In summary, the significant changes are as per below:
• The requirement to maintain a €30,000 deposit in a Cypriot Financial Institution (Bank) has been withdrawn.

• In addition to residential properties, commercial properties (new and resale) are also eligible for applying through the Cyprus Permanent Investment Scheme.
• Applicants can invest in real estate properties, in other types of real estate units (i.e., offices, shops, hotels, etc.), the share capital of a Cyprus Company, and share Cyprus Collective Investment Funds (type A.I.F., AIFLNP, RAIF).

1. LEGAL FRAMEWORK

1.1 According to the provisions of Regulation 6 (2) of the Aliens and Immigration Regulations, the Minister of Interior, having notified the Council of Ministers, has decided to issue an Immigration Permit Permit to third-country applicants in cases where the following conditions are satisfied.

1.2 The applicant must meet one of the investment criteria mentioned in Section 2.1 and Section 3, quality criteria. All the investors’ funds must provide payment proof that they have been transferred to Cyprus from abroad.

2. INVESTMENT CRITERIA

2.1 The applicant must proceed with an investment of at least €300,000 in one of the following investment categories:

(A) Investment in a house/apartment:

Purchase of a NEW residential real estate property (house or apartment) from a developer company of at least €300,000 (plus V.A.T.).

(B) Investment in real estate units (excluding houses/apartments):

Purchase of other types of real estate units such as offices, shops, hotels, or similar developments or a combination of the above with a total value of at least €300,000 (plus V.A.T. when applicable). These properties can also be resale.

(C) Investment in the share capital of a Cyprus Company with activities and personnel in the Republic of Cyprus:

Investment of a total value of €300,000 in the Share Capital of a company registered in the Republic of Cyprus. The company should be based and operates in the Republic of Cyprus with a proven physical presence in Cyprus and should employ at least five (5) persons.

(D) Investment in Shares of Cyprus Collective Investment Funds (type A.I.F., AIFLNP, RAIF):

Investment worth €300,000 in shares of Cyprus Collective Investment Funds.

If for any reason there is an alienation between the investment and the Permanent Residency Permit, then the cancelation procedure of the Permit will be activated, based on the provisions of the Aliens and Immigration Regulations (Regulation 6).

To avoid the Permit’s cancellation, the investor should have a direct replacement investment of the same or greater value that meets the present procedures’ conditions.

2.2 In addition to the investment under Section 2.1, applicants must be able to prove that they have at their disposal a secure annual income of at least €30,000. Suppose the applicants wish to add additional dependents in their application; then their annual income should increase by €5,000 for each dependent family member and €8,000 for each dependent parent (of the same and/or spouse).

In the case of applicants’ investments under category Section 2.1 (A), the income should derive from abroad from employee salaries, pensions, dividends on shares, fixed deposits, rents, etc.

Note: When calculating the applicant’s total income, the applicant’s spouse’s income can also be considered.

In the cases where the applicants choose to invest as Sections 2.1. (B), 2.1. (C) or 2.1. (D), their total income or part of it may also derive from activity sources within the Republic of Cyprus.

3. QUALITY CRITERIA

3.1 The applicant and his / her spouse must submit a certificate of no criminal record from their country of residence or the Republic of Cyprus in the case they already reside in Cyprus. Additionally, in general, applicants must not pose in any way a threat to public order or public security or be under investigation for criminal offenses attested by relevant authorities of the residence country.

3.2 The applicants and their spouse should certify that they do not intend to work in the Republic of Cyprus, with the exception of their employment as Directors in a Company in which they have chosen to invest under the provisions of this policy.

3.3 In cases where the investment does not concern the company’s share capital, the applicant and/or his/her spouse may be shareholders in Companies registered in Cyprus. The dividend income in such companies may not be considered an obstacle to obtaining the Permanent Residency Permit. They may also hold the position of Director in such companies, with the term of not receiving any payment for their duties.

3.4 In cases where the applicants choose to invest as Sections 2.1. (B), 2.1. (C) or 2.1. (D), they must present information about their residence place in the Republic of Cyprus (e.g., a real estate title deed, purchase agreement, tenancy agreement).

4. LEGAL DOCUMENTS

4.1 Investing in a house/apartment or other real estate units:

The applicants should submit, with their application, the title deed or a contract of sale stating their names and/or their spouse’s names. The submitted documents should be the ones that have been officially deposited to the Department of Lands and Surveys for a dwelling or other building, having a total market value of at least €300.000 (V.A.T. is not included therein). Also, the applicants should submit the official receipts for the payment of at least €200.000 (excluding V.A.T.), irrespective of the date of the dwelling delivery. It should be stressed that the total amount of the dwelling value should be settled in an account in a financial institution in Cyprus.

It is understood that when submitting the application, the provided proofs must support that the investment funds derived from abroad, are not a product of domestic borrowing (remittances, foreign card payments receipts, bank certificates), and they are linked to the corresponding investment. The rest of the investment value will have to be repaid to the seller’s account at a Cyprus Financial Institution.

Furthermore, the real estate unit’s purchase is accepted even when it is submitted by a legal entity, in which the applicants and/or their spouse are the sole shareholders or the final beneficiaries. Also, the legal entity should be established in the Republic of Cyprus or another Member State of the European Union or European Economic Area.
Concerning the purchase of a house/apartment, reference to paragraph 2, it is specified that:

(a) The applicants may purchase up to two (2) housing units (apartments or houses), provided that the total market value meets the provisions of Section 4.1. In the case of a couple, the above condition applies to the couple as a whole.

(b) The said purchase should be related to dwellings sold by a development company for the first time to the buyer unless the dwellings’ purchase took place before 07/05/2013. Contracts of Sale associated with the resale of houses and submitted to the Land Registry before 07/05/2013 (the date of submission of the contract of sale should be confirmed by the Department of Land and Surveys) will be accepted for policy purposes.

It is important to note that the properties are not obliged to be purchased from the same developer company.

4.2 Investment in the share capital of a Cyprus Company with business activities and employees in Cyprus:

For the purpose of policy implementation, the applicants are required to make a total investment of €300,000; the company should have a physical presence in the Republic of Cyprus and employment of at least five (5) persons. In this case, the following documents should be submitted:

• Share Purchase Agreement
• Shareholder Certificate and Company Registration Certificate from the Registrar of Companies and Official Recipient
• Business Profile of the company that includes business goals etc.
• Proof of Payment (e.g., bank transfer)
• Employment proofs from the Department of Social Insurance, for the employees of the company

4.3 Investment in shares of the Cyprus Investment Organization of Collective Investments (type A.I.F., AIFLNP, RAIF):

For the purposes of this policy, the applicants are required to submit a total investment of €300,000 in investment shares along with the following documentations:

• Securities or other confirmations for the units purchased
• Proof of Payment (e.g., bank transfer)
• Confirmation from the Cyprus Securities and Exchange Commission for the establishment of the Fund
• Memorandum of the Fund or Investment Plan

5. DEPENDENT APPLICANTS

5.1 The Permanent Residency Permit is issued to the applicant. The Permanent Residency Permit includes the applicant’s dependents, the spouse, and minor children, up to 18 years old.

If the applicant and spouse wish, it is possible to issue two separate Permanent Residency Permits in each of the couple’s names without the second’s obligation to meet the above criteria. In that case, the applicant and spouse should submit a separate application and pay the corresponding fees.

It is essential to mention that if the Permanent Residency Permit granted to the investor is canceled for any reason, then a cancellation activation process will apply to the Permanent Residency Permit all parties included, based on the provisions of Regulation 6 of the Aliens and Immigration Regulations.

5.2 Unmarried children between 18 and 25 years old can submit separate applications for a Permanent Residency Permit by paying the corresponding fee. They are eligible to apply only when they prove that they are students studying abroad in a higher education institution on the date of application and are financially dependent on the applicant. In such a case, the father or mother and/or both parents together must present an additional annual income of €5,000 for each dependent child.

Suppose the children are students of a Higher Education Institution in the Republic of Cyprus, in that case, they must apply for a temporary residence permit in the Republic of Cyprus, as students under the relevant legislation (E.U. Directive).

After completing their studies in Cyprus, they can submit their own application for a Permanent Residency Permit, as mentioned above, with the corresponding fee’s payment, regardless of their age, provided that the parents will present an additional annual income of €5,000.

This Permanent Residency Permit will continue to be valid after reaching the age of 25 even if the child is still not single and/or a student and/or financially dependent on his or her parents. Under this provision, they cannot include their spouse and their minor dependents in the existing Permanent Residency Permit. In addition, if the Permanent Residence Permit of the investor/parent is canceled for any reason, the cancellation process will be activated and on the Permanent Residency Permit of the child, based on the provisions of Regulation 6 of the Aliens and Immigration Regulations.

5.3 A Permanent Residency Permit can also be granted to the applicant’s parents and their spouse by submitting separate applications for each parent and paying the corresponding fee. In that case, the applicant should present an additional annual income of €8,000 for each dependent parent. In this type of Permanent Residency Permit application, parents cannot include their dependents, i.e., spouse and minor children.

In addition, if the Permanent Residence Permit of the investor/child is canceled for any reason, the cancellation process will be activated and on the Permanent Residency Permit of the child, based on the provisions of Regulation 6 of the Aliens and Immigration Regulations.

6. HIGHER INVESTMENT VALUE FOR INCLUDING ADULT CHILDREN

A Permanent Residency Permit may also include adult children of the applicant, who are not financially dependent, if the total value of the applicant investment is of a higher value according to the provisions of Paragraph 2, as set out below:

The market value of the €300,000 investment should be multiplied by the number of adult children who will invoke the same investment to obtain the Permanent Residency Permit. For example, if the applicant wishes to include in his Permanent Residency Permin an adult child, he/she should invest €600,000. If he has two adult children, the investment value should amount to €900,000, etc.

If the investment is according to the provisions of Sections 2.1. (A) and 2.1. (B), of purchasing real estate property units, the applicant, together with the application, should provide payment proof of at least 66% of the property market value.

In such a case, each adult child should prove that they have at their disposal a secured annual income of at least €30,000, which increases by €5,000 for each dependent, as provided in Section 2.2. Also, the investment can be made jointly in the name of the applicant and the adult child or exclusively in the applicant’s name.

7. TIME FRAME

If all the criteria of this policy are met, and there are no reasons concerning either the applicant’s criminal record or reasons of public order and public security, the application will be forwarded for consideration and decision by the Minister of Interior.

It is estimated that the application’s examination period from the completed application submission date will be approximately two (2) months.

8. OTHER INFORMATION

Persons who acquired the Permanent Residency Permit must obtain permanent residence in the Republic of Cyprus within one (1) year from the date of the submitted application approval, while the family members and applicants should not remain outside the Republic of Cyprus for a period of two (2) years. Otherwise, the Permanent Residency Permit ceases to be valid under Regulation 6 (3) and/or maybe revoked under Regulation 6 (4).

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What are investors’ main objectives?

What do investors examine before proceeding with the investment?

What are the best investments in Cyprus?

The list of questions is endless and the answers always vary, depending on the uniqueness of each case. Investments, as a concept, refer to any activity that intends to exploit new opportunities with the sole purpose of capital increase.

So, when an investment is materialized, the outcome should result in profit and capital increase, otherwise it is considered as spending. Consequently, investors seek a return on their capital, either on a long-term basis or as traders on a short-term basis.

The combinations of opportunities and options in the international market are limitless and no-one can list them all, per se, since they differ considerably.

My experience as a lawyer and CEO of the international law firm Chambersfield Economides Kranos has helped me identify many and varied promising investment opportunities in Cyprus. Before naming and analyzing them, I would like to mention a tendency that I have come across in the past few years, usually observed among young investors/entrepreneurs.  It is usually referred to as “analysis paralysis” and describes the way investors tend to over-think and over-analyze an investment opportunity, resulting in them taking no action. This is quite often found among start-ups, which are themselves considered high-risk investments. In their attempt to minimize their risks, start-up entrepreneurs over-analyze their options, resulting in an idea that is never realized.

Despite this, I must also say that, in the past few years, Cyprus has accomplished the impossible and is, in my opinion, among the ‘fighters’ of our era, earning the respect of the international market. After the financial and banking crises in 2013, the bailout programme agreed between the Government and the Troika (the European Commission, the European Central Bank and the International Monetary Fund), the downgrading to “junk” status by the credit rating agencies and the implementation of the AML Directives, Cyprus has managed to rise up and thrive once more, earning a place among the most dynamic and stable business centres in the world, with a growing economy that attracts international investments. Cyprus, as a European Union member state and a business hub, offers various investment opportunities.

Below, I identify some of these, from both traditional and emerging industries.

Top Three Traditional Cyprus Investments

1 Real Estate

The Real Estate industry is again thriving in Cyprus. The Cyprus Investment Programme is a significant booster which, when successfully implemented, encourages foreign direct investment (FDI) and attracts High Net Worth Individuals to settle and conduct their business activities in Cyprus. Today, there are numerous attractive opportunities in real estate, both commercial and residential units, all over Cyprus that promise a relatively secure initial capital investment, an excellent Return on Investment (ROI) and capital appreciation.

2 Tourism

According to the World Data Atlas, “In 2017, the contribution of travel and tourism to GDP for Cyprus was 22.3 %.” Moreover, Deputy Minister of Tourism Savvas Perdios has stated that “the tourism industry has the long-term potential to contribute to Cyprus’s economy by 25%.” Tourism is one of the strongest industries in the Cyprus economy and it is continuously increasing its competitiveness, through new developments and strategies. Therefore, investments on this sector are considered premium, especially when investors target large-scale projects such as the construction of marinas, luxury resorts, etc.

3 Shipping

Cyprus is renowned for its high-quality maritime services, as well as for its reliable operational infrastructure and appealing legal framework. As a result, Cyprus is the third largest ship management jurisdiction in the EU and possesses a large merchant fleet market share on a worldwide basis. An investment in this industry, through the establishment of a Cyprus entity, is considered very promising since services, registration fees and taxes are very competitive, compared to other EU member states. Additionally, it is worth noting Cyprus’ EU-approved Tonnage Tax System, which is a major advantage that should be taken into consideration by investors.

Top Three Emerging Cyprus Investments

1 StartUps

In the last few years there has been a substantial increase in the number of startups in Cyprus. The highly educated workforce and eligible human capital, incentives provided by the government (e.g. the startup visa regime), as well as the straightforward legislative incorporation framework and attractive tax system are just some of the main factors that have contributed to the startup sector’s growth. Major players in the field of technology have proven that Cyprus is a very favourable jurisdiction for startups, since, after their establishment in Cyprus, they have successfully run multi-million international businesses.

2 Investment Funds

Investment funds represent the new emerging market that Cyprus is seeking to expand and, to this end, it is continuously upgrading its regulatory and legislative framework in order to attract foreign direct investment and has already formed various Alternative Investment Funds (AIFs) and Undertakings for the Collective Investment in Transferable Securities (UCITS). Of course, this target would have been unreachable if the professional services sector was not so strong and well-educated to support this expansion. In my opinion, investors should take a closer look at Cyprus Investment Funds opportunities, since a lot of effort and support is being provided by the legislator and other supervisory authorities.

3 Energy

The discovery of hydrocarbons marked the start of a very promising new era for Cyprus in the energy industry. Energy giants have since approached Cyprus and formed strategical alliances, upgrading the jurisdiction to that of a developing oil and gas hub for the region. Of course, from the energy industry we should not omit the growth in renewable energy that Cyprus has experienced over the past few years, mainly in the areas of wind power and solar energy. I personally advise professional investors to monitor activities in the country’s energy industry very closely, since it holds great promise and enormous future potential for development and expansion. Cyprus is a country that has a lot of investment opportunities to offer. Potential investors are therefore advised to establish cooperation with law firms that can consult and assist them in selecting the best possible combinations of investment, determining risk tolerances and the capital required to achieve a successful portfolio allocation.

Info: Michalis Economides is CEO, Advocate & Legal Consultant, Chambersfield Economides Kranos Law Firm.

The post Investment opportunities in a thriving jurisdiction appeared first on Chambersfield Economides Kranos.

The questions’ list is endless, and the answers always vary depending on the uniqueness of each case.

Investments, as a concept, refer to any activity that intends to exploit new opportunities with the sole purpose of capital increase. So, when an investment is materialized, the outcome should result in profit and capital increase, otherwise is considered as a spending.

Consequently, it is a fact that investors seek a return on their capital, either on a long-term basis, or as traders, on a short-term basis.

The combinations of opportunities and options in the international market are limitless and no-one can list them, per se, since they differ considerably.

My experience as a lawyer and CEO of the international law firm Chambersfield Economides Kranos, helped me identify that there are many promising investment opportunities of various types in Cyprus.

In the past few years, Cyprus accomplished the impossible. Cyprus earned the bet and the respect of the international market, and, in my opinion, is among the “fighters” of our era.

Considering that after the financial crash crisis of the banking system in 2013, the Bailout program, signed by the Cyprus Government with the European Commission – the European Central Bank (ECB) and the International Monetary Fund (IMF), the downgrade to “junk” creditworthiness and the implementation of the AML directives, Cyprus managed to rise back up, thrive and earned its place among the most dynamic and stable business centers of the world, with a growing economy that attracts international investments. Therefore, Cyprus as a European state member and a business hub, offers various investment opportunities to investors.

If I could identify some, I would select investments from traditional and emerging industries.

Top Cyprus Traditional Investments

• Real Estate Industry

The Real Estate industry is thriving in Cyprus. The Cyprus Investment program is a significant booster which, when successfully implemented, encourages foreign direct investments (FDI) and attracts high net worth individuals (HNWI) to settle and conduct their business activities in Cyprus.

Nowadays, there are numerous attractive opportunities in real estate, both commercial and residential units, all over Cyprus that promise a relatively secure initial capital investment, an excellent Return on Investment (ROI) and capital appreciation.

• Tourism Industry

According to the world data atlas tourism “In 2018, the contribution of travel and tourism to GDP (% of GDP) for Cyprus was 21.9 %.” In terms of the tourism industry potentials, the Tourism Deputy Minister Mr. Savvas Perdios, stated that “the tourism industry has the long-term potential to contribute to Cyprus’s economy by 25%.”

This particular industry is one of the strongest industries of Cyprus economy and it is continuously elevating its competitiveness, through further developments and strategies. Therefore, investments on this sector are considered to be premium, especially when investors target large scale projects such as the construction of marinas, luxury resorts etc.

• Shipping Industry

Cyprus is renowned for its high-quality maritime services, as well as, its reliable operational infrastructure and appealing legal framework.

It is noteworthy to mention that Cyprus is the third largest ship management jurisdiction in EU and possesses a large merchant fleet market share, on a worldwide basis.

An investment in this industry, through the establishment of a Cyprus entity, is considered to be very promising since the services, registration fees and taxes are very competitive, compared to other EU member states.

Additionally, it is important to mention that Cyprus uses an EU – approved Tonnage Tax System (TTS), a major advantage that should be taken into consideration, from the investors’ perspective.

Top Cyprus Emerging Investments

• StartUps

In the last few years there is a substantial increase of StartUps in Cyprus. The high percentage of educated workforce and eligible human capital, the incentives given by the government i.e. startup visa regime, as well as, the straightforward legislative incorporation framework and attractive tax system, are some of the main factors that contributed to the startup’s sector growth.

Major players in the field of technology have proven that Cyprus is a very favorable jurisdiction for startups, since, after their establishment in Cyprus they run their international multi-million businesses successfully.

• Investment Funds Industry

Investment funds is the new emerging market that Cyprus seeks to expand.

Cyprus is continuously upgrading its regulatory and legislative framework in order to attract foreign direct investments (FDI) and it has already formed various Alternative Investment Funds (AIFs) and Undertakings for the Collective Investment in Transferable Securities (UCITS). Of course, this target would have been unreachable if the professional service provider sector was not so strong and well-educated to support this expansion.

In my opinion, investors should take a closer look on Cyprus Investment Funds opportunities, since a lot of effort and support is being put by the legislator and supervised authorities.

• Energy Industry

The discovery of hydrocarbons was the starting point of a very promising era for the energy industry in Cyprus. Energy giants approached Cyprus and formed strategical alliances that upgraded the jurisdiction to a developing oil and gas hub of the surrounding area.

Of course, from the energy industry we should not omit the growth that Cyprus had in the past few years in renewable energy, which mainly focuses on the wind and sun energy.

Personally, I advise professional investors to monitor the overall activities of the energy industry in Cyprus very closely, since it holds enormous and very promising future potentials for development and expansion.

In conclusion, Cyprus is a country that has a lot of investment opportunities to offer.

Therefore, investors are advised to establish cooperation with law firms that can consult and assist them on selecting the best possible combinations of investment, by determining the risk tolerances and necessary capital for achieving a profound portfolio allocation.

The post Cyprus – A European Investment Hub worth looking at! appeared first on Chambersfield Economides Kranos.