In an effort to attract foreign high net worth individuals to invest and qualified individuals to relocate and work in the country, either on their own or as part of a group structuring/reorganisation, Cyprus offers some very attractive incentives. One of these incentives is the Permanent Residence Permit Programme (the ‘Programme’), a special class of permit, which relieves its holders from time consuming procedures associated with other types of permits, such as consular inspections, renewal, etc.
The Programme became even more attractive with some changes, which became effective on 24 March 2021. These amendments are presented below.
Investment Criteria
So far the main criterion in order to qualify for the scheme was the acquisition of up to 2 properties in Cyprus with a total value of not less than €300,000 (excluding VAT and transfer fees).
Though the required amount of the investment remains the same, the investment criteria have been expanded and are no longer solely related to investment in real estate.
1. Investment in a house/apartment
This is the criterion which applied also before the amendments and involves purchase of a house and/or apartment (up to 2 units).
Qualifying properties will be only those sold by a development company to a buyer for the first time (i.e. not resales), unless the purchase of the properties took place before 7 May 2013. Sale contracts related to resale of properties which were deposited in the Land Registry before 7 May 2013 will be considered as qualifying this criterion.
In case of investment in 2 properties, those do not have to be purchased from the same land development company, as was the requirement so far.
2. Investment in real estate (excluding houses/apartments)
Purchase of other types of real estate, such as offices, shops, hotels, etc., or a combination thereof. Resales are acceptable under this category.
3. Investment in the share capital of a Cyprus company, which has operations and staff based in Cyprus
The company must have a proven physical presence in Cyprus and employ at least 5 people.
4. Investment in units of a Cyprus Collective Investment Organization (AIF, AIFLNP, RAIF)
An investment worth €300,000 in units of a Cyprus Collective Investment Organization.
In case the investment based on which a Permanent Residence Permit was granted is disposed, the permit will be withdrawn, unless the applicant replaces the investment with a qualifying one of an equal or higher value.
Fixed Deposit
Before the amendments, the applicant was required to present a certificate from a Cyprus bank that he/she has deposited an amount not less than €30,000 in an account blocked for a period of at least 3 years.
Following the amendments this requirement has been removed.
Insured Annual Income
As was the case so far, the applicant must demonstrate that he/she has at his/her disposal a secure annual income of at least €30,000. Such annual income is increased by €5,000 for each dependent family member and €8,000 for each dependent parent of the applicant and/or his/her spouse.
There is also no change in the provision that if the applicant opts for the first option of investment (house/apartment), he/she must prove that his income is derived from abroad.
For the rest of the investment options the applicant’s income may be derived also from sources and activities within Cyprus.
No intention to work in Cyprus
It has been a requirement of the Programme that the applicant and his/her spouse had to certify that they not intend to be employed or self-employed in any direct or indirect way in Cyprus.
This continues to be the case following the amendments. However, where the applicant and his/her spouse opt to invest in a Cyprus company, they are entitled to act as directors in that company as long as they do not receive a salary.
It is clarified in the amendments that in case the investment is not in the share capital of a Cyprus company, the applicant and/or his/her spouse can own shares in companies registered in Cyprus and any dividend income from such companies shall not be considered as contrary to the provisions of the Programme.
Proof of Residence
Where the applicant chooses to invest under criteria 2, 3 or 4 above, the applicant should provide evidence related to his/her place of residence in Cyprus (title deed, sales agreement, rental agreement).
Provisions related to Investment in Real Estate
As was the case before, at least 66% of the purchase price (with a minimum of €200,000 plus VAT – if applicable) needs to be paid prior to submitting the application. Evidence must be provided that the funds were produced and transferred from abroad. These funds need to be deposited in a financial institution in Cyprus in the Vendor’s bank account.
The purchase of real estate can be made by a legal entity in which the applicant and/or his/her spouse are the sole shareholders or Ultimate Beneficial Owners, and which entity is legally established in Cyprus or in another EU/EEA Member State.
Dependents
The permit is issued to the applicant and it can include his/her spouse and dependent children up to the age of 18.
As was the case so far, the permit can also be granted to unmarried children of the applicant between the ages of 18 and 25, only when it is proven that, at the date of the application, they are attending higher educational institutions abroad and provided they are financially dependent on the applicant. Such dependent children must submit their own separate applications upon payment of the appropriate fee.
In case such children are enrolled as students in higher institutions in Cyprus, they will have to apply for a Temporary Residence Permit in their capacity as students under the relevant legislation. Upon completion of their studies, they will be entitled to apply for a Permanent Residence Permit, irrespective of their age, as long as the main Applicant provides evidence of an additional insured annual income of €5,000 per annum. The permit will continue to apply after the age of 25, irrespective of whether the children are no longer students or financially dependent on the Applicant and/or get married. It is understood that their spouse and their minor children may not be included as dependent persons in such a permit.
It continues to be the case that the parents and parents-in-law of the applicant can apply on the basis of the applicant’s investment, with the prerequisite that the applicant will present evidence of an additional insured annual income of €8,000 for each dependent parent or parent-in-law.
An immigration permit may also be granted to the applicant’s children even if they are over 18 years old and are not financially dependent on the applicant, provided that the investment of €300,000 is multiplied according to the number of adult children, which will rely on such investment. The investment can be made jointly in the name of the applicant and the adult child or solely in the name of the applicant.
In such cases, each adult child must be able to prove a secure annual income of at least €30,000, which will be increased by €5,000 for each dependent person.
Clean Criminal Record
The requirement that the applicant and his/her spouse need to provide a clean criminal record from their country of origin and residence continues to apply.
Visiting Cyprus
The applicant and the members of his/her family covered by his/her permit must visit Cyprus at least once every two years.
Application Procedure and Examination
The applications will be submitted directly to the Civil Registry and Migration Department together with a payment of an examination charge of €500. The examination, assuming the application is complete and no further information is requested, takes on average 2 months.
