Cyprus citizenship by investment in 2020: discontinued investments will be subject to investigation

The Cypriot Ministry of Finance demands proof that the individuals who obtained citizenship by investment in Cyprus between 2013 and 2018 have kept their investment obligations during the required period of five years. The new immigrants have time until February 15, 2020 to supply such proof to the immigration service providers that they hired to establish citizenship in the country.

In January last year, the European Commission issued a warning to several EU member states including Cyprus concerning their “passport sales” programs. The Commission stressed that the provision of passports and residence cards to foreigners in exchange for money can help criminal groups make a way into Europe and thus increase the risk of money laundering, corruption, and tax evasion occurrences.

One month later, the Cypriot Government introduced several changes to the “citizenship by investment” program to make it more secure. Last October the Government also announced re-inspection of the applicants who had obtained their passports before the rules were hardened.  

In the first days of 2020, the word came out that the Cypriot authorities were going to tighten the screws on investor citizens even further. Licensed immigration service providers spread the news. (A physical person cannot apply for Cypriot citizenship by him or herself but has to use the services of an authorized agent.)  

In an official letter titled “Check on the retention of investments and/ or the permanent residence of persons naturalized under the Cyprus Investment Program” that was sent out in December 5, 2019, the Ministry of Finance asks the immigration agents to supply the following documents “as soon as possible but not later than December 31”:

• A certificate signed by the project architect that describes the state of the construction project that the immigrant has invested money in to acquire permanent residency in Cyprus. (For instance, the citizenship by investment program allows purchasing a residential estate that is worth half a million euros or more. But this estate shall remain in the investor’s possession for life.);
• A confirmation by the project architect that the property pieces that the investor bought for acquiring a temporary or a permanent residence permit have been fully constructed and transferred to the investor or his/ her company to be their property;
• A confirmation from the Registrar that the investor has retained the ownership share of the company that he or she bought for the required period of three years after the Cyprus citizenship was granted to him or her;
• If the investments were made into purchasing an existing company in Cyprus, or into purchasing shares of such company, or registering a new company in the country, a licensed accounting firm has to confirm that the initial investment plan has been fulfilled;
• A recent copy of the property inspection certificate that confirms that the ownership is preserved of the property pieces that the investor purchased in order to acquire Cyprus citizenship.

On December 12, 2019, the Finance Ministry announced an extension of the document submission deadline due to the Christmas and New Year holidays:  

“As several addressees have claimed belated receipt of the informational letter and taking into account the winter holidays, the Ministry of Finance will extend the deadline for the submission of the required confirmation documents to February 15, 2020”.

At the end of last year, three independent international audit and detective firms were hired to conduct the inspection of migrant investors’ affairs. With their help, the Government of Cyprus performed retroactive inspection of the immigrants who obtained citizenship between 2013 and 2018. The inspection was aimed at lessening the consequences of issuing passports to investors who might have appeared unreliable individuals. The Government officials admitted, however, that the inspection procedures did not quite conform to the international standards.  

Under the pressure of the EU authorities, between 2017 and 2019, the Cypriot Government made some amendments in the “citizenship by investment” program to make it more comprehensive and also to lessen the EU concerns about this immigration scheme.

One of the essential amendments is the restriction of the number of immigration applications that can be approved within one calendar year. The annual limit was set to seven hundred individual and collective applications. The regulation was put into effect at the beginning of last year.  

It should be noted that according to insider information, this limit was already reached by the month of October in 2019. The Cypriot authorities have also created a formal register of authorized immigration agents, introduced licensing regulations for such companies, and formalized the accreditation procedures.

In October 2019, the news also came out that Cambodia prime minister’s friends and relatives (that is, Politically Exposed Persons or PEPs) as well as the run-away billionaire Jho Low had obtained Cypriot passports in exchange for investment. This scandal has made the island authorities treat the “citizenship for investment” program with much more care and eliminate all its drawbacks that has led to serious undesirable consequences in the past.

If you would like to receive quick answers to your questions about acquiring legal residency, citizenship, and a passport of Cyprus, please contact us via [email protected]. We will be happy to assist you in this endeavor.