In 2013 Cyprus launched a citizenship through investment program (Cyprus investment program – CIP). Since then, at least three thousand investors have gotten Cyprus passports.
Why does Cyprus attract investors?
The Cyprus Investment Program is very popular due to its simplified and transparent procedure. Thus, to obtain citizenship of Cyprus one doesn`t need to renounce the current citizenship, permanent residence on the island or knowledge of Greek.
When buying property on the island investors have two options. The first is immigration through the permanent residence permit. In this case investment of €300,000 in real estate is required. In 7 years after getting permanent residence permit one can apply for citizenship.
- The first is immigration through the permanent residence permit. In this case investment of €300,000 in real estate is required. In 7 years after getting permanent residence permit one can apply for citizenship.
- If one opts for the CIP, investment in realty at least of € 2.0 million is needed. The procedure of obtaining citizenship takes only a couple of months. However, if the real property has already been used by other investor to obtain citizenship under the program, the required amount of investment should be at least € 2.5 million.
Both options allow granting the cherished status not only to the applicant himself, but also to his close relatives, including the spouse and parents, as well as the children, both minors and those under 28, who are financially dependent on the applicant. Interestingly, under the investment citizenship program even the parents of the spouse are entitled to Cyprus citizenship.
Applications for citizenship are considered pretty quickly: 2 months when obtaining a permanent residence permit, 6 months under the investment citizenship program. This time frame is expected to be further reduced as a part of government`s actions to combat the crisis caused by COVID-19 pandemic.
Profitable investment in Cyprus economy
The CIP has such conditions that investments in real estate not only allow you to get citizenship of the country, but also can make profit provided you handle them properly. Apartments, houses and villas for short term rent are popular with tourists, the number of which has increased significantly in recent years. The basis for long-term rent is representative offices of international corporations, which are attracted to the island by the favorable tax regime.
Advantages of Cyprus tax jurisdiction are also available to investors. The income tax is 12.5% (lower than in other EU countries) and there is zero rate for most of other taxes. These include tax on the sale of investments (shares, bonds, etc.), property tax, inheritance tax and retirement benefits.
International corporations choose Cyprus
Cyprus is at the top of international companies' preferences when selecting locations for headquarters and regional offices. Besides of the benefits of tax law, there are other reasons. The time zone is convenient for contacts not only with Europe but also with Asia, North Africa. Skilled labor, low operating costs and high quality of life makes Cyprus a perfect place for running a business.
So, it is quite logic that many large companies such as Wargaming, NCR, Amdocs have moved their corporate and operational management offices to Cyprus.
What is more, the Republic is gradually becoming an important maritime centre of international importance. Thanks to favorable legislation, the international register of ships in Cyprus has already become the third largest in Europe and ranks 11th in the world. .
What real property to invest in? Types of realty in Cyprus
There are two types of investors. Some want to buy property at the lowest price, maximizing their profits. Others prefer expensive and luxury properties that provide a high level of prestige. Of course, these two requests may coincide.
For those who are interested in an early return on investment, renting out property for a short term would be a good opportunity. Despite the fact that the coming summer season is supposed to be a failure for the tourism industry, the revenues from tourism are said to increase in 2021 as the Cyprus tourism industry has already proved its stability in the previous period.
Purchase of office space on the island has recently been considered a profitable investment as well. However, due to the uncertainty created by the pandemic, the popularity of this type of investment is likely to plummet in the near future.
It is expected that residential property will be the least affected by the economic crisis caused by the pandemic. We should expect a growing demand for low-end housing, as people will have to reduce their rental costs. Of course, luxury villas and penthouses by the sea always remain desirable and in demand.
The best areas for investments
According to statistics, it is Paphos and Limassol where the value of estate is the highest.
- Limassol is chosen by those investors who are interested in expensive and prestigious properties. Despite a recent rise in prices for such objects in the city, at the moment prices have begun to decline smoothly to a more realistic level. The impact of the pandemic is likely to accelerate this trend, and prices is going to fall to a competitive level.
- Paphos is included in the UNESCO World Cultural and Natural Heritage List. The proximity to an international airport, luxurious beaches and a wide range of attractions provide Paphos with a constant flow of tourists who need accommodation for a short term. Cyprus authorities’ recent decision to expedite the construction of a new marina in the city, which is expected to be the largest on the island, will help Paphos gain even more popularity
What should investors pay attention to? Tips from DOM Live
- Take a look at the sites located in popular tourist centers. Purchasing property in Paphos or Limassol will provide you with a stable and almost year-round rental income.
- Choose the housing that provides privacy. The consequences of the pandemic are going to affect tourists’ preferences. For reasons of social distance guests of the island are likely opt for isolated buildings rather than apartment buildings.
- Pay attention to high class facilities. In Cyprus, the greatest increase in value was observed on the luxury housing market. The bigger the investment is, the higher the return on the property will be.
- Consider the requirements for the investor carefully before buying real property. Thus, persons who have been denied participation in similar programs in other EU countries, as well as persons who do not have Schengen visa at the time of consideration of the application can not become participants.
Investment projects in Cyprus.