By Riana Treppides
With more than three decades of presence operating as a leading international advisory services firm, K. Treppides & Co Ltd offers insight into the latest residency and investment trends to impact Cyprus.
Situated in the Mediterranean Sea,Cyprus has long been an attractive destination for non-European entrepreneurs and investors, thanks to a reliable and legislative regulatory framework, a stable tax system anda favourable investment environment.
In addition, the recent discovery of natural gas has added to the country’s popularity the world over, with numerous international enterprises seeking to pursue their investment plans here.
The proximity of Cyprus to the troubled Middle East in combination with the secure, friendly environment and protective legal system that Cyprus offers makes Cyprus a natural home for many people.
To encourage further foreign direct investment and attract moreinvestors to settle and do business in the country, the Council of Ministers of the Republic of Cyprus revised the Cypriot Citizenship-by-Investment Scheme, which came into effect on 13th September 2016.
The scheme, which saw the abolition of the €12.5 million Collective Investment Scheme, now enables non-Cypriot citizens to obtain full Cypriot citizenship when an investment of€2 million or more is made in real estate, land development and infrastructure projects.
Encouragement and incentives should be given in order to direct investments into targeted and essential infrastructure and renewable energy projects
There is also the option to invest in businesses or companies operating in Cyprus, or in alternative investment funds and financial assets of Cypriot enterprises and organisations licensed by CySEC.
If the main investment is not in properties, businesses or investment funds, or if the applicant wishes to invest in a combination of the above, then an investment of €2 million plus a residential unit of €500,000 is required. All investments must be maintained for a period of three years from the date of obtaining the Cypriot/EU Citizenship.
Since its implementation, a significant number of individuals from across the globe have invested in the program thanks to the numerous benefits of the Cyprus scheme compared to similar schemes offered by other countries, including inter alia the simple and efficient application procedure, the short timeframe for approval and the investment element of the scheme which allows the exit from an investment after the 3-year lock up period.
Further, there is no requirement to donate funds to a Government Fund.Investors also benefit from the right to security within the European social and legal system.
Upon successful application and granting of the citizenship, the spouse and dependent children of the investor also gain full EU rights, thus enabling them to enter, reside, study and work in any country of the European Union, and travel without a Visa to over 150 countries worldwide. It is also possible for the parents of the main applicant to apply for Cyprus/EU citizenship, provided there is an additional investment of at least €500,000 (plus VAT) in residential property.
Strong Growth Prospects Continue to Attract International Investment
The revised incentive offers an ideal means of further boosting Cyprus’ economy and ensuring that foreign investments continue to be directed into Cyprus.
The attraction of high-net-worth individuals as a result of the scheme, the attractive tax system for highly paid non-Cypriots domiciling in Cyprus and the enhancement of the construction and development sector as a result of the investment are strong and resilient arguments for the Cyprus Government to defend criticism against the Scheme.
Going forward – considerations for the future
Planning ahead and taking into account the undeniable positive impact and contribution of the Scheme on Cyprus’ economy, it is critical for the Government to safeguard and enhance it by adding more economic sectors in the eligibility criteria.
Encouragement and incentives should be given in order to direct investments into targeted and essential infrastructure and renewable energy projects (thus trying to reduce the flow of investments into the overheated real estate sector), and also sectors that would create the platform on which to build the country’s future growth sectors, ideally in the technology and innovation space.
It is also important to demonstrate that there is a zero tolerance policy towards malpractices from the various stakeholders involved in the Scheme, and thata Best Practice policy is applied together with effective monitoring and close supervision.
Of equal importance should be the medium and long-term effects of the Scheme onthe culture and society of our country. Such effects should be examined, and the smooth integration of newly naturalised people into the Cyprus culture should be targeted.
Successful integration, with regards to accepting and being accepted, as well as defining innovation, will bring tremendous and incremental value to Cyprus and its people, since it will lead to further investments, job creation, advancement in art and culture and reinforcedstability.
The author is HR Partner. Contact details: firstname.lastname@example.org www.treppides.com
K. Treppides & Co Ltd, the largest independent consulting firm based in Cyprus, with established international presence and offices in London and Malta, offersa full range of legal, tax, accounting, consulting and financial advisory services to international Investors that are operating within a wide range of industry sectors. The company possesses many years of experience and a team of experienced members of staff who remain on hand to assist individuals and businesses throughout the entire investment process, in and through Cyprus.