from the country in which the applicant is tax resident. The income of the applicant’s spouse may also be taken into account when calculating total income .
In cases where the applicant chooses to invest in real estate other than houses or apartments, the total or part of the income may also be derived from sources deriving from activities in the Republic, provided that they are taxed in the Republic.
Contents
Criteria for applying for permanent residence in Cyprus
- The applicant and his spouse d( a) must provide a certificate of no criminal record in their country of residence or in the Republic if they reside in Cyprus.
- They must confirm that they do not intend to work in the Republic, except for their actions as directors in the company in which they choose to invest under this scheme.
- If the investment does not concern the share capital of the company, they can be shareholders of companies registered in Cyprus and receive dividends. They may also serve as a director in such companies without remuneration.
- If applicants choose to invest in accordance with investment criteria B, C or D, they must provide information about their place of residence in the Republic.
- When investing in residential or other real estate, the application must contain proof that the contract of sale has been filed with the Land Registry and official receipts for payment of at least 300,000 euros (excluding VAT), regardless of the date of transfer of the property. Evidence must be provided that the invested funds came from abroad and are not the product of domestic loans. The total investment amount must be transferred to the seller’s account with a Cypriot financial institution.
- The applicant may purchase up to two (2) residential units (apartments or houses) provided that the total market value meets the above criteria. The specified purchase must be a first-time developer-sold home unless the home purchase was made by May 7, 2013.
- The property does not have to be purchased from the same company.
Provisions relating to dependents
An immigration permit is issued to the applicant and his dependents (spouse and minor children under 18).
Unmarried children between the ages of 18 and 25 who, on the date of application, are studying at higher education institutions abroad and are financially dependent on the applicant, may submit their own separate application for an immigration permit. In such a case, the father or mother and/or both parents together must prove that they have an additional annual income of EUR 10,000 for each such dependent child.
Such permission, once issued, will remain in effect even after they reach the age of 25, even if they marry and cease to be students and/or financially dependent on their parents.
Higher value investment for adult children
An immigration permit may also be granted to adult children of the applicant who are not financially dependent, provided that a larger investment is made.
The market value of the €300,000 investment must be multiplied by the number of adult children who will rely on the same investment in order to obtain an immigration permit.
Each adult child will have to prove that they have at their disposal a guaranteed annual income of at least €50,000, which will be increased by €15,000 for a dependent spouse and €10,000 for each dependent child.
Applicants can no longer include their parents or husband’s parents in their application.
Criteria Enforcement Mechanism
Applicants must prove annually that they continue to own the investment and that they continue to receive the required annual income for themselves and their dependents, and that they all continue to have valid health insurance unless they are no longer enrolled in the GHS National Health Scheme.
They are required to submit annually a certificate of no criminal record in their country of origin and residence. If the applicants fail to provide the above , the residence permit for them and their dependents will be cancelled.
The right of applicants and their adult dependent children to reside in Cyprus indefinitely. The residence permit issued to the minor children of the applicant terminates when they reach the age of 18. They may reapply if they meet the relevant criteria mentioned above.
The main purpose of these provisions is to maintain the integrity of the system, protect the process and eliminate discovered loopholes.
While the need for stricter controls can be understood and respected, the increase in the amount of annual income that is required will exclude many potential investors, especially those of retirement age who do not have such high annual incomes.
It is not yet clear how these changes will be perceived by potential investors.
