The Government of Cyprus has officially suspended the citizenship by investment scheme effective from Nov 1, 2020 in its current form. No new applications will be accepted after this date.
The Council of Ministers approved the proposal of the Ministers of Finance and Interior for the abolition of this investment program from 1/11/20. The proposal was based on the longstanding weaknesses but also on the abusive exploitation of the provisions of the program
The widespread abuse of the program exposé from Al Jazeera undercover investigation offering passport to criminals, has led to the immediate suspension of the scheme by authorities.
To Υπουργικό Συμβούλιο ενέκρινε την πρόταση των Υπουργών Οικονομικών και Εσωτερικών για κατάργηση του παρόντος επενδυτικού προγράμματος από 1/11/20. Η πρόταση βασίστηκε στις διαχρονικές αδυναμίες αλλά και στην καταχρηστική εκμετάλλευση που έτυχαν οι πρόνοιες του προγράμματος.
— Προεδρία της ΚΔ (@CYpresidency) October 13, 2020
Cyprus opened the first citizenship by investment scheme in the EU in 2007 after becoming a EU member state in 2004 and adopting euro in 2008. When the program first started Cyprus required 25 million euros to be invested for citizenship, since then the minimum investment came down to 2 million euros in 2016 making it very favourable for foreign investors.
Cyprus hit by financial bailout crisis in 2013, as a result of measures taken for the Bank of Cyprus and Laiki Bank on 15 March 2013 with a loss of at least EUR 3 million could also apply for Cypriot citizenship.
Since 2013 to 2020, Cyprus has received 8 billion euros in foreign investments invested mostly in real estate for passports. More than 4000 passports were issued to investors.
As of 2020, the foreign investors had to satisfy all the below conditions to apply for Cyprus investment program (CIP)
- Invest €2 million euros in real estate or business or investment funds
- Must own a permanent home €500K euros maintained for life
- Must have had a schengen visa previously
- Contribute €150K one time to housing and research development of Cyprus
- Annual quota of 700 applications per year.
In 2020, several CIP amendments were proposed increasing the investments and provisions to revoke passports of suspected investors, after the scheme were heavily criticized by EU for not vetting the candidates efficiently and perform AML checks
So far more than 600 agents and service providers were approved in CIP registry to market and promote the CIP scheme. Cyprus abolished Government bonds back in 2018 which previously qualified for citizenship.
Cyprus has been a magnet and haven for millionaires until today. With the citizenship scheme suspended, golden visa schemes that offer residency, instead of citizenship likely to become more popular and attract more investments.