Cyprus Investment Programme (the "CIP") has been in force since May 2013, and since then has repeatedly proved its success as a relocation scheme. 1,864 applicants have been granted Cyprus citizenship by investment during period between 1st June 2013 to 15th August 2018.
CIP requirements were frequently revised by Ministry of Interior to continuously improve the scheme's quality and transparency. The program was revised during 2014, 2016, 2018 and 2019. The last amendment to the Scheme, as passed by Ministry of Interior circular dated 13.2.2019, set out the following new requirements: -
- Applicant should possess a valid Schengen Visa (excluding minors under 18)
- The applicant should not have been rejected under a different EU citizenship scheme
- Enhanced Due Diligence measures to be carried out against the applicant by designated authority.
- The applicant should donate €75,000 to the Cyprus Land Development and €75,000 to the Research and Innovation Foundation.
- Retention period of the investment property by the applicant increases from 3 to 5 years.
Enhanced Due Diligence Checks
The Republic of Cyprus had traditionally established itself as an international business hub and a top European relocation center. Moreover, Cyprus' legal framework has always been a fully transparent, and harmonized country in accordance with EU and international standards (OECD, FATCA, CRS, AML etc.).
Nevertheless, the Ministry of Interior decided to further improve the scheme's credibility by adding requirements (1)-(3) as a means for addressing any concerns echoed in respect scheme's transparency. This comes no surprise as regulatory compliance has been always been in the center of attention within professional services sphere of the Republic of Cyprus.
Why does it matter?
The recent change in CIP - with the addition of the enhanced due diligence checks - means that Cyprus not only addresses directly, and efficiently, any concerns echoed related to the background of applicants but at the same time it delegates this important regulatory power to designated firms internationally acclaimed as experts within the field of regulatory compliance.
These firms will be engaged by Cyprus Government for the purpose of thoroughly screening CIP applicants, and ensuring that applicable European AML and Regulatory framework is duly complied. Important to note that these 'added' safeguards are additional to existing Due Diligence tools employed by Ministry of Interior; whilst certain categories of applicants, as shown below, are excluded altogether:
- Politically Exposed Persons occupying a civil post within the last 5 years
- Persons whom are subject to criminal investigation and/or subject to criminal proceedings
- Persons sentenced to imprisonment for various offenses
- Persons subjected to investigation or being sought by international authorities (i.e. Europol, Interpol, UN Security Council etc.
- Persons affiliated with legal entities subject to European sanctions or third country sanctions (USA, Russia etc)
Entering an Era of Transparency
As the above analysis shows CIP may perhaps be the most transparent European regime in terms of regulatory compliance. The safeguards applied are fully complaint with EU Regulatory framework and ensure that any investments made in the country will be done by high-worth, trustworthy, and zero risk applicants.
These changes will ensure the sustainability of the scheme, and ensure that transparency and compliance, fundamental values to European Regulatory Framework, will be strictly adhered!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
