Published by Fotini Ntorzi
The Cyprus government in an attempt to attract further foreign investment to the island,announced revised investment criteria for Non-EU nationals wishing to acquire permanent residency in Cyprus. To this respect, the third revision of the rules under which investors may obtain permanent residency in Cyprus came into effect on 24 March 2021. New investment options are now available granting applicants the flexibility in selecting the appropriate investment opportunity that matches their immigration purposes.
Given the aforesaid, the Non-EU applicant may now make an investment of at least €300,000 in one of the categories A to D as outlined below.
A. Investment in a house/apartment: Purchase of a house or apartment from a development company, which should concern a first sale of at least €300,000 (plus VAT).
B. Investment in real estate (excluding houses / apartments): Purchase of other types of real estate such as offices, shops, hotels or related estate developments or a combination of these with a total value of €300,000. The purchase of interest can be the result of a resale.
C. Investment in Cyprus Company’s share capital, with business activities and personnel in Cyprus: An investment worth €300,000 in the share capital of a company registered in the Republic of Cyprus, based and operating in Cyprus with a proven physical presence in the island and employing at least five (5) people.
D. Investment in units of Cyprus Investment Organization of Collective Investments (forms of AIF, AIFLNP, RAIF): An investment worth €300,000 in units of Cyprus Investment Organization Collective Investments.
Clarifications for investing in real estate.
The revised regulations provide certain clarifications as regards the category of investment outlined in point (A) above (i.e. investment in a house/apartment).
i. The Non-EU applicant may purchase up to two (2) units of residential property, (apartments or houses), provided that the total market value meets the minimum requirement of €300,000 plus VAT. It shall be noted that the properties do not have to be purchased by the same land development company.
ii. The aforesaid purchase must relate to dwellings sold for the first time by a land development company, unless the purchase of the dwellings took place before 07/05/2013. Although resales are not acceptable, sale contracts related to resale of dwellings and have been submitted in the Land Registry before 07/05/2013 will be accepted.
In addition to the aforesaid, it continues to be the case that the applicant when investing in real estate should submit together with his application the title deed or a sale contract in his name and/or the name of his spouse, which has been filed at the Department of Lands and Surveys for a house or any other real estate of total market value of at least €300,000 (plus VAT, if applicable) and payment receipts of at least €200,000 (excluding VAT), regardless of the delivery date of the property.
Evidence should also be provided that the funds for the investment have emanated from abroad and are not a product of internal borrowing, and these funds need to be deposited in a financial institution in Cyprus in the vendor’s bank account.
It should be noted that the purchase of real estate can be made by a legal entity in which the applicant and/or his spouse are the sole shareholders or the ultimate beneficial owners, and which entity is legally established in the Republic of Cyprus or in another Member State of the European Union or the European Economic Area.
Requirement of a Secure Annual Income
The requirement of a secured annual income from abroad continues to be in force under the amended regulations. The applicant in addition to making the investment, should also be able to demonstrate that he/she has at his/her disposal a secure annual income of at least €30,000. This annual income is increased by €5,000 for each dependent family member and €8,000 for each dependent parent of the applicant or his/her spouse.
Source of funds
As it applied before the revised criteria took effect, in the event that the applicant makes an investment under the investment category A above, to purchase a house or apartment, it is important that he/she can prove that his/her income derives from abroad. However, in cases where the applicant chooses to invest under one of the investment categories outlined in points (B), (C), or (D) above, the new regulations provide that the applicant’s source of income may be derived from activities within Cyprus.
Submission of clean criminal record
The applicant and his/her spouse should not be considered as a threat in any way to public order or public security in Cyprus. Therefore, it remains a requirement, that they must submit a clean criminal record certificate from their country of origin and residence.
Declaration of ‘No intention to work in the Republic’
It continues to be the case that the applicant and his/her spouse shall confirm that they do not intend to undertake any sort of employment in Cyprus. However, an exception is applied in case the applicant and/or his/her spouse are employed as directors in a company in which they have chosen to invest under the regulations.
In addition, under the revised regulations, in cases where the investment does not concern the company's share capital, the applicant and/or his spouse are allowed to be shareholders in companies registered in Cyprus and the income from dividends deriving from such companies shall not be considered as an obstacle for the purposes of obtaining the permanent residency. In such companies, they may also hold the position of an unpaid director.
Requirement of Proof of Residence
Under the revised regulations, in cases where the applicant chooses to invest in one of the investment categories outlined in points (B), (C) or (D) above, he should provide evidence regarding his residence in Cyprus (e.g. title of ownership or contract of sale and proof of payment for the property or rental agreement).
Dependent persons of the applicant
The Permanent Residence Permit is issued to the applicant and it covers as dependent persons his/her spouse and children up to the age of 18.
As it was the case before the revised regulations, an immigration permit can be granted to unmarried children of the applicant between the ages of 18 and 25, who proved that, at the date of the application, they are attending higher educational institutions abroad and provided they are financially dependent on the applicant. Such dependent children shall submit their own separate applications for an immigration permit upon proofing an additional annual secured income of €5,000 for each such dependent child.
However, if the children of the applicant between the ages of 18-25 study in any Institution of Tertiary Education in Cyprus, they will have to apply for a temporary residence permit in the Republic as students in line with the provisions of the relevant legislation (EU Directive). Following the completion of their studies in the Republic, they will be entitled to apply for a permanent residence permit, regardless of their age with the only condition that the main applicant provides evidence of an additional annual income of €5000 per annum.
The aforesaid permit will continue to apply after the age of 25, even if the children marry by then, and they are no longer students or financially dependent on the applicant. It is noted that their future spouses and their minor children may not be included as dependent persons in such a permit.
It continues to be the case that the parents and parents-in-law of the main applicant can apply on the basis of the main applicant’s investment, with the submission of separate applications for each person and with the condition that the applicant will present an additional annual income of €8,000 for each dependent parent or parent-in-law.
Higher Value Investment covering Adult Children
A remarkable addition in the regulations is related with the possibility of the applicant to make an investment of a higher value in order for his/her adult children (who are not financially dependent on him) to obtain an immigration permit. The aforesaid is feasible subject to the following conditions:
i. The market value of the investment of €300,000 needs to be multiplied by the number of adult children, which will rely on such investment for the purpose of obtaining an immigration permit.
ii. In case the investment will concern the purchase of real estate, i.e., where the applicant chooses to invest in the categories (A) and (B) above, a proof of payment of at least 66% of the market value of the real estate must be submitted upon application.
iii. It must be mentioned that, in such cases, each adult child must be able to prove a secured annual income of at least €30,000, which will be increased by €5,000 for each dependent person.
iv. Finally, the investment can be made jointly in the name of the applicant and the adult child or exclusively in the name of the applicant.