In an attempt to encourage foreign investment to the island and boost economic growth, the government authorities have recently announced certain amendments to the provisions of the Permanent Residence Scheme also known as ‘’Fast Track’’ Permanent Residency which became in force on 24th March 2021. As a result of the new amendments, non-EU investors have now available a variety of investment options and can explore more business opportunities while at the same time they can combine those business opportunities with their immigration options.
The most important amendments are the following:
1. Addition of new investment criteria
Although the required amount of the investment remains the same and must emanate from legal sources from abroad, the government authorities increased foreign investment in areas other than merely real estate with the addition of other categories.
In order to qualify, the Applicant must make an investment of at least €300,000 in one of the following categories of investments:
(A) Investment in a house/apartment:
Purchase of a new-first sale house or apartment from a Development company, of at least €300,000 plus VAT (can either be 19% or 5%).
(B) Investment in real estate (excluding houses/apartments):
Purchase of other forms of real estate, such as offices, shops, hotels or similar developments, or a combination of them with a total value of €300,000. Under this category, resales can be accepted.
(C) Investment in the share capital of a Cyprus Company with activities and staff in Cyprus:
An investment worth €300,000 in the share capital of a company registered in Cyprus, which is based and operates in the Republic with business substance and physical presence and employs at least 5 people.
(D) Investment in units of a Cyprus Collective Investment Organization (type AIF, AIFLNP, RAIF):
An investment worth €300,000 in units of a Cyprus Collective Investment Organization.
2. Abolition of the obligation for a fixed deposit
The applicant is no longer obliged to maintain a three-year fixed deposit account with a Cyprus bank of at least €30,000. This requirement is now removed.
3. Provision of a Secure Annual Income
Additionally to the investment, the applicant should be able to show in his disposal a secure annual income of at least €30,000 and such annual income is increased by €5,000 for each dependent spouse and child and €8,000 for each dependent parent of the applicant or parent of the spouse. The annual income can derive from salary, pension, dividends, savings, rentals etc.
In the case where the Applicant invests in a house or apartment under criterion A above then the secure annual income must derive from abroad sources.
In the case where the Applicant invests in criterion B, C, D above then the annual income may derive from legal sources from activities within the Republic of Cyprus.
4. Statement of ‘’No Intention to work in the Republic of Cyprus’’
As before, PR holders are not allowed to engage in any kind of work or business in Cyprus, and for this, they sign a statement of ‘’No intention to work in the Republic of Cyprus’’.
This continues to be the case under the amended regulations, with the exception of employment as Directors in the company that they choose to invest in, provided they do not receive a salary.
However, in cases where the investment does not relate to the share capital of a Company, the applicant and/or the applicant’s spouse may be shareholders in companies registered in Cyprus and the receipt of dividends shall not be considered as an impediment for the purpose of obtaining permanent residency.
5. Dependents of the Main Applicant
The permanent residence permit is issued to the applicant and can include his spouse and dependent children up to the age of 18.
As before, permanent residence can be granted to unmarried children of the applicant who are between the age of 18-25 years old only when at the time of the submission of the application, they provide credible evidence that they are students at higher educational institutions abroad and hence, they are financially dependent on the applicant. In this case, they can submit their own separate application for permanent residency and pay the relevant application fee.
In the case where the children of the applicant who are between the age of 18-25 years old, are students at higher educational institutions in Cyprus, they should apply for a temporary residence permit in Cyprus (pink slip-student visa), and upon completion of their studies, they will be entitled to apply for a permanent residence permit, irrespective of their age, with the condition that the main applicant can show an additional secure annual income of €5,000. The permit will continue to be valid after the age of 25, however, if the children get married their spouse or minor children will not be included in the permanent residence permit.
As before, the parents and/or parents-in-law of the main applicant can be included in the application of permanent residency, provided that the applicant can show in his disposal a secure annual income of €8,000 for each dependent parent and/or parent-in-law. Every such dependent parent, shall submit his own application along with all the supporting documentation and pay the relevant application fee.
6. Higher Value Investment to include adult children who are not financially dependent
Permanent Residency may also be granted to children of the applicant over the age of 18, who are not financially dependent on the applicant, provided that the market value of the investment attributed to each such child is at least €300 000.
In the case where the investment relates to real estate under criterion A and B a payment confirmation for 66% of the market value of the real estate should be submitted with the application. In such an event each adult child must be able to prove a secure annual income of least €30,000 which is increased by €5,000 for each dependent spouse and child and by €8,000 for each parent-in-law.
Such investment can be made solely in the name of the applicant or it can be made jointly in the name of the applicant and the adult child.
7. Clean criminal record
It remains a compulsory requirement that each applicant provide a clean criminal record from his country of origin and residence – if different.
8. Application Process and Examination
The application will be processed by the Civil Registry and Migration Department and provided the criteria of this policy are satisfied and there are no reasons with regard to either the criminal record of the applicant or to public order and public security issues, the application will be examined by the Minister of Interior in a positive manner and an Immigration Permit should be issued.
It is estimated that the examination period will be 2 months from the date of submission of a complete application.
1. On the real estate investment
- Investment in real estate can be made through a company registered in Cyprus or another EU member state and in which the applicant and/or his spouse are the sole shareholders (UBOs)
- When investing under criteria A and B, it continues to be the case that the application for permanent residency can only be submitted after the Vendor (Developer-Owner) gets paid at least €200.000 (plus VAT), with credible evidence of payment to the Vendor’s bank account and proof that the payment derived from funds emanated from abroad.
- When investing under criterion A:
- It is possible to purchase 2 properties for the amount of €300.000 plus VAT provided that they are new and first-time sale. It is no longer compulsory to buy properties from the same development company.
- Contract of Sales contract relating to resale of dwellings, which were deposited in the Land registry before 07/05/2013 will be accepted for the purposes of implementing this policy.
- The property purchased may be bought off-plan which means that it may not be built yet. Typically, in such a case, the purchase price will be paid in instalments according to the construction stages, and when at least €200.000 (plus VAT) are paid to the developer then the applicant can submit his application.
- When investing under criteria B, C, or D, the applicant should present information in relation to his place of residence in Cyprus. (title deed, sales agreement, rental agreement etc.)
- In the event that VAT applies to the chosen investment, the VAT is normally 19% however an application for reduced VAT from 19% to 5% is filed for the first residence of the investor in Cyprus.
3. Education and healthcare.
- Children under 18 that have Permanent Residency can attend public schools for free.
- Permanent Residency holders in Cyprus can register to the General Health Care system known as GESY.
4. Conditions and restrictions
- PR applicants are obliged to acquire a residence in Cyprus within 1 year from the date of the approval of the PR application.
- Holders of the permanent residence permit must visit Cyprus at least once every 2 years. If the holder stays out of Cyprus for a period of over 2 years, the permit is cancelled.