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11 June, 2020

Cyprus citizenship: the Cabinet approved the new rules of the programme, waiting for the decision of the Parliament

The Cabinet of Ministers of Cyprus has approved new rules for the Citizenship for Investment Programme - the Due Diligence procedure will take into account the provisions of anti-money laundering legislation. The changes will come into force after approval in the Parliament.

Cyprus citizenship: the Cabinet approved the new rules of the programme, waiting for the decision of the Parliament
Photo: Adobe Stock

The Cabinet of Ministers of Cyprus has developed and approved new rules for the citizenship programme for investment. The document was submitted to parliament for consideration. If it approves the new rules, they will come into force.

Strengthening Due Diligence

Under the new rules, the Government of Cyprus will audit applicants in accordance with the requirements of EU legislation on anti-money laundering. The new provisions will also facilitate the cancellation of citizenship of investors who violate the rules of the program. An example of such violation would be the provision of knowingly false information.

Changes to the Cyprus citizenship programme have been discussed earlier. The Special Committee on the Citizenship Programme made recommendations to the Government in this regard. The Cabinet has relied on them when drafting the new regulations.

Cypriot Interior Minister Nicos Nouris said the government is fulfilling its promise to strengthen Due Diligence within the framework of the citizenship for investment programme. Therefore, investors need to take the Due Diligence procedure seriously.

" Immigrant Invest " is a licensed agent for the Cyprus citizenship program. Our AML Compliance certified specialists conduct preliminary investor due diligence. This reduces the risk of rejection to 1%.

What will remain unchanged

The Cypriot government has already made changes to the citizenship programme for investment. Thus, in May 2019 the number of issued passports per year was limited to 700. Nikos Nouris said that the post-Pandemic period is not the best time to overestimate this quota.

The requirements for the amount of investment to participate in the program have not changed. A variety of investment options remains stable: applicants can buy real estate, start a business, buy shares of local companies.

The Cypriot government has also improved the administration of the programme. Previously, processing of applications was delayed, but now takes up to six months. The updated procedures have proved to be good, so everything will remain the same here.

Prerequisites for changes in the Cyprus citizenship programme

Citizenship and residence permit programmes for EU investments are closely monitored by the European Union. They are required to meet the highest possible safety standards in order to prevent economic crimes.

The Cyprus citizenship programme is no exception. Earlier it was criticized by the EU Government for the potential risk of issuing passports to unreliable investors. They could have used the program for money laundering.

According to Nikos Nouris, now such criticism is not justified. Cyprus thoroughly checks applicants and agents of the program. In addition, citizens-investors are checked every 10 years for compliance with the law.

Linking the programme to anti-money laundering legislation will make it even more secure.

Within the framework of the Cyprus Citizenship Programme about 4 thousand passports have been issued for investment since 2013. It has brought the country an income of €7 billion.

According to Transparency International, citizenship or residence permit programmes for investments have brought EU countries €25 billion over the past 10 years. At the same time, some countries lag behind Cyprus in terms of security standards and continue to be criticized by the EU government and international organizations Transparency International and Global Witness.

Increased protection against economic crimes is a general trend for EU countries. Earlier we said that a new unit was created in Europol to fight money laundering, corruption and fraud. Such crimes became more frequent against the background of the crisis due to the COVID-19 pandemic.

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Cyprus citizenship: the Cabinet approved the new rules of the programme, waiting for the decision of the Parliament