The most popular investment option last year was the real estate contribution. Investors spent EUR 1.2 billion on residential real estate and infrastructure development projects on the island.
Foreign investors have invested EUR 76.4 million in Cypriot business and local shares. Other investment options, such as contributions to investment funds, accounted for EUR 58.5 million.
Statistics of the Citizenship Programme for 2013-2019
According to the results of the audit, between June 2013 and December 2019, 2855 investors received Cyprus passports for investments. Russians were in first place by the number of passports received for investment. This is followed by citizens of China, Ukraine, Lebanon and Saudi Arabia.
In 7 years, the programme has brought the country €9.7 billion. The programme contributed 1.7% to the country’s GDP growth in 2016-2019. However, the assessment does not take into account the indirect impact of the programme on the economy: sometimes investors invest in local businesses after obtaining passports.
Investments in real estate accounted for 60% of all investments under the programme. The amount of transactions over the past years was €6.4 billion. Investors have invested 39%, or €2.5 billion, in the purchase of property on the island.
Other areas of the Cypriot economy have received €3.3 billion in investments. For example, investments in local companies totalled EUR 1.2 billion. In third place were deposits in Cypriot banks, to which investors transferred 713.3 million euros. The programme allowed investments to be placed in deposits in 2013-2017.
In 2020, the Cyprus economy was affected by closed borders and the financial crisis. The government is therefore developing new conditions and proposals that will help attract foreign investors to the country.
What measures are being considered by the Government of Cyprus to attract investors?
- Exempt real estate from capital gains tax.
- To reconsider the definition of “old real estate” – to consider objects as such already in 3 years of operation, instead of 10 years as it is now.
- Increase the discount on bank transfer fees to 70%. Now the discount is 50%.
We believe that tax incentives may be of interest to entrepreneurs who plan to participate in the Cyprus Citizenship Programme for their investments. This is particularly important against the background of the changes in the programme that the Government adopted in August 2020.
