This article explains the options available to non-Cyprus citizens through which they can, by exception, apply for the acquisition of Cypriot citizenship. This scheme is available non-Cypriot non-EU residents who would like to get EU citizenship which will enable them to move around Europe without the need for any kind of visa. Further, having an EU passport makes the issuance of any visa, around the world, much easier to obtain.

The relevant law, provides for six methods through which an applicant may obtain their Cypriot citizenship and at the same time their EU citizenship. This article will only examine four out of six methods - one of them is not an option we would advise our clients to pursue.

WHO ARE ELIGIBLE FOR APPLICATION

• Non-Cypriot citizens who meet one or a combination of the economic criteria A1-A4 listed below, provided the total investment amounts to at least €2 million (instead of €5 million).
• The Investor may apply either personally or through a company/companies in which he/she participates as a shareholder- in proportion to his holding percentage- or through investments done by his/her spouse or jointly with the spouse (a marriage certificate or civil partnership certificate is required).
• A high-ranking senior manager of a company who meets one of the economic criteria A1-A4 listed below, provided that he/she receives such a remuneration that generates for the Republic tax revenues of at least €100,000 over a three year period and provided that this tax has already been paid or prepaid.
• The necessary investments should have been made during the three years preceding the date of the application and must retain the said investments for a period of at least three years as from the date of the naturalization.
• The granted naturalization may be revoked if, upon periodic inspection, it is established that a criterion, term or condition has been breached.

A. CRITERIA

A1. Investment in Real Estate (immovable property), land development and infrastructure projects:

The applicant must have invested or has to invest at least €2 million for the purchase or construction of buildings or for the construction of other land development projects (residential or commercial developments, developments in the tourism sector) or other infrastructure projects exclusively in Cyprus. However, if the land is eligible for construction or is under construction, a business plan needs to be presented to the relevant Authorities for approval. Investment in land that is situated in a building zone of zero development is excluded.

A2. Investment in financial assets of Cypriot companies or Cypriot organizations:

The applicant should have made an investment of at least €2 million by purchasing or by participating in companies or organizations established and operating in the Republic of Cyprus, with proven physical presence and activities. The invested funds shall be used for the financing of specific investment plans exclusively in Cyprus. The companies must employ at least five Cypriot or EU citizens who have been legally residing in Cyprus for a continuous period of at least 5 years. The minimum number of employees increases when more than one applicant invest simultaneously in the same business.

A3. Investment in Alternative Investment Funds (AIFs) or financial assets of Cypriot companies or Cypriot organizations that are licensed by CySec:

The applicant should have bought or will purchase financial assets or units (e.g. bonds, bills and securities) of at least €2 million from alternative investment funds established in the Republic of Cyprus, licensed and supervised by the CySec (Cyprus Securities and Exchange Commission) and whose investments are made exclusively in the Republic of Cyprus. Any other investments which are approved by the Ministry of Finance may qualify for the present investment scheme.

The administrator and the auditor of the Fund is obliged to report to the relevant Ministries on an annual basis that the initial investment amount is in place.

A4. Combination of the aforementioned investments:

Applicants can have a combination of any of the above criteria amounting to at least €2 million. Within this, the applicant may also purchase special government bonds of the Republic of Cyprus of a maximum amount of €500,000.

B. TERMS AND CONDITIONS

1. Clean Criminal Record.
2. Residence in the Republic of Cyprus. In all cases of investment listed (A1-A4), the applicant must possess a permanent privately-owned residence in the Republic of Cyprus, the purchase price of which must be at least €500,000, plus VAT. This condition does not apply if the Applicant has invested in housing schemes under criterion A1 and one of the housing units is worth at least €500,000 plus VAT and is used as the applicant’s permanent residence. In case the purchase value of the permanent residence exceeds the amount of €500,000, the excess amount can be included in the total investment. Parents of the Applicant or other family members may also obtain the Cyprus Citizenship with an additional permanent residence of €500,000.
3. Residence Permit in Cyprus. Required prior to the applicant’s naturalization. The same applies for family members if they apply for naturalization.

C. SUBMISSION OF DOCUMENTS:

The applicant must submit the following documents:

1. Form M127, properly filled.
2. Birth Certificate
3. True Copy of passport
4. Certificate of Clean Criminal Record from the country of origin or residence.
5. Copies of the publication in a daily newspaper, two consecutive posts, of the intention of the applicant to become a Cyprus Citizen.
6. Two passport size photographs
7. Curriculum Vitae
8. Proof of permanent residence in Cyprus:
   (a) Contract of sale
   (b) Title deed or proof of registration with the Department of Lands and Survey
   (c) Proof of payment of the agreed price.
   (d) Copy of the wire transfer to a Cypriot commercial banking institution in the name of the seller or the seller’s company.
   
   
9. For investment in real estate, land development and infrastructure projects:
   a) Contract of sale
   b) Title Deed or Proof of Registration of the Contract with the Department of Lands and Surveys.
   c) Proofs of payment of the agreed purchase price.
   d) Copy of the wire transfer (electronic funds transfer) to a Cypriot commercial banking institution in the name of the seller or the seller’s company.
   e) Investment Plan for the development of the purchased land, if the investment involves the purchase of land under development.
   
   
10. For investment in financial assets of Cypriot companies or Cypriot organizations:
    a) Contract of sale.
    b) Proof of payment of the agreed purchase price.
    c) Certificate of shareholders by the Registrar of Companies.
    d) Copy of the wire transfer to a Cypriot commercial banking institution in the name of the company or organization.
    e) Specific investment plan.
    f) Copies of the employment contracts of the Cypriot or EU citizens employed by the company in which the applicant has invested.
    g) Confirmation from the Social Insurance Department as to the insurable income of the Cypriot or EU citizens employed.
    h) Copy of the Social Insurance Contributions for every Cypriot or EU citizen employee.
    i) Registration Certificate (MEU1) or Permanent Registration Certificate of Union Citizen (MEU3) for employees that are EU citizens.
    
    
11. For Investment in Alternative Investment Funds (AIFs) or Financial Assets of Cypriot companies or Cypriot organizations that are licensed by CySec:
    a) Title and other relevant documents of the financial assets/units purchased.
    b) Copy of the wire transfer to a Cypriot commercial banking institution in the name of the company or the organization.
    c) Specific investment plan.
    d) Confirmation by the CySec.
    
    
12. For Investment in Government bonds:
    a) Proof from the Public Debt Management Office for the purchase of special government bonds.
    b) Copy of the wire transfer into a bank account of the Treasury of the Republic of Cyprus.
    
    
13. A high-ranking senior manager of a company who applies for naturalisation must provide:
    a) Copy of the employment contract
    b) Receipt from the Department of Inland Revenue

SUMMARY OF AMENDMENTS INTRODUCED IN 2016:

• The investment amount has been reduced to €2 million plus €500,000 plus VAT for residential property, for investments A1-A4 (from €3 or €5 million).
• The applicant has to hold a residence permit for a period of at least 6 months before he can apply for Cyprus Citizenship.
• The amount of €5,000 is payable for the Naturalization Certificate issued by the Civil Registry and Migration Department.
• The applicant’s parents are also entitled to apply for Cyprus Citizenship by exception, provided that they own a privately life-time residence of at least €500,000 (plus VAT).
• An additional payment of €2,000 is payable if the investor’s parents apply for Naturalization by Exception.
• The investor and his/her parents, may collectively acquire a privately- owned residence provided that the total value is at least €1.000.000, plus VAT.
• Where the purchase price of the residential property exceeds the amount of €500,000 (excluding VAT), the excess amount can be calculated and included in the whole investment.
• A cap (maximum) has been set on investment in Cyprus Government Bonds.
• The criterion of bank deposits has been abolished.
• The criterion of collective investments has been abolished.
• A combination of all economic criteria is now possible.
• A broader range of investments is now possible, including land for development, AIFs and financial assets (bonds and debentures) of Cyprus companies issued by the CySec.