Emigrate to Cyprus as an Investor
Cyprus is an attractive place to reside, with a warm and stable climate, and located in a convenient geographical position in the eastern Mediterranean.
In line with the Cyprus Government’s intent to increase foreign investment, and to help its economic development, Regulation 6(2) of the Aliens and Immigration Regulations has recently been simplified by the Ministry of Interior in order to issue Residence Permits to applicants from non-European countries, provided that the following requirements are met:
|1.||The main requirement is the purchase of new immovable property of a total market value of at least EUR 300,000 plus VAT. The applicant must submit the application form accompanied by a contract of sale and proof of payment of at least EUR 200,000 plus VAT. The contract of sale must have been submitted to the Cyprus Department of Land and Surveys. The property can also be bought by a company provided that the company is registered in the name of the applicant or the applicant and spouse, and they are sole shareholders.|
|2.||The applicant must submit a confirmation letter from a Cyprus bank that they have deposited a minimum capital of EUR 30,000 from abroad into an account which will be locked for three years. After the expiration of this period, the money will be released without restrictions.|
|3.||The applicant must provide supporting evidence of a secured annual income of at least EUR 30,000 deriving from abroad. This income must increase by EUR 5,000 for every additional child and EUR 8,000 for each dependent parent. This income may include salaries from employment, rents, pensions, and dividends from shares, etc.|
Procedures and Time-Frame
A fee of EUR 500 is payable with the submission of the application and EUR 50 extra for the biometric capturing. The application will then be examined by the Civil Registry and Migration Department and will be submitted to a permanent secretary of the Ministry of Interior for a decision within two months. Once approval has been granted, the applicant and all the members of the family must visit Cyprus within one year to obtain the actual permit.
When in Cyprus, a visit is organised to the migration office in Nicosia in order to capture the biometric data for all members of the family applying. The biometric data can be submitted either with the submission of the application for residence, during the application process, or immediately after approval.
Benefits of the Cyprus Residence
- Fast track application procedure, within two months
- High approval rate if all criteria are satisfied
- It is not necessary to reside in Cyprus but a visit once every two years is required
- Dependants can be enrolled in high-quality private schools, offering English language courses
- Residence applies to the whole family (applicant, spouse and children under 18 years old)
- Dependent children between 18-25 and parents of the applicant are also eligible
- The whole process can be arranged without being present in the country, however, a visit is required for bio-metric capturing
Secure Cyprus Citizenship As An Investor
The Cypriot Government has established a number of incentives to attract foreign direct investment into the country. One of these is a citizenship-by-investment program that grants full Cypriot citizenship to those that invest more than EUR 2.5 million in real estate and who meet certain other requirements. Successful applicants gain the right to live, work and study in all 28 EU member countries.
In April 2013, the Government of Cyprus introduced changes to its citizenship-by-investment program. The changes include the introduction of the Major Collective Investment (MCI) route which reduces the minimum investment amount from EUR 5 million to EUR 2.5 million when several applicants jointly apply for citizenship with a total minimum investment of EUR 12.5 million. Note: Not all economic criteria can be used under the MCI route.
Any non-Cypriot citizen may apply for Cypriot citizenship through Naturalization by Exception if he/she meets one of the following economic criteria presented below. The qualification may either be done personally or through a company/companies in which he/she acts as a shareholder or even as a high-ranking senior manager.
|1.||Acquisition of government bonds|
The applicant must have purchased state bonds of the Republic of Cyprus of at least EUR 2.5 million
|2.||Real estate |
This option requires an applicant to acquire at least EUR 2.5 million of real estate (residential, commercial or infrastructure projects)
|3.||Acquisition of financial assets of Cypriot companies or Cypriot organisation |
The applicant must purchase financial assets of Cypriot companies or Cypriot organisations (bonds, securities or debentures registered and issued in the Republic of Cyprus) of at least EUR 2.5 million
This option would require the candidate or a company or trust of which he/she is the main beneficiary to hold a fixed deposit of at least EUR 5 million in a local bank for at least three years
|5.||Purchase, creation or participation in Cypriot businesses or companies |
The applicant must make an investment of at least EUR 2.5 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 demonstrable and tangible presence in Cyprus and employ at least five Cypriot citizens
If a client would like to apply as a single applicant, then the investment amount should not be less than EUR 5 million.
Another important requirement that applies to every economic criterion chosen is the purchase and a lifetime possession of a property in Cyprus that will be declared as the applicant’s residence in Cyprus. The purchase price of the particular property should be at least EUR 500,000 plus VAT. In the case that the applicant proceeds with the Real estate option, this property can be included in the EUR 2.5 million investment.
The process of obtaining Cypriot citizenship consists of a series of important steps that need to be implemented professionally and carefully. Haskew Law manages each step and ensures that they are executed correctly and at the right time, since each part of the process, if not properly handled, can affect the final citizenship approval.
We also help our clients to choose the most liquid and most suitable investment opportunities, evaluates all possible investments in relation to potential exit strategies, prepares and submits the application for citizenship to the government, follows up with the authorities while the case is being processed, and receives approval and passports for the clients. We also help clients to manage their properties and provide a further, enhanced menu of concierge services.
Following the submission of an application, We typically achieve approvals within three months. This quick process makes Cyprus one of the fastest destinations in which to obtain a second citizenship.
Even though the procedure for obtaining Cypriot citizenship is relatively straightforward, it is a very delicate process that requires a detailed level of focus on the detail and structuring of the investment. We have a wealth of international and local expertise and a high success rate of delivering the grant of citizenship within the three-month time frame.
We only work with investors who have passed our internal due diligence checks, which are similar to those used by the Government of Cyprus. Police clearance records from the current country of residence must also be provided at this preliminary stage.
Benefits of the Cypriot Citizenship-By-Investment Program:
- Citizenship of an EU member state
- Acquire the right to live, work, and study in all 28 EU countries
- Acquire the right to security within the European social and legal system
- Full citizenship and passports are granted to the applicant and include family members
- A Cypriot passport allows visa-free travel to 159 countries around the world
- Flexible options with no residence required; approval usually within 90 days
- Qualify by acquiring assets in Cyprus, with no requirement to donate your wealth
Cyprus Real Estate for investors
The property market in Cyprus saw an increase in property demand from 2004-2008, which led to developers increasing supply to meet the demand. However, due to the global financial downturn, the demand for real estate dropped, leaving many completed properties available in 2009. Without demand, the prices reduced significantly and therefore created a strong opportunity for buyers.
The main element of a healthy Cyprus real estate market has always been residential property and specifically, within the luxury segment, second homes.
The property options in Cyprus that offer buyers the highest value for money include:
- Seafront properties
- The areas in highest demand provide lifestyle aspects (i.e. beaches) and infrastructure, which are areas such as Limassol, Pafos, and Ayia Napa
- Integrated master planned communities
- These usually have a golf course or community at their core, offering properties that cater to all types of owners and include locals, new residents, second homeowners and vacationers
The price per m2 for properties of this nature is regularly between €10,000 - €22,000 depending on the location and building specifications. A good figure to maintain is around €10,000 as you can be comfortable knowing there is room for appreciation.
Most foreign buyers purchase properties in the above-mentioned classifications, as opposed to purchasing a property in the capital city.
Form an Investment Trust in Cyprus
Trust formation in Cyprus is governed by the Cyprus International Trusts Law 1992 which complements the Trustees Law Chapter 193 of 1955 which in its turn was based on the English Trustees Act of 1925.
A Cyprus International Trust in simple terms can be defined as the obligation which is placed upon a Trustee by the Settlor to manage the trust property for the benefit of the Beneficiary in accordance with the trust instrument.
Who can create a Cyprus International Trust and are there any restrictions?
A Cyprus International Trust can be created by anyone provided of course that the Settlor is of sound mind and of the right age. The restrictions imposed by the International Trusts Law of 1992 to 2012 focus on the residency status of the Settlor, the Trustee and the Beneficiary are provided below:
The Settlor is the person who sets the Cyprus International Trust and can be either a natural or legal person but must not be resident in Cyprus during the calendar year immediately preceding the creation of the trust;
The Trustee or at least one of the Trustees must be resident in Cyprus for the whole duration of the Cyprus International Trust. This means that if the Settlor wants to appoint a Trustee who has his residence outside of Cyprus then he must appoint a second trustee.
The Beneficiary or Beneficiaries must not be resident in Cyprus during the calendar year immediately preceding the creation of the trust and that applies equally whether the beneficiary is a natural or legal person.
What are the formal requirements to create a Cyprus International Trust?
The formalities that need to be met for the creation of a Cyprus International Trust are:
a) Comply with the residency requirements of the International Trusts law;
b) Make sure that the trust instrument satisfied the 3 certainties requirement;
c) Provide the information related to the Trustees to the relevant competent authority as per the September amendment to the law;
d) if the Cyprus International Trust is created by a will, the formal requirements indicated in the relevant law on wills must be complied with;
e) Payment of stamp duty of €430;
As stated above order for a Cyprus International Trust to be valid we need to have the following 3 certainties present:
a) Certainty of Intention = we must be able to demonstrate the Settlor’s express intention to create the trust;
b) Certainty of Subject Matter = the assets which will form the trust property must be readily identifiable and tangible;
c) The certainty of Objects = the identity of the beneficiaries must be clearly stated and sufficiently defined in cases where this involves as large group of people.
Types of Cyprus International Trusts
Express private trusts
The most common form of a Trust which is created by the Settlor expressly either by using a deed, in writing, by will and in some exceptional circumstances an oral statement could be seen as sufficient. The 3 certainties must be present at all times.
A Cyprus International Trust shall be deemed to be charitable if the 3 certainties are present and if it falls under the provisions of s.7 of The International Trusts Law of 1992 and 2012 and the Trust must have as its main purpose the achievement of one or more of the following:
a) the prevention or relief of poverty;
b) the advancement of education;
c) the advancement of religion;
d) the advancement of health or the saving of lives;
e) the advancement of citizenship or community development;
f) the advancement of the arts, culture, heritage or science;
g) the advancement of amateur sport;
h) the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;
i) the advancement of environmental protection or improvement;
j) the relief of those in need by reason of youth, age, ill-health, disability, financial hardship or another disadvantage;
k) the advancement of animal welfare and protection of animals;
l) any other purposes beneficial to the public in general or which may reasonably be considered to be incidental to any purposes falling within any of the paragraphs above.
Fixed Trusts provide that the Beneficiaries shall only be entitled to the specified trust property which is indicated by the Settlor upon the creation of the Trust.
With discretionary Trusts, the Settlor has vested to the Trustees a discretion in regards to the sum each Beneficiary shall be entitled from the trust property.
Legal benefits of creating a Cyprus International Trust
a) A Cyprus International Trust can be used as an asset protection vehicle as it is immune from forced heirship and claw back rules in other jurisdictions where the assets are located;
b) A Cyprus International Trust does not become void even where the Settlor becomes insolvent or bankrupt;
c) A Cyprus International Trust which was set up after 2012 has no limit on the period over which it is valid and enforceable;
d) When a creditor contemplates that the Settlor used the Cyprus International Trust to defraud him the burden of proof is upon the creditor to prove such a sham within 2 years of the creation of the Cyprus International Trust. After a 2 year period, the creditor will be barred from bringing an action against the trustees.
Taxation of a Cyprus International Trust
a) If the Beneficiary is not resident in Cyprus and receives income from outside of Cyprus this income will not be subject to tax;
b) If the Beneficiary is resident in Cyprus and receives income from Cyprus this income is subject to tax;
c) If the Beneficiary is resident in Cyprus and receives income from outside of Cyprus and also from Cyprus then this income will be subject to tax;
d) A Cyprus International Trust does not pay any tax on income received from outside of Cyprus whereas a Cyprus Company pays income tax on its worldwide income;
e) A Cyprus International Trust does not pay any tax on the interest received provided that the beneficiaries are not resident in Cyprus;
f) Cyprus International Trusts are not affected by the non-existence of a double taxation treaty.
Dividends which are received by the Cyprus International Trust from a Cyprus company are not subject to tax.
Payments to beneficiaries
There is no withholding tax on payments to beneficiaries provided that they are not resident in Cyprus.
Any gains from asset disposal, other than immovable property situated in Cyprus, made by the Cyprus International Trust are not subject to capital gains tax in Cyprus.
No estate duty is payable by a Cyprus International Trust that was formed for the purposes of estate duty planning.
Amendments after 2013 affecting Cyprus International Trusts
As part of maintaining an attractive trust jurisdiction and at the same time remaining compliant with European Law and anti-money laundering laws and regulations the Cyprus Parliament has passed laws amending the Law Regulating Companies Providing Administrative Services and Related Matters of 2012 and the International Trusts Law of 1992 to 2012.
The main amendment which clients need to be aware of is the creation of a Trust Registries which will be maintained by 3 Cyprus regulatory authorities; namely the Cyprus Securities and Exchange Commission, the Cyprus Bar Association and the Cyprus Association of Certified Accountants. For the purposes of ensuring that such information contained in the Trust Registries remains confidential, only the 3 abovementioned authorities will have access to such information and will not be made publicly available in under any circumstance.
What information must be provided to the Trust Registry
1. The name of the Cyprus International Trust;
2. The name and the full address of the Trustee or Trustees of the Cyprus International Trust at all relevant times;
3. The date when the Cyprus International Trust was established;
4. The date of any change in the governing law to the Cyprus International Trust occurred;
5. The date of termination of the Cyprus International Trust.
What details need to be verified?
As per art.7 of the Law Regulating Companies Providing Administrative Services and Related Matters of 2012 Persons providing services of management and administration to trusts are obliged to verify the details and the true identity of the beneficial owners of trusts, including the following categories:
3. Beneficiaries or class of beneficiaries;
4. Protectors, if any;
5. Investment consultants, accountants, tax consultants, if any;
6. Activities of the trust;
7. Any other person that exercises the effective control of the trust.
As the Cyprus International Trust must have at least one (1) Cyprus-resident Trustee, it will be the responsibility of that Trustee to notify the relevant competent authority fifteen (15) days after the creation of the Cyprus International Trust or in a case where Cyprus law becomes the governing law of the Trust. Any amendment that follows must also be notified to the competent authority not later than fifteen (15) days of such amendment.
Will these amendments affect existing Cyprus International Trusts?
These amendments will be retroactive, meaning that every Cyprus International Trust created in Cyprus (provided that it has not been terminated) will have to comply with the amendments to the Law Regulating Companies Providing Administrative Services and Related Matters of 2012 and the requirement to provide the details of the existing International Trust by the 9th of March 2014.
How long will the information be kept on the Trust Register after the termination of a Cyprus International Trust?
The information will remain in the Trust Register for a term not exceeding 5 years after the termination of the Cyprus International Trust.
How easy is it to set up a business in Cyprus?
Establishing a company is an easy thing to do in Cyprus. The Cypriot govern is helping the foreign investors in its attempt to attract foreign capital especially by using an advantageous tax system and low red tape.
The registration procedure doesn’t take longer than 10 days and the entrepreneurs are encouraged to open one of the types of business regulated by the Company Law: limited liability companies, public limited companies or a company limited by guarantee or general and limited partnerships.
Setting up of a company in Cyprus must begin with choosing a proper, unique name that can be checked at the Registrar of Companies. The memorandum of association, notarized and elaborated by a lawyer must be a deposit, along with the specific documents at the Companies Section of the Department of Registrar of Companies and Official Receiver. After registration, the Ministry of tax must provide a unique tax number and a VAT. The last step is registering at the Ministry of Labor for Social Contribution.
How easy is it to hire personnel in Cyprus?
An important advantage of owning a company in Cyprus is the highly educated work-force, mostly English speaking.
The minimal working age is 15 years old.
The staff can be recruited from the numerous employment agencies. Also, the Cyprus Human Resource Management Association for information and the Cyprus Chamber of Commerce and Industry (KEBE) can provide information regarding hiring personnel.
The contract of employment can be with determined a period or an undetermined period. It must state the location of the company, details regarding the job, the start and end of the activities, details regarding the salary and other benefits. A collective agreement can also be signed and has a duration of two years usually.
An employer can also hire personnel for a part-time job, for a specific period of time or for working from home. The working time cannot exceed 48 hours a week and at least 11 hours of rest during a 24 hour period.
A series of benefits for the employees are granted. The sickness benefits are paid for a period of 156 days. All the unemployed can receive an unemployment benefit for a period of 156 days. The maternity allowance is paid for 18 months.
There are certain conditions that companies from Cyprus should accomplish before hiring foreign staff: the company must be listed at a stock market and the direct shareholders must be registered at the Immigration Control Board and the Civil Registration Board, the capital sources must be transparent, must have an administrative office located in a proper district and the financial stability is proven by annual balance sheets.
A foreign employee must receive a resident permit before hiring. For this, he must submit the following documents to the Immigration dept at the local police: a tax for the permit, a CV, the passport, medical certificate and insurance, criminal record, the labor contract (must contain the duration of the contract and the salary), bank guarantee and two completed specific forms.
All EU citizens must be registered for taxes at the Department of Inland Revenue for receiving a taxpayer identification code.
Any working dispute is regulated by the Industrial Relations Code, except for the strikes, usually mediated by the Labor Ministry.
What are the main points of interest for foreign investors in Cyprus?
Cyprus is well known for the advantages offered to the investors, especially in the transportation areas. For example, the profits from the operations of the Cypriot vessels are not taxable. Also, the dividends of the companies that own ship are exempt from tax.
Cyprus has an excellent infrastructure, with 2 international airports, 3 shipping ports (in Lemesos, Larnaca and Vasilikos) and a modern road network. This facilitates the export and import of the goods.
International and multinational companies and banks are operating in Cyprus attracted by the small operating costs, economic freedom and the well trained local companies, ready to counsel if necessary.
The pleasant weather, the culture and the Mediterranean cuisine are attracting tourist all year long.
What are the advantages of a holding company in Cyprus?
Cyprus is situated in the Mediterranean Sea, at the crossroads of Europe, Asia and Africa. Joining EU in 2004 bring major advantages to the foreign investors, such as allowing the foreign ownership of a company, increasing demand for property, signing different treaties in order to protect the interests of the entrepreneurs.
Also, double tax treaties were signed with more than 40 countries, in order to avoid the double taxation of the incomes of the foreign companies.
Since 2008, Cyprus has joined the Economic and Monetary Union and as a result, the exchange rate risks were eliminated and the monetary transparency took its place.
The tax corporate is the lowest in Europe, only 10% and this is encouraging more and more businessman to open companies in Cyprus. Also, the following are not taxable: dividends, dividend income, profits from an overseas permanent establishment. No withholding taxes are applied to interest and royalties paid from Cyprus and dividends.
Considered one of the safest places to live in Europe, Cyprus attracts new investors every year.
More Facts About Cyprus
Cyprus’s economic freedom score is 67.8, making its economy the 48th freest in the 2018 Index. Its overall score has decreased by 0.1 points, with a steep decline in the score for government integrity and declines in property rights and judicial effectiveness overwhelming significant improvements in financial freedom, fiscal health, and government spending. Cyprus is ranked 24th among 44 countries in the Europe region, and its overall score is below the regional average but well above the world average.
As Cyprus continues to recover from the financial crisis, the government has committed to improving fiscal discipline and undertaking other structural reforms such as the sale of state assets to improve the efficiency of state-owned enterprises and raise funds to reduce government debt. Cyprus does particularly well in trade freedom and monetary freedom. The regulatory framework is relatively transparent and efficient, and the financial sector has stabilized.
The Background on Cyprus
Cyprus gained independence from the U.K. in 1960. Tensions between the Greek majority and Turkish minority led to repeated episodes of violence. A U.N. buffer zone has separated the Greek Cypriot Republic of Cyprus from the Turkish Republic of Northern Cyprus since 1974. The Republic of Cyprus joined the European Union in 2004 and acts as the island’s internationally recognized administration. U.N.-brokered reunification talks continue. Center-right Cyprus President Nicos Anastasiades has been head of state and head of government since 2013. In 2016, eight political parties won seats in parliament in a low-turnout election. Services such as tourism, finance, shipping, and real estate account for more than four-fifths of GDP. Developing offshore hydrocarbon resources is a priority.
The Laws in Cyprus
In exceptional instances, private property may be expropriated for public purposes in a nondiscriminatory manner and in accordance with established principles of international law. The Republic of Cyprus has an independent and impartial judiciary that operates according to the British tradition, upholding due process rights. Corruption, patronage, and a lack of transparency continue to flourish in the Turkish-controlled area.
The top personal income tax rate is 35 percent, and the top corporate tax rate is 12.5 percent. Other taxes include value-added and real estate taxes. The overall tax burden equals 33.2 percent of total domestic income. Over the past three years, government spending has amounted to 39.6 percent of total output (GDP), and budget deficits have averaged 0.7 percent of GDP. Public debt is equivalent to 108.0 percent of GDP.
A regulatory framework that is generally conducive to entrepreneurship and an excellent infrastructure make Cyprus a business-friendly country. Relatively flexible labour regulations facilitate employment and productivity growth, although union power is quite strong. The government is committed to privatizing state-owned electricity and telecommunications service providers as well as the ports authority.
Markets in Cyprus
Trade is extremely important to Cyprus’s economy; the combined value of exports and imports equals 124 percent of GDP. The average applied tariff rate is 1.6 percent. In general, government policies do not significantly interfere with foreign investment. After strains and uncertainty in the financial system, with banks heavily exposed to Greek debt, recapitalization and restructuring enabled a relatively rapid return to international markets.
Invest in Cyprus
Name: Investor Visas Residency in Cyprus
Description: There are several options to when it comes to selecting a destination to invest in and emigrate to. Cyprus is one of the most popular and rewarding. The list of benefits is a long one and the negatives are few. Many investors secure permanent residency or even citizenship in Cyprus as pert of a wider global portfolio of investments.