Why is the Cypriot citizenship desired by wealthy GCC residents?
Written by Veronica Cotdemiey, CEO of
Citizenship Invest
Obtaining a
European citizenship has been the goal for many immigrants and worldwide
investors looking for a second nationality. There are a handful of countries in
Europe and worldwide that can grant individuals their citizenship, however, the
application process set by the citizenship law of these countries can be very tiresome,
lengthy, and often requires people to learn the language of the country. For
these reasons and limitations, the country of Cyprus has risen as a star in the
citizenship by investment industry being the most time-effective program within
the European Union. Within a period of 6 months the applicants and families are
able to hold in their hands their European passport and are able to reside
anywhere within the European Union.
Cyprus
enjoys a diverse and stable economy with high potential of growth especially
when gas extraction work starts in 2019. It is classified by the world bank as
a high-income economy thanks to the contribution of the tourism, financial, and
property sector. The country has one of the lowest crime rates in the European
Union with an advanced legal system based on English law. More than 90 percent
of the population of Cyprus speaks English, which explains its popularity as a
tourism and business hub. In June
2017 arrivals of tourists totaled 1.4 million compared to 1.2 million in the
corresponding period of 2016, recording an increase of 16.6% and outnumbering
the total arrivals ever recorded in Cyprus during the first six months of the
year. From a real estate standpoint, and according to data published by the
Department of Land and Surveys, property sales contracts by foreign buyers in
July 2017 amounted to 251 compared to 191 in July 2016, representing an
increase of 31.4%.
The Cypriot
Government has established a number of incentives to attract foreign direct
investment into the country. One of which is the citizenship by investment program.
The scheme stipulated in the citizenship law of the country was introduced in
2013. Since its inception, the program has undergone some changes and refinement
to make it more accessible and alluring for investors. In September 2016, the
Government of Cyprus introduced changes that included the reduction of the
minimum investment amount to EUR 2 million (from EUR 2.5 million). The law also
included the option to add the parents of the main applicant for an additional
EUR 500,000 plus VAT investment in a luxury property in Cyprus.
So what is
driving High-net-worth-individuals to pay such amounts of money for the Cypriot
nationality?
Being an active
part of the European Union and the Eurozone, Cyprus became a major force in the
Citizenship by investment arena. It helped the country attract a big number of
wealthy individuals to invest in its growing luxury real estate market. In
addition to its political affiliation in Europe and internationally, this
Eastern Mediterranean island has an advantageous geographical location placing
it in the center of the Middle East and close to major destinations around the
world.
Cyprus citizenship
also has other benefits that are highly sought-after by wealthy investors coming
from the GCC , Africa, Russia, and other countries in the far east. Cypriot
passport holders will have the ability to travel to major destinations without
applying for a visa. It allows instant travel to over 145 countries including
the UK, UAE, European Union, Canada, Australia among other major countries and
often permits stay for 30 up to 90 days at a time depending on the country.
Cyprus citizens are also permitted to live, work, and study in any country in
the European Union. This gives them the ability to leverage the high standard
of living in many countries in the European Union.
Many business
owners who obtain the Cypriot nationality are also interested in utilizing
double taxation agreements between their home countries and Cyprus. Namely,
because Cyprus offers one of the lowest corporate tax rates in Europe. A
resident with a Cypriot passport is subject to tax under the Cyprus personal
tax regime, which is regarded as one of the most generous tax regimes in
Europe. Non-tax residents are charged to tax only on income generated within
Cyprus, i.e rents, royalties, remuneration or other profits arising from
property situated in Cyprus. Cyprus also does not impose an inheritance tax on
property, which gives the ability to pass it down to future generations without
the burden of paying any tax.
Cyprus
citizenship application process is among the easiest in the world and is open
to all nationalities. The Government of Cyprus presents a clear submission
process, whereby applicants are required to fill a Government citizenship application
form and supply a police clearance report, as well as a birth certificate, and
a legitimate source of funds. Applicants will get a European citizenship in a
period of 6 months without the need to relocate or live in Cyprus at any point
in time.
This omits the need to migrate and disrupt their lives and businesses leaving
them with a European passport for generations to come.
