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AN INVESTED CITIZEN : ELENI DRAKOU Analyses The Recent Changes To The Cyprus Investment Scheme

author : Eleli Drakou

Many words have been put onto paper about the Cyprus Investment Programme (the Programme). The Programme was implemented by the Cyprus Council of Ministers on 24 May 20131 to further enhance foreign investment in Cyprus and to effectively restart the country’s economy, following the financial crisis.

Between 1 June 2013 and 15 August 2018, 1,864 investors obtained Cyprus citizenship through the Programme. During this period, transactions of EUR6.6 billion were recorded, out of which EUR3.7 billion were in the real estate sector.

A number of amendments came into effect in 2019, amending the Programme’s provisions and criteria. The new restrictions aim to further provide for investors’ interests and to safeguard the country’s reputation as an investment destination.

In early 2019, the Council of Ministers decided to exclude from the Programme those who had already been rejected in their attempt to obtain the citizenship of another EU Member State. In addition to this restriction, the Council of Ministers decided on 25 July 20193 to exclude high-risk individuals from the scheme, i.e. persons who hold or held a political position during the previous five years; persons subject to criminal investigation or criminal proceedings; and persons affiliated with legal entities restricted or sanctioned by the EU, or sanctioned by non-EU countries or the UN Security Council.

Moreover, a stricter due-diligence procedure is expected to be implemented; the government has appointed three compliance companies to carry on the applicants’ diligence and background checks, which is now conducted internally by the government’s departments.

On the same day the restrictions were implemented, it was ruled by the Council of Ministers4 that the mandatory donation of the amount of EUR150,000 will be contributed after the investor is granted citizenship, instead of prior to the submission of the citizenship application. This was implemented in May 2019 and is regarded as a positive development for interested applicants, since their funds will not be contributed in the event their citizenship application is rejected.

Such donations significantly contribute to society, as they are shared between the Research and Innovation Foundation and the Cyprus Land Development Corporation. The latter will provide for housing schemes for sensitive groups, thus enhancing the Programme’s socially responsible character.


1. Decision 75.148.

2. Study in relation to the Cyprus Investment

Programme – Economic Impact, 2019.

3. Decision 87.926.

4. Decision 87.927.

The applicant can currently choose to invest in:

- real estate;

- a company operating in the country with - a substantial presence and activities;

- alternative investment funds licensed by the Cyprus Stock Exchange (CSE); or

a combination of these three investment categories.

Decision 87.927 introduced the investment in securities on the secondary market of the CSE up to EUR200,000 under the option of combination of investments. Decisions 87.926 and 87.927 have been effective since 23 August 2019.

As more than half of the Programme’s transactions are related to real estate, the Council of Ministers enforced a number of measures to safeguard the investors’ interests with regards to their real estate investments. In light of these measures, in cases where the investment includes immovable properties under construction, a planning permit must be secured in order to submit a Programme application, and a bank waiver letter must be provided in case the immovable property bears any mortgages. If the property’s construction is completed, a completion certificate must be provided during the submission of an application. If the property is under construction, a specific account must be used or a performance bank guarantee must be secured for a minimum amount equal to 5 per cent of the property’s value.

These legal provisions used to be at the discretion of the investor; however, they are now mandatory in an effort to protect investors and enhance the scheme’s credibility.

The Programme remains a straightforward scheme with set criteria. However, the scheme now appears challenging and more restrictive as it eliminates a large group of high-net-worth individuals, including politically exposed people. On the other hand, this is regarded as a positive measure, as it provides for the Programme’s continuity and trustworthiness.

This article was published in the Global Citizenship-CITINAVI magazine p.57

This article published also firstly in the STEP journal (Issue 2, Volume 28) 2020, page 77.


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