0n the 24.03.21 the Ministry of Interior of Cyprus announced amendments to the existing Regulation 6(2) of the Aliens and Immigration Regulations, making the obtainment of a Permanent Immigration permit more attractive to foreign investors.
Pursuant to the provisions of Regulation 6(2) of the Aliens and Immigration Regulations, a third-country national (non-EU citizen) can apply for an Immigration Permit through investment, the so-called ‘fast-track’ Permanent Residency Permit, provided that certain investment and quality criteria are met. As the name suggests, the Permanent residency permit’s attractiveness lies in the fact that once granted, it is permanent and does not have to be renewed, unless cancelled.
Investment Criteria
In order to qualify for the Permanent Residence Permit, the Applicant must invest at least €300,000 in one of the following categories of investments from funds that derive from abroad:
- Investment in residential property- house/apartment directly from a real estate development company, which should relate to a first sale (not a re-sale) for the minimum amount of €300.000 plus VAT.
At least €200.000 plus applicable VAT as proof of payment shall be present, regardless of the delivery date of the property.
The property may be purchased through a Company registered in Cyprus, another EU Member State, or a state of the EEA and of which the applicant and/or the spouse are the beneficial owners.
- Investment in commercial property (excluding residential houses/apartments) which should relate to the first-time sale or a re-sale of real estate such as offices, shops, hotels, or similar developments, or a combination thereof, of a total value of at least €300.000.
At least €200.000 plus applicable VAT as proof of payment shall be present, regardless of the delivery date of the property.
- Investment in the share capital of a Cypriot company (a company registered in the Republic of Cyprus) with activities and staff located in Cyprus. The investment in the company’s share capital must be of a minimum amount of €300.000 and the company must operate and be based in Cyprus with a proven physical presence in Cyprus, having hired at least five (5) employees.
A share purchase agreement along with confirmation of payment, Company certificates, a business profile with investment goals, as well as proof from social insurance for the employment of staff will need to be submitted for the processing of the application.
- Investment in units of a Cyprus Collective Investment Organization (type AIF, AIFLNP, RAIF) of a minimum amount of €300.000.
The value of the Investment must be equal to at least €300,000 in units of a Cyprus Investment Fund.
A prospectus or investment plan will be required for submission purposes, along with a confirmation of payment for the purchase of the units and approval of CySEC for the establishment of the fund.
Disposable Annual Income
In addition to satisfying the investment criteria outlined above, the Applicant must be able to demonstrate that they have at their disposal an annual minimum income amounting to €30.000, which increases by €5,000 for each dependent family member and €8,000 for each dependent parent (of the applicant and/or his spouse). This annual income may derive from receiving a wage or salary, dividends from shares, fixed deposits, rents, etc.
In the case of investment under category A – income must strictly originate from overseas
In the case of investment under categories, B, C, and D – income or part of it may originate from related activities in Cyprus.
Last but not least, the application of the Investment Immigration Permit must be accompanied by certain personal documentation regarding the applicant and his family, including, inter alia, the provision of a clean criminal record from their country of residence.
What has changed?
Expansion of Eligible Investment Options- Prior to the amendment of Regulation 6(2), applicants were allowed to invest only in residential property with a total purchase value of at least €300,000 (excluding VAT) – (classified as Investment (A)). Commercial property or investment into the share capital of Cyprus companies was not recognized as an eligible investment under the Permanent Residence Regulations.
The newly improved Regulation 6(2) thus aims to encourage and attract applicants that are seeking a return on their investment, with theintroduction of the new investment options B, C, and D, making the Resident Permit a lot more attractive by giving a choice of investment options to applicants.
Return on Investment – Applicants are no longer required to pledge the amount of €30,000 for three years as annual disposable income. This is a welcome amendment because it means that applicants are able to make a return on their investment, without keeping ‘frozen’ funds in their account. This is an especially notable development for applicants under the investment of categories B, C, D who can now declare the income generated from activities within the Republic (not just from abroad) as forming a part or whole of the required annual disposable amount of income.
Employment as Director – It is further noteworthy, that whereas previously the applicant and their spouse had to provide confirmations that they do not intend to undertake any sort of employment in Cyprus, under the amended Regulations, the main applicant investing under option C is permitted to be employed in the capacity of Director and to receive a salary from their employment.
Benefits
- Immigration Permit under Regulation 6(2) of the Aliens and Immigration Regulations, offers a Non-EU national the right to permanently reside in Cyprus.
- Fast Track procedure: provided that investment and quality criteria are met and that all requested documentation is submitted, applications are examined by the Ministry of Interior within a period of two (2) months from the date of submission.
- Exemption from immigration entry procedures (e.g. Visitor’s Visa)
- Applicant’s family can also obtain it (married spouse, children under 18 years old and financially dependent children up to 25 years old)
- From February 2016 the parents of the investor and/or of his/her spouse can also obtain Permanent Residence as dependants
- Children over the age of 18 who are not financially dependent can also obtain the permit with additional investment.
Conclusion:
The Amendments to Regulation 6(2) are welcomed by many, especially with the suspension of the Cyprus Investment Program and subsequent need for Cyprus to introduce a valuable, comparable alternative, as a means of boosting its economy through foreign investments. The Amended Permanent Residency Programme has added greater choice, almost allowing investors to carry out “investment shopping”, prior to investing the minimum amount of €300,000, in accordance with their needs and objectives. It has further added flexibility for Applicants under Investment Category B,C and D by allowing them to present income derived from sources within the Republic as part of the annual disposable income.
However, the extent to which the new Permanent Residency permit is in fact desirable remains to be seen through the number of applicants that it is yet to attract. The answer to the question on whether obtaining permanent residency in Cyprus has become easier is not yet clear and does depend on the ability of the Ministry of Interior inter alia to process applications within the deadline of 2 months and organise the whole process efficiently. It is surely a step in the right direction, as it aims to attract foreign investment not just into residential property, that is often left unoccupied, but into Cyprus Businesses, a crucial point at the time of a pandemic, where companies are in need of financial aid.
The information provided above by C. Pilyugin & Co LLC is intended for general information purposes only and should not be construed as professional or legal advice in any sense. It is advised that readers should refrain from acting only on the basis of the above information without first obtaining legal or professional advice on the subject.
Our professional team at C. Pilyugin and Co LLC will guide applicants through the whole process, starting from preparing the required applications and gathering documentation to satisfy the quality criteria to seeking out appropriate property for Applicants, based on their preferences and objectives for investment under the Cyprus Permanent Residence – Fast Track Immigration Permit (Regulation 6(2)).
Please send an email to [email protected] or fill out the form below to book a consultation with us.