Cyprus Citizenship by Investment program Amendments reduce minimum investment and introduce residence requirement Cyprus Citizenship by Investment program - September/2016 amendments reduce minimum investment and introduce residence requirement By Mr. Michail Kamperis, Ierotheou, Kamperis & Co. LLC The Cyprus Citizenship by Investment program was amended on 13 September 2016, pursuant to a Decision of the Council of Ministers. The new Decision aims to make a successful Citizenship by Investment program even more accessible and customized to the needs and conditions of the Cyprus and global economy. Four major changes are introduced: Firstly, the minimum investment barrier is reduced, enabling the investor to acquire a Cypriot passport on the basis of the purchase of a residence unit(s) in Cyprus with a total value of €2 million, instead of participating to a collective investment scheme with 2,5 million, as provided by the old Program. Investments in other real estate, businesses and funds are also eligible under the €2 million threshold, plus a residence unit of €0,5 million plus VAT, instead of €3 or €5 million provided by the old Program. Secondly, the applicant investor must be the holder of a residence permit, in order to qualify for the acquisition of the passport. In practice, this amendment is expected to have minimal effect on the processing time for the acquisition of the passport; the applicant shall apply for a residence permit on the same day that he applies for the Program, while no citizenship qualifying period is introduced. The criteria for the acquisition of the residence permit are identical to those prescribed for the Program. Thirdly, the parents of the applicant are eligible to obtain the citizenship, provided that they purchase a residence unit with a value of €0,5 million, plus VAT (if applicable). Fourthly, the options to acquire the Passport through deposits in banks and as a result of the 2013 “haircut” are abolished, while a separate option is introduced allowing to invest €2 million to Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations licensed by the Cyprus Securities Exchange Commission. Pursuant to the revised Program, Cypriot citizenship shall be acquired when a foreign investor/entrepreneur meets the requirements under one of the following four options: Α.1 Investment in real estate, land development and infrastructure projects The applicant must have made an investment of at least €2 million for the purchase or construction of buildings, or for the construction of other land development projects. Mere purchase of land is included, provided that this land can be developed town planning-wise and a development investment plan is in place. Α.2 Purchase or creation or participation in Cypriot businesses or companies The applicant must have made an investment of at least €2 million in the purchase, creation or participation in businesses or companies that are based and operating in the Republic. These businesses or companies should have a tangible presence in Cyprus and employ at least five (5) Cypriot or EU citizens. A business plan should be in place, providing for the investment of the €2 million exclusively in Cyprus. Α.3 Investment in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations licensed by the Cyprus Securities Exchange Commission The applicant must have purchased units with a value of at least €2 million in Alternative Investment Funds or financial assets of Cypriot companies or Cypriot organizations licensed by the Cyprus Securities Exchange Commission. The investments of these funds or companies should be made exclusively in Cyprus. Α.4 Combination of the aforementioned options The applicant is required to have a combination of two or more options amounting to at least €2 million. For the purposes of this option, the investor may purchase special state bonds of the Republic of Cyprus with a value of at least €0,5 million. Criterion A.1 shall remain the most popular and cost-effective option, enabling the investor to acquire a Cypriot passport on the basis of the purchase of a residence unit(s) in Cyprus with a value of €2 million provided that at least one of these residence units has a value of €0,5 million, plus VAT (if applicable). Due diligence is further enhanced with the introduction of a provision enabling the Ministries involved to request a valuation from an independent chartered surveyor, as regards the value of the real estate purchased. A transitional period is granted until the 31st October 2016, during which an investor can apply under any of the old and new Program. For further information on this topic please contact Mr. Michail Kamperis (firstname.lastname@example.org) Tel.:+35722 878187 The content of this article is intended to provide a general guide to the subject matter. Specialist advise should be sought regarding your specific circumstances.