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THE CYPRIOT ECONOMY IN FIGURES
Mainly driven by rising private consumption and investment, the Cypriot economy has been exhibiting positive growth since the beginning of 2015 which accelerated in 2018 with real GDP growing by 3.9 %. According to the baseline macroeconomic data, growth reached 4% in 2018 and is expected to register 3.4 % in 2019.
| Macroeconomic Projections For The Economy | |||
|---|---|---|---|
| 2018 | 2019 | 2020 | |
| GDP Growth | 3.9% | 3.4% | 3.2% |
| Unemployment | 8.4% | 6.6% | 5.8% |
| Inflation | 0.8% | 1.0% | 1.2% |
CYPRUS PERMANENT RESIDENCY
Attracting Foreign Direct Investment (FDI) is at the core of the Cyprus development strategy and constitutes one of the major drivers for its economic growth. The Cyprus Permanent Residency (PR) Program is a scheme devised to attract investment into the country’s economy.
There are two ways of obtaining the PR in Cyprus i.e, fast-track procedure and slow-track procedure. The main difference between the fast-track and the slow-track is the processing time needed to obtain the PR Permit, in addition to the investment amount involved.
The main requirement is one of the following investment options:
a. Purchase of new immovable property of a total market value of at least EUR 300,000 plus VAT. The applicant must submit the application form accompanied with a contract of sale and proof of payment of at least EUR 200,000 plus VAT. The contract of sale must have been submitted to the Cyprus Department of Land and Surveys. The property can also be bought by a company provided that the company is registered in the name of the applicant or the applicant and his/her spouse. They must also be sole shareholders.
b. Purchase of up to two new or used immovable non-residential properties (offices, shops, hotels or other developments) of a total market value of at least EUR 300,000 plus VAT.
c. Share capital of EUR 300,000 of a physical company registered and operating in Cyprus, which employs at least five people.
d. Units of EUR 300,000 in the Cyprus Investment Funds Association’s collective investments (AIF, AIFLNP, RAIF).
The applicant must provide supporting evidence of a secured annual income of at least EUR 30,000 deriving from abroad. This income must increase by EUR 5,000 for the spouse and every additional child and EUR 8,000 for each dependent parent. The income may include, for example, salaries from employment, rents, pensions and dividends from shares.
In case the applicant decides to invest in new residential units, the annual income must derive from abroad. For all the other investing options the income can be generated from sources within Cyprus. It is important to mention that both the income of the applicant and the spouse can be taken into consideration.
The pledging of a deposit in a Cyprus bank account is no longer required. Nevertheless, the applicant should still confirm that he/she does not intend to undertake any sort of employment in Cyprus, apart from the position of the Director in the company that he/she might have chosen to invest in. The applicant and/or the spouse can be shareholders in a Cypriot registered company and receive dividends, or occupying the position of the Director in the company without receiving salary.
The Residency card is obtained approximately within 2.5 months through the fast-track process, and the holder might be eligible to apply for becoming Cyprus Tax resident with the advantage of being exempt from worldwide dividend and passive interest income and from the profit of the sale of securities.
A fee of EUR 500 is payable with the submission of the application and EUR 50 extra for biometric capturing. The application will then be examined by the Civil Registry and Migration Department and will be submitted to a permanent secretary of the Ministry of Interior, who will make a decision within two months. Once approval has been granted, the applicant and all the members of the family must visit Cyprus within one year to obtain the actual permit. When in Cyprus, a visit is organized to the migration office in Nicosia in order to capture the biometric data for all members of the family applying. The biometric data can be submitted either with the submission of the application for residence, during the application process, or immediately after approval.
The fast-track residency is usually obtained in about two months.
The Permanent Residency known as category F or commonly referred to as slow-track requires an investment in real estate of at least € 100,000 (plus VAT).
a. Prove that he/she has a secured minimum annual income of € 9.600, in addition to € 4.600 for every dependent person. The Migration Department may require additional amounts as it deems necessary.
The above-noted income could derive from employment, pensions, deposits, business activities, stocks, company shares, rents, etc. from abroad.
b. Submit the application form accompanied with a title deed or contract of sale of property in Cyprus and the corresponding proof of payment. The contract of sale should already have been submitted to the Department of Lands and Surveys.
c. Submit a Criminal Record Certificate (if the applicant resides abroad), which must be issued by the Authorities in his/her country of origin, and he/she should not constitute in general any threat to the public order or security in Cyprus.
d. Submit an undertaking that he/she does not intend to engage in any business, trade or profession in Cyprus.
e. Visit Cyprus at least once every two years. It is to be noted that only children up to the age of 18 years old can apply as a dependents, and their permanent residency will be valid until they become 18 years old. The parents of the applicants cannot apply as dependents.
It is estimated that the period for the examination of the application for permanent residency under category F shall be 18 months.
BENEFITS
BENEFITS OF THE PERMANENT RESIDENCY
• The PR is PERMANENT.
• The Residency card is obtained within two months through the fast-track process.
• The PR holder may easily apply for a 1-year Schengen visa through any European Embassy in Nicosia. Once Cyprus enters the Schengen zone, the PR holder will have the right to travel freely in Europe.
• The PR is granted not only to the applicant but also to the applicant’s spouse, minor children, financially dependent adult children up to 25 years (if they are single), in addition to the parents and parents-in-law of the applicant. (Fast-track)
• The PR holder is free to enter and live in Cyprus without a visa.
• The PR holder has no obligation to relocate to Cyprus, provided he/she visits the country every two years.
• The PR holder is not affected by any tax liability in Cyprus.
• The PR holder may be eligible for citizenship by naturalization after 7 years of residing in Cyprus within 10 calendar years.
• The whole family and parents can apply to get a residence permit.
• The PR holder might be eligible to apply for becoming Cyprus Tax resident with the advantage of being exempt for worldwide dividend and passive interest income and from the profit of the sale of securities.
Through its partners, SERAY DEVELOPMENTS may assist any applicant, whether for citizenship or permanent residency, in achieving the desired result.