By Alex Georgiades, Associate Lawyer at Dionysiou & Partners LLC

In February 2019, the Cyprus Government has announced new changes to the Cyprus Investment Program (CIP) in order, as it describes, to reduce the risk of abuse.

These include notable changes, in that the potential investor should already be a holder of a Schengen Visa before being able to apply for investment, and Government Bonds are no longer included in the list of qualifying investments.

Overall the investment program as it now stands includes citizenship by investment through new aspects that cannot be waived such as a €75,000 donation to the Cyprus Land Development association. Furthermore, there is now a compulsory donation of €75,000   euros to the “Foundation for Research and Innovation” or alternatively an investment of €75,000 in a certified, Innovative Business or Social Welfare Company” approved by the Ministry of Finance. Alternatively, the applicant can invest under the “Acquisition or Incorporation or Participation in Cyprus companies” which should add up to at least 20% of the necessary investment cost of the criteria mentioned (this should amount to €75,000), in a company active in primary or secondary economic sector or into education, health, R & D, or renewable energy.

Other changes to the program include:

• The inclusion of the shipping sector in the list of eligible investments for the CIP, which should adhere to certain criteria determined by the Ministry of Finance and the Deputy Ministry for Shipping.
• Investment in housing units (including a private permanent residence) has now been increased to €2,500,000 from the current €2,000,000.
• Potential candidates can now invest in Cyprus Registered Alternative Investment Funds (AIFs), as well as invest up to €200,000 in the Cyprus Stock Exchange’s secondary market.
• If the 3 total investments including the private residence amount to €2.5 million, and residential units already used for the purposes of the Investment program which will be reused under the same program, the stipulation that if the applicant has made investments in a residential unit(s) on the basis of criterion “Investment in Immovable Property, Land Development and Infrastructure Projects” then there is no requirement for the purchase of another private residence in Cyprus.
• The required investments will now need to be maintained for at least 5 years as opposed to 3 years under the previous regime.
• If another EU member state has rejected the applicant’s previous application for citizenship in that member state then the applicant will not be eligible to apply for Cypriot citizenship through the CIP framework.

Please contact DP Law Cyprus for more information with regards to the Citizenship by Investment Scheme.