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21 August, 2020

Cyprus has published changes to the citizenship program

On August 18, 2020, the amendments to the citizenship by investment program have been published on the Cyprus government website. The main changes include an increase of the gratuitous contribution, new rules for the participation of family members, changes for politically exposed persons, and those who invest in the business. Also, the rules for revocation of citizenship are clarified. The amendments are valid from the date of publication.

Cyprus Published Amendments to Citizenship by Investment Program
Photo: Adobe Stock

The Cyprus Parliament ratified amendments to the citizenship program from July 31, 2020. They were published on August 18. There are changes in the conditions of participation of different categories of applicants, requirements for investments, and in the Due Diligence procedure.

Conditions of participation in the program

Some changes affect the participation in the Cyprus citizenship program of investor's family members and politically exposed persons.

Changes to Applicant Terms

The investor, his spouse, and minor children applied for the program together. Adult family members have been added after the approval of the main applicant.Children at the age of 18 to 28 years old and parents of the investor can apply to the program altogether with the investor and its spouse.
The program was not eligible for politically exposed persons who held public service 5 years before the application.The program is open to politically exposed persons who have not held public service during the past 12 months.
The parents of the investor were allowed to participate in the program if they own real estate property for € 500,000 or more.Now parents of the investor and its spouse can participate in the program. They need to purchase real estate of € 500 000 for each family. The total cost should be € 1 million and may include 1 or 2 objects.
Financially dependent and married children at the age of 18 to 28 years old could apply for participation in the program based on the investor's application.СMarried children of the investor at the age of 18 to 28 years old can not participate in the program with the investor.

Contributions and investments

The amendments also affected investment requirements. The gratuitous contribution has grown, and the rules for investing in business have changed.

Changes in investment requirements

The amount of non-refundable contributions — 150 000 €.The amount of non-refundable contributions — 200 000 €.
The applicant had had to create 5 job positions for Cypriots and EU citizens if investing in a business.The applicant had had to create 5 job positions for Cypriots and EU citizens if investing in a business.
The applicant had an option to buy land and invest in a development company.It is prohibited to create a development company and invest in its own development projects.
If the participant chooses to invest in residential real estate, the total expenses for buying such property must be 2 million euros. When purchasing any secondary residential property, investments ranged from 2.5 million euros.The cost of secondary residential real estate as an investment option for obtaining second citizenship has dropped to 2 million euros. But only in case if such real estate was not previously registered in the citizenship by investment program.

Due Diligence

Some amendments aim to strengthen Due Diligence. The law made impossible participation in the program those who have a criminal record or open investigation.

Changes to Due Diligence and Related Terms

The certificate of non-criminal record should not have been issued earlier than 3 months before the submission of documents.The certificate of non-criminal record should not be issued earlier than 6 months before the submission of documents.
Capital for the purchase of assets could be transferred from a personal overseas account or an account in Cyprus. The investor must open a bank account in Cyprus.Capital for the purchase of assets can also be transferred from an account of a foreign company.
The law did not specify whether participants may apply for citizenship if they are investigated. As far as we know, citizenship was not granted in such a situation.The law specifies that participants can't apply for citizenship if they are investigated in a criminal case with a possible sentence to imprisonment of 5 years.

Cancellation of citizenship

One more reason for the deprivation of a passport was added to the program. This change simplifies the cancellation of citizenship.

According to the program rules, investors keep all investments for the first 5 years from the date of obtaining citizenship. Each year within 5 years, investors must submit documents to the Ministry of the Interior and the Ministry of Finance of Cyprus. This action confirms the preservation of investment and permanent residence in the country.

If the audit finds out that the investor has not held the investment and no longer meets the program's financial criteria, his citizenship might be canceled.

What will change the amendments to the program

In general, the amendments speed up the process of obtaining citizenship for family members of the investor. They can now apply for the program at the same time as the main applicant.

Opportunities for investors and their families have been broadened in terms of participation in the program. Politically exposed persons no longer have to wait 5 years from the resignation from government posts. The period was shortened to 12 months. Also, the parents of the investor's spouse can participate in the program.

We believe that the increase in donations will not affect the popularity of the Cyprus citizenship program. Our experience shows that real estate investment options are the most popular.

The cost of properties in Cyprus has decreased amid the crisis due to the pandemic. This change will allow you to buy the best property for the same money. Real estate will provide return and capital gain and will continue to grow in value.

Not only Cyprus changes the conditions of the citizenship program. Malta will also update the requirements for issuing passports to investors by September 2020. It is assumed that citizenship can be obtained in 1-3 years after receiving a residence permit.

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Cyprus has published changes to the citizenship program