Naturalization of Investors by Exception Scheme
The Scheme was set up in 2013, and quickly became one of the most prestigious Citizenship by Investment programs in the world due to Cyprus' low tax rates, high quality of life, EU membership and the visa-free or visa-on-arrival access to 173 nations enjoyed by its passport holders.
The scheme has undergone numerous amendments, the most recent being confirmed by the Council of Ministers in February 2019, and which took effect on 15 May 2019.
These include a series of new mandatory donations, additional due diligence measures and an increase in screening conditions, which the government has introduced in order to diversify the impact of the invested capital throughout the economy.
There are four options for investment that investors can choose from as part of the Naturalization Scheme. These are:
A) Purchase or Construction of Real Estate
B) Start or Participate in a Business operating in Cyprus
C) Investment in alternative funds or financial assets of Cyprus
D) Combined Investment in Real Estate, Business and Financial Instruments
Whatever option is chosen, applicants will need to make a minimum combined investment of at least €2,000,000.
Furthermore, all applicants will need to make a purchase of a property to be declared their permanent and primary residence in Cyprus, of a value of at least €500,000. This property can be included as part of an applicant's investment using the Real Estate (A) or Combined Investment (D) options.
Purchase or Establishment or Participation in Cypriot Companies or Businesses- €2,000,000 in the purchase, creation or participation in businesses or companies based and operating in Cyprus. These businesses or companies must have a tangible presence in Cyprus, significant activity and turnover, and employ at least five Cypriot citizens or European citizens (legally and continuously resided in Cyprus during the five years preceding the application submission date).
- A mandatory donation of €75,000 to the Foundation for Research and Innovation, which can be waived if the rest of the investment is directed to a business that has been designated as "Innovative" by the Ministry of Finance.
- A second mandatory donation of €75,000 to the Cyprus Land Development Corporation, to contribute to the government's affordable housing projects and its implementation of other housing plans / measures.
Using the Participation in a Business Investment option also opens the possibility of waving the 1st mandatory non-refundable donation to the Foundation for Research and Innovation, if:
A) The applicant chooses to invest in an innovative business (which has acquired a relevant certificate by the ministry of finance) or in a certified social company (πιστοποιημένη κοινωνική εταιρεία).
B) The mandatory donation can also be waived if at least 20% (€400,000) is invested in a company operating in the primary sector of the economy or in the secondary sector of the economy, or in one of the fields of research and technology, education, health, and renewable energy.
The investment must be made during the three years preceding the date of the application and must retain the said investments for a period of at least five years as from the date of the naturalization.
Investments can be made personally or through a company, of which the applicant participates as a shareholder, in proportion to his or her holding percentage, or of which the applicant is a high-ranking senior manager that generates for the country tax revenues of €100,000 over a three-year period and tax has been paid or pre-paid. Investments can also be made jointly with a spouse.
To be considered for citizenship, you must also own a permanent privately-owned residence in Cyprus, the purchase price of which must be at least €500.000, plus V.A.T.
Members of the same family, who apply separately as investors can collectively acquire a residence, provided that the total value of this home-property covers the amount of €500,000 per each applicant. If the purchased property value exceeds the amount of €500,000, this additional amount can be used for purposes of supplementing the total amount of the qualifying investments explained above.
Prior to your naturalization as a Cypriot citizen, you must hold a residence permit in Cyprus for at least 6 months. If you do not hold a residence permit, you may apply for an immigration permit based on Regulation 6 (2) of the Aliens and Immigration Law, simultaneously with the application for naturalization. If the naturalization is rejected, the immigration permit will be canceled immediately.
A spouse may apply for citizenship simultaneously for no additional amount.
Minor children may apply after the investor has acquired the citizenship.
Adult children (students up to the age of 28 that are attending an institution of higher education or children with severe physical or mental disability) may apply after the investor has acquired the citizenship.
Parents may apply for citizenship after the investor has acquired the citizenship, provided that they own a permanent privately-owned residence in the country, the purchase price of which must be at least €500.000, plus V.A.T.
Investors and parents may collectively purchase a residence, provided that the total value of the property is at least €1,000,000 plus V.A.T.
For individual applicants
- Residence Permit (explained above).
- Residence Purchase (explained above).
- Schengen Visa
- Not to be included in the list of persons whose assets, within the boundaries of the European Union, have been frozen as the result of sanctions.
- Good health
- Clean criminal record
- Not to be likely to cause disrepute to Cyprus.
- Not to have been denied a visa to a country where Cyprus has visa-free access.
- Not to have been denied citizenship in any other Member State of The European Union.
- Not to be a potential national security threat.
- Possess real estate, land development and infrastructure projects' Contract of Sale.
- Title Deeds or Proof of Registration of the contract with the Lands and Surveys Department.
- Proof of payment of the agreed purchase price.
- Copy of the wire transfer to a Cypriot commercial banking institution in the name of the seller or the seller’s company.
- An evaluation certificate from an independent registered land surveyor, if required by the Ministry of Interior or the Ministry of Finance.
- Two concurrently-running daily ads in a local newspaper stating intention to apply for citizenship.
Documents regarding investment through a company (if applicable)
- Certificate of Registration of the company/companies by the Registrar of Companies.
- Certificate of shareholders by the Registrar of Companies or certificates evidencing that the applicant is the beneficiary owner of the company/ companies.
- Audited accounts of the company (or companies) for the last three years preceding the year of the application.
- If the applicant is a high-ranking senior manager, the submission of the employment contract and the receipt from the Department of Inland Revenue are additionally required.
No nationality is officially restricted
Dual citizenship is recognized in Cyprus. You are not required to renounce your previous nationality to become a citizen of Cyprus.
- Contract of Sale of Real Estate
- Title Deeds or Proof of Registration of Real Estate
- Proof of Payment of Real Estate
- Copy of the wire transfer of Real Estate purchase
- Evaluation certificate from a registered land surveyor
- Original Police Clearance Certificate
- Original or Certified copy of Birth Certificate (if applicable)
- Certified copy of passport
- Original or Certified copy of Marriage Certificate (if applicable)
- Copies of advertisements in a daily newspaper two consecutive posts
- Two passport-size photos
- Curriculum Vitae
- Certificate of the registrar of companies (if applicable)
- Certificate of shareholders by the Registrar of Companies (if applicable)
- Audited accounts of the company (3 years) (if applicable)
- Employment contract (if applicable)
- Medical Certificate
- Photograph and Signature Certificate
- Statement of Source of Funds
- Proof of payment of nonrefundable processing and due diligence fees
- Proof of Payment of Business Purchase
- Certified copy of Business License or Incorporation documents
- Copy of wire transfer for Business Purchase
- Investment Plan
- Employment contracts of Cypriot citizens
- Confirmation from the Social Insurance regarding employees
- dual citizenship Yes
- Family members included Yes
- land ownership Yes
- Physical residence required No
- Personal visit required Yes
- Language skills required No
- Interview required No
- Investment Single €2,000,000
- Investment Family 4 €2,000,000
- Minimum annual income -
- Time to citizenship 6
- Time to permanent residency 1
- Visa-free countries 175
- Financing available No
Its official languages are Greek and Turkish, although English is widely spoken too. Since 2008, its official currency is the Euro (EUR).
Cyprus boasts a high standard of living, plenty of good quality schools and universities, low crime rates, low taxes and exceptional weather all year round, making it a prime choice for families, business people and retirees.
Visa Free Travel
Cyprus has one of the most attractive onshore tax regimes in the EU, and is considered a prime location for business relocation.
Becoming a Cypriot citizen does not make you liable to any kind of taxes. To be a Cypriot tax resident you must spend more than 183 days a year in the country.
Tax residents in Cyprus are subject to personal income tax on their worldwide income. Rates are progressive up to 35% for annual income in excess of €60,000. Capital gains, other than those relating to Cyprus-located immovable property, are tax-exempt. Rental income is subject to tax at standard rates, although 20% of the gross rental income for rental of buildings is tax exempt.
Dividend and interest income are not subject to personal income tax, although individuals both residents and domiciled in Cyprus for tax purposes are subject to the Special Defence Contribution (SDC), which taxes dividends at a flat rate of 17% and interest at 30%. SDC also taxes rental income at an effective 2.25% tax rate.
Profits from disposals of shares, bonds, debentures, founders’ shares, and other titles of companies or other legal persons incorporated in Cyprus or abroad and options thereon, are unconditionally exempt from income tax.
Capital Gains accrued by individuals on the disposal of immovable property are subject to a capital gains tax of 20%. A minimum exempted applies to capital gains from the disposal of private residence, agricultural land by a farmer, gifts between spouses, children and third degree relatives, family companies, gifts to charities, exchange of properties, among others. Capital Gains from the disposal of shares in companies that own Cyprus-situated immovable property, when at least 50% of market value of the shares derives from immovable property, are subject to capital gains tax.
The standard VAT rate in Cyprus is 19%. Reduced rates of 9% and 5% apply to certain goods and services.
There are no net wealth, inheritance and estate duties in Cyprus. There is a stamp duty on all documents related to property.
On corporate taxation, Cyprus has one of the lowest tax rates in the European Union. Resident companies are taxed on their worldwide income at a corporate tax rate of 12.5%.
Dividends received are usually not subject to taxation. Capital Gains derived from the sales of shares are tax-exempt, those from immovable property may be taxed at a 20% rate.
In addition, under the intellectual property (IP) regime, 80% of the net profit for the exploitation of intellectual property may be tax-exempt.
As of April 5, 2019, the Cypriot House of Representatives adopted a new implementing the provisions of the European Union (EU) Anti-Tax Avoidance Directive (ATAD). This introduces new rules on Controlled Foreign Corporations (CFCs), limits on the deductibility of exceeding borrowing costs and interest limitation rules that were previously absent.
There are no withholding taxes in Cyprus on payments on dividends and interests.
Due to this favorable tax regime, Cyprus is the gateway to the European common market chosen by many non-EU companies and a portal for investment from the West into Russia, Middle-east, Asia and South America. Learn more about Cyprus' corporate taxation, legal framework and tax treaties at incorporations.io/Cyprus.
This should not be construed as tax advice. We have access to a global network of qualified attorneys and accountants who can give you the proper advice for your particular circumstances. Contact us for further information.
- Property tax No
- Transfer tax Yes
- Inheritance tax No
- Net worth tax No
- CFC law No
- Tax residency days 183
- Personal income tax rate 35%
- Capital Gains tax rate 20%
- Investment income tax rate 0%
- Territorial taxation No