Cyprus Golden Visa May Rise

The government of Cyprus and developers are discussing stricter requirements for citizenship applicants

Cyprus President Nikos Anastasiadis discussed with the country’s leading developers a number of amendments to the Cyprus Investment Citizenship Program. One of them is a possible increase in the cost of the program at € 500,000, to € 2.5 million. 

Cyprus is a member of the European Union since 2004. The Cyprus Investment Citizenship Program has been operating for five years. “From the beginning of 2013, when the program began to function, more than 2500 families from different countries received citizenship. Most of them are absolutely legitimate investors who have invested their money in the economy of Cyprus, primarily in real estate, ”says Andrey Manukovsky, chairman of the board of directors of Moscow Sotheby’s International Realty. “Many of those who received Cyprus passports have become Cyprus tax residents.”

The United States and the European Commission expressed their doubts about the integrity of the verification of all candidates for citizenship of Cyprus, explained Manukovsky. In this regard, the President of Cyprus held a special meeting with the participation of relevant ministers, as well as business representatives. Possible changes in the program, mainly related to the tightening of requirements for candidates, were discussed.

According to Manukovsky, the issue of raising the cost of citizenship was really raised at a meeting with developers, however, it was decided not to do this and leave the minimum amount of necessary investments to obtain citizenship at € 2 million. The increase in the cost of the program plays into the hands of the president had to give way to developers who are very strong lobbyist community on the island. “Representatives of the construction sector oppose the idea of increasing the amount of investment from € 2 million to € 2.5 million. They are dissatisfied with this idea and remind that when buying property, the investor has to pay 19% VAT, which will bring the total amount of required investments to € 3 million, ”says Berezin.

According to Manukovsky, the meeting also decided to attract independent companies to verify candidates. With this, the Government of Cyprus meets the requirements of the European Commission to tighten the requirements for applicants (candidates).“This requirement will not complicate the program, since even today all candidates had to undergo a very tough filter of checks from the Cyprus banking community, and external companies are unlikely to impose more stringent requirements,” Manukovsky said.

Another measure looks more effective: at the meeting, it was proposed to introduce a new non-refundable tax on the purchase of real estate in the amount of € 150,000, of which 100,000 will go to the innovation fund, and 50,000 to the special fund to subsidize the construction of housing for the citizens of Cyprus. This measure is designed to satisfy the demands of critics of the program and benefit the common citizens of Cyprus. Some innovations limit not only investors but also developers themselves. When selling the new building to the applicant, the developer must have a permit for the territory planning. Only in such situations, the applicant has the right to apply for citizenship. 

“This amendment will make the Cyprus property market more transparent,” says Anastasia Demidova-Zenonos, director of the foreign real estate department at Zen Invest. – Today, 

developers are trying to sell future real estate even without permission for planning. Perhaps this amendment to the legislation will protect buyers. “

In addition, the meeting participants discussed the requirement that all applicants have a valid open visa. An investor will not receive Cyprus (EU) citizenship if he has already been denied by any other country belonging to the European Union. All these changes in the program in the near future should come under the jurisdiction of the parliament (before this restriction was introduced by secondary legislation at the government level). “Now these proposals must take the form of a law, and it will be considered by parliament in the near future,” says Manukovsky.

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