Is the programme just another tool for promoting real estate?
We literally live in a world on the move. People choose to migrate to other countries in pursuit of better opportunities for themselves and their families, both in terms of career advancement and better lifestyles. Others are forced to migrate to escape from dangerous and unsafe environments. Others, a bit more fortunate, choose to invest their way into a new residency and take advantage of the benefits the hosting countries have to offer.
According to the United Nations Department of Economic and Social Affairs Division (UN DESA), Europe continues to host the largest number of migrants in the world. It would be interesting to know whether Cyprus has contributed significantly to that number. A quick search on Google for the most successful PR pathways in the world, will reveal that Cyprus often comes up in top 10 lists of countries with the most attractive permanent residency programmes.
Let us dive into the specifics of the new permanent residency by investment programme. In accordance with Regulation 6(2) of the Aliens and Immigration Regulation, the Ministry of Interior has the authority, having notified the Council of Ministers, to issue an immigration permit to a third country applicant in cases where the said applicant makes an investment that meets the requirements of the policy. Specifically, as per the Regulation an investor must satisfy investment and quality criteria. In terms of the investment criteria the applicant has four options:
- Investment in a house or apartment: purchase of a house or an apartment from a development company worth at least €300.000,00 (plus VAT). It is imperative that in this category the sale must not have derived from a resale property. Furthermore, the applicant may purchase up to two housing units (apartments or houses), provided that the total market value is equal to or higher than €300.000,00 (plus VAT) but there is no necessity that these two properties are from the same development company.
- Investment in real estate (other than a house or apartment): purchase of offices, shops, hotels or another type of real estate, or a combination of those, with a total purchase price of €300.000 and in this category the investment can result from resales.
- Investment in the share capital of a Cyprus-based company with business activity: an investment of a minimum of €300.000 in the share capital of a company, which must be based and operating in Cyprus and must employ at least five people.
- Investment in units of Cyprus Investment Organisation of Collective Investments (forms of AIF, AIFLNP, RAIF): an investment of a minimum of €300.000 in units of a Cyprus Investment Organisation Collective Investment, the investments of which must be held in Cyprus.
In addition to the above investment, the applicant must be in a position to prove that they have at their disposal secure annual income of at least €50.000 and this income requirement increases by €15.000 for a spouse and by €10.000 for each of their minor children. It is important to note that the income should originate from abroad and it can comprise of salaries, pensions, dividends from shares, bank deposit interest, rents or any other source of income.
Circling back to the quality criteria, they are straightforward and usually similar to the requirements most countries have in place. The quality criteria mostly concern the provision of clean criminal records for the applicant and their spouse, from their country of origin and their country of residence, if this is different.
Furthermore, the applicant and dependent members of family must obtain a health insurance policy covering inpatient and outpatient care.
Permanent residency by investment differs from other types of residency exactly because of the focus on the investment the applicant makes in Cyprus and for this reason the applicant and his/her spouse must confirm that they do not intend to undertake any form of employment in the Republic. Notwithstanding the prohibition of working in Cyprus, the programme under discussion allows the investor to maintain other business in Cyprus and receive a dividend and that is considered an important attribute of the programme.
It is clear, from the criteria, that this programme heavily promotes investments in the real estate industry, considering that two out of the four options available for investment concern the purchase of residential or commercial properties. While the promotion of real estate is evident, the benefits that the country enjoys from the programme are not limited to the real estate industry. The investment criteria clearly promote attractive foreign investments in Cyprus, supporting local businesses and supporting regional development.
Thee permanent residency by investment permit is not just a tool for promoting real estate. It is not by accident that Cyprus is known to offer one of the most attractive permanent residency opportunities, especially among European countries. The permanent residency permit, under category 6(2) allows its holders to enjoy greater mobility within the EU, ultimately enhancing the flow of business opportunities.
Evi Pilavaki is the Chief Legal Officer at bbf:, with a long, proven record in the legal profession and extensive knowledge in real estate and investment deals.
Pilavaki holds a rich educational background, including a Bachelor of Law (LLB) and a Master’s Degree (MA) in International Criminology from the University of Sheffield.
Most recently, she received her MBA (Master in Business Administration) from the University of Limassol (UOL), formerly known as CIIM.
In her role as the Chief Legal Officer at bbf:, Pilavaki provides invaluable legal consultation to all departments of the bbf: Group. She coordinates with legal representatives in Greece, Portugal, the UK and Canada, where the Group has offices or projects.
Pilavaki is also responsible for reviewing and identifying risks regarding internal and external transactions of the Group and managing the legal aspect of plot acquisition. She deals with investment structures and JVs, as well as reviews all legal documentation related to sales. Leading by example, Pilavaki manages a dedicated team of six professionals, fostering a collaborative and inclusive work environment
Contents of this article including associated images are belongs Cyprus Mail
Views & opinions expressed are those of the author and/or Cyprus Mail
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