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New proposed regulations for the Citizenship by Investment Scheme

The Council of Ministers, during its meeting held on the 21st of May 2018, has renamed the “Scheme for the naturalization of non-Cypriot investors by Exception”. The scheme will now continue as the “Cyprus Investment Scheme” strengthened with the following safeguards:

1. A cap of 700 applications will be introduced as at the start of 2018 for the number of applications which will be accepted;
As per our understanding the cap is in reference to applications of main applicants (investors).

2. The applications will be decided on within 6 months;
The Ministry of Interior, in the regulation of the 13th of September 2016, had indicated that the timeframe for the completion of the process would approximately be 3 months. From our past experiences, the Ministry of Interior, the Ministry of Finance and the Council of Minister have been overwhelmed with the applications and a decision has rarely been taken within said 3 months. Given that the residency requirement is 6 months and the Certificate of Naturalization cannot be requested before the lapse of this period (even if the Council of Ministers has approved the application prior to the 6 months), this measure will not further delay the grant of the citizenship to the applicants.

3. A code of ethics will be adopted so as to ensure the correct use of the Scheme;
On the 9th of January 2018, the decision of the Council of Minister was published in the Government Gazette, indicating the intention to adopt a series of measures for the protection of the investor. One of these measure includes a statement signed by both the investor and the representative confirming that the Scheme and its procedure has been communicated to the investor in full.

4. Each application will be subject to enhanced due diligence, the cost of which will be borne by the investor;
It is alleged that this due diligence will be conducted by a non-governmental body and that the cost of such will be between EUR 2,000 and EUR 4,000. However, official guidelines have yet to be released.

5. Specification is made in respect of property purchase, determining that the 3 years for which the investment should be kept, commences after the issuance of the Town Planning Permit.
At this moment the 3 year period commences with the signing of the Certificate of Naturalization. It is our understanding that this last measure will only affect applicants purchasing land with the intention to build (taking of course into account that certain vendors have already obtained these permits for the plots).

We shall keep you informed on the developments of this revised Scheme.


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