The changes are aimed at attracting more investment into the country's budget. The government has expanded investor opportunities to make up for the loss of citizenship by an investment program cancelled in November 2020.
The full text of the updated rules for obtaining permanent residency by the investment of March 24, 2021 - on the website of the Ministry of Interior of Cyprus.
How much and what to invest in under the new rules
The old rules from 2016 provided for only one investment option - the purchase of residential property for an amount of €300,000 or more. Under the new rules, three more options are added to the purchase of housing: the purchase of commercial real estate, a contribution to a local business or an investment fund.
Buying a home - a house or apartment in Cyprus. To become a resident, an investor buys up to 2 residential properties. The total amount of the transaction - from € 300,000. Of these, the investor pays € 200,000 at once, regardless of whether the object is commissioned or under construction.
The rules allow the purchase of only new housing, that is, the investor must be the first owner of the purchased house or apartment. But the government will accept the application, if the transaction for the purchase of secondary housing concluded before May 7, 2013.
Buying primary housing must be directly from the developer. If an investor buys two properties, the developer companies can be different.
Buying commercial real estate: office, store, hotel. You can buy one or more objects for a total amount of € 300,000. Objects can be purchased on both the primary and secondary real estate market.
Purchase of shares in local companies. The minimum investment amount is also €300,000. But there are requirements for companies in which investors can invest money. It must be a business which:
- Is registered in Cyprus;
- Has a physical presence on the island, such as an office;
- Has employed at least 5 people.
Purchase of units in local investment funds in the amount of €300,000 and more. Units may only be purchased in collective investment funds:
- alternative investment funds with an unlimited number of persons (AIF);
- Alternative investment funds with a limited number of persons - up to 75 participants (AIFLNP);
- Registered Alternative Investment Funds (RAIF).
It is mandatory to have a residence address in Cyprus in order to get a permanent residence permit. If an investor buys commercial real estate, shares or units of investment funds, he must still have a home on the island - owned or leased. The application for a permanent residence permit is required to be accompanied by a document of confirmation, such as a contract of sale, lease agreement or document of transfer of ownership.
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Terms of participation of the investor's family
The new rules also determine the conditions under which the investor and his family members may apply for permanent residency. The conditions relate to the age of relatives, annual family income, employment opportunities for future residents and residence on the island.
To obtain a Permanent Residence Permit together with the investor can:
- spouse;
- children under 18 years;
- Adult children under 25 years of age, if they are unmarried, are students and financially dependent on the investor;
- The investor's parents and spouse.
If the investor wants to include an adult and financially independent child in the application, he adds another €300,000 to the minimum investment amount. Adult children separately confirm that they have sufficient income to live in Cyprus.
The investor is getting a Permanent Residence permit with two sons, 27 and 31 years old. Both sons are earning on their own. In this case, the minimum investment amount on the application would be €900,000: €300,000 for the investor + €300,000 for the first son + €300,000 for the second son.
The minimum annual income of the investor must be at least €30,000. The amount increases if several financially dependent family members receive a permanent residence permit.
The investor receives a permanent residence permit together with his wife, two minor children and his parents. His annual income must be €61,000: €30,000 + (€5,000 x 3) + (€8,000 x 2).
Annual Income of an Investor for a Permanent Residence in Cyprus
Employment of residents. The investor and his spouse are not allowed to work in Cyprus. Money for the investment must come from foreign sources. But applicants can run a Cypriot company, for example, in which they invest in order to obtain a permanent residence permit.
It is not necessary to reside permanently in Cyprus. But to maintain permanent residency status residents must not spend more than 2 years outside of the island.
Why do investors get permanent residence in Cyprus?
Residents of Cyprus have the right to live, do business and study in the country on the rights of local residents. Therefore, permanent residence by investment is suitable for those who would like to move to the European Union and live in a country with a warm climate and good environment.
The holder of the residence permit card can also apply for citizenship of Cyprus if he/she has lived in the country for 5 years. Cypriot passport gives freedom of movement in 173 countries of the world.
If an investor buys property in Cyprus, he has the right to rent it out after obtaining permanent residency. Profitability from the rental properties in Cyprus - from 2 to 6.5% per annum.
The cost of housing in Cyprus fell by 1.2% at the end of September 2020. At the same time the pace of construction held at pre-crisis levels. From January to November 2020, the Cyprus Department of Lands and Research issued only 3% fewer building permits than during the same period in 2019. We talked about this in the article "Real Estate in Cyprus Builds for Permanent Residency Recipients".
Cyprus plans to open the border to foreigners on April 1, 2021. When tourism resumes, the country's economy will begin to recover from the effects of the pandemic. Real estate prices will rise.
Immigrant Invest real estate experts recommend not putting off buying homes or commercial properties until the second half of 2021. Now investors have more properties available at an attractive price. And the permanent residence status will be a bonus to the purchase.
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Immigrant Invest helps you get permanent residency in Cyprus by investment. If you want to become a resident of the European Union state, seek advice from experts in investment programs.
