Cyprus Citizenship by Investment program was launched in 2013. How many high-income foreigners have already received the passport of this country and what encourages investors to invest in real estate and business in Cyprus? Find the details in our today’s article.
The passport of Cyprus in exchange for investment: Relevant statistics
One of the most popular EU locations where you can apply for a second citizenship by investment is Cyprus. The best proof of that is the statistics on the number of the issued passports under the Citizenship by Investment program (Scheme for Naturalization of non-Cypriot investors by exception).
From 2008 to 2018, 3,336 foreign investors and members of their families have become the country residents. According to the official statistics, wealthy foreigners started expressing more interest in Cyprus after the 2013 financial crisis, when the government introduced a number of benefits with the aim of attracting private foreign capital to the country’s economy. The peak was recorded in 2017. From January to December, the authorities of Cyprus issued passports to 1,013 applicants. In 2018, 92 candidates have already become residents.
THROUGHOUT THE WHOLE PERIOD OF THE PROGRAM EXISTENCE, ABOUT €5,000,000,000 HAS BEEN CONTRIBUTED TO THE COUNTRY’S ECONOMY VIA CBI PROGRAM.
Cyprus cares about confidentiality
You will not be able to find lists with names of investors who were approved to become Cyprus citizens. The government supports the confidentidentiality policy and does not reveal the new residents’ identities. The information about obtaining a new passport is also not passed to the authorities of your first/main citizenship.
The government declined the Cyprus Green Party’s proposal to publish the names of foreign investors who got the citizenship by investment. Only 4 officials supported the initiative, while 33 politicians voted against the idea, 1 person abstained.
In the face of these events, the authorities of Cyprus asked other EU jurisdictions for the information regarding this issue. Seven of them do not have the appropriate naturalization schemes. Five countries offering similar schemes do not publish new residents’ names. The remaining six jurisdictions do not hide the candidates’ names.
The government decided to make a choice in favor of the second option and do not reveal the names. Sometimes the country publishes the achievement done under the program. However, it concerns only the statistical data.
Credit rating upgrade
Fitch Ratings improved Cyprus long-term issuer default rating in foreign currency to ВВ+ (it used to be BB). The forecast is positive, with the economy growth rate in 2018 expected to correspond to 3.5%.
According to the announcements of the rating agency representatives, the improvement is connected with the satisfactory dynamics of the country’s economy recovery. This leads to the total public debt reduction. However, the weakened bank system still remains a source of risks to the financial sector and credit profile of Cyprus.
Cyprus real estate prices are steadily growing
In the past several years, there has been observed buying activity growth. Based on the data provided by the Land Registry of Cyprus, in January 2018, the sales rate increased by 64%. Positive dynamics are also observed in the construction sector. The number of new buildings is growing rapidly: from January to October 2017 the government approved 4,817 construction requests. Moreover, the number of housing facilities that developers plan to build has increased almost by 36%.
ACCORDING TO CYSTAT, REAL ESTATE PRICES IN CYPRUS GREW BY 2.7% IN THE FOURTH QUARTER OF 2017. THIS FIGURE IS 2.4% YEAR ON YEAR.
Cyprus guarantees good return of investment from the real estate for rent. In the past 2 years, rental income in Limassol, popular resort in the south of the island, has increased by 25%. It is one of the highest rates recorded throughout the country.
Local real estate agents state that in 2016 a two-bedroom apartment cost about €400 per month, in 2017, a monthly price was €460, and in 2018, one has to pay €500 for such apartment. If we are talking about the property by the sea, add another 30% to the price.
Experts of the Royal Institute of Chartered Surveyors explain this tendency by the difficulties with getting credits to purchase real estate. Despite the economy stabilization (especially after the 2013 crisis), credit criteria are still rather strict. Those who do not possess the amount required for buying a house cannot count on assistance from banks. Consequently, the demand grows, so as rental rates.
Tax preferences for real estate owners
According to the new draft law submitted for the consideration of Parliament, the buyer will be able to pay only 5% VAT of the land value instead of 19%. This initiative is connected with the 2017 law imposing 19% VAT rate on the construction land.
Those purchasing a completed apartment or a house for the main place of living, must pay 5% VAT. At the same time, one will have to pay 19% when buying the construction land. The new draft law provides for the elimination of such unfair conditions. Moreover, it is also planned that if family couples purchase the land occupied by the landowner and pay the full VAT rate, 14% are to be returned to them as a grant. So they will eventually pay the minimum 5% rate.
‘Golden age’ of Cyprus tourism
It is reasonable to invest in Cyprus business or resort real estate. But why so? Firstly, it is a step towards getting a second citizenship. Secondly, international tourism is on the rise in Cyprus.
So, if in 2014, the country was visited by 2,414,000 tourists, in 2015, the figure was 2,659,000, in 2016 — 3,186,000 and in 2017 — 3,652,000. The Chairman of the Cyprus Tourism Organisation Board of Directors, Angelos Loizou, says Cyprus is expecting 4,000,000 tourists to visit the country in 2018. The World Tourism Organization states that the tourist flow increase in 2016 turned out twice higher than in Spain, Croatia and Malta, four times higher than in Greece and five times higher than in Italy.
Based on the fresh data by the Statistical Service of Cyprus, in January 2018, the revenue from tourism increased by 8.5% year on year. The income corresponded to €38,400,000. Compare it with the January 2017 figures: the revenue totaled €35,400,000. Cost per person in the first month of 2018 decreased by 10.4% in comparison with the same period of the previous year — from €565.48 to €506.49.
A significant decline in expenditure for one person in January 2018 was recorded among the UK tourists: the figure has decreased by 20.1% (from €727.29 in January 2017 to €581.029 in January 2018).
However, positive dynamics in terms of tourist sector development are not observed in every region of the island. In order to fully unleash the country’s recreational potential, the Government of Cyprus plans to introduce several infrastructure objects. The officials want to ‘rejuvenate’ Troodos and attract more tourists.
As of today, 13 hotels are being constructed in Cyprus. Sixty more hotels have just been reopened or will soon be reopened after modernization.
Getting a second citizenship is a well-developed trend among the rich and famous. The passport of Cyprus can be issued within a 6-month period not only for a main investor but also for their family members. The status is issued once and for a lifetime and is further inherited.
Interested in more detailed information about Cyprus citizenship by investment program? Contact us!
- We offer free consultations, understanding how important it is for the client to make the only correct decision.
- We work only in the field of investment immigration, integrating gained experience into the investor’s goal.
- We work only with official programs of the European Union and Caribbean countries.
- Before signing the contract, we inform our clients about all additional fees and expenses.
- We conduct a screening to assess the investor’s chances of obtaining the desired citizenship.
- We oversee the process at each stage and work exclusively towards the result.
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