More and more people around the world, particularly in areas of political turmoil, such as the Middle East, are seeking to safeguard their families' future by protecting themselves against political risk and economic instability. Cyprus can be a haven in this respect.
In 2014, the government of Cyprus introduced the Scheme for Naturalisation of Investors in Cyprus by Exception on the basis of an investment in Cyprus. Apart from shielding their families from political instability, investors can also benefit from an EU passport, which opens up a market that would otherwise have been impossible for them to enter. Needless to say, owning an EU passport entitles an investor to all the legal rights and privileges of natural born EU citizens, such as healthcare, education, working rights, residence, visa free travel to over 150 destinations worldwide, and a vote in EU elections, to name but a few.
As a full member of the EU, Cyprus provides all this without the restraints of other EU countries with similar schemes. Cyprus is a sovereign European country with strong cultural, historical and political links to Israel, the only non-Muslim country in the Middle East, and enjoys political and security stability. The future of relations between Israel and Cyprus seems to be rich in economic, commercial, and political potential, making Cyprus an ideal location for Israelis to find security and stability. In fact, following the political fallout between Israel and Turkey in 2010 and current instability within Turkey, it is expected that Cyprus will be flooded this summer by Israeli tourists, who under different circumstances would have chosen Turkey or Greece for their summer vacations.
Additionally, ever-rising prices in the Israeli real estate market make buying a home for young couples in Israel an unrealizable dream. In Cyprus, according to the government statistics office, real estate prices have dropped by as much as 40% since 2013. This means that the purchasing power of investors nearly doubled in Cyprus from 2013 to 2015. Figures for the first quarter of 2016 show a small increase of 1-2% in comparison with the corresponding period in 2015.
All these factors, together with the already established good relations between Israel and Cyprus, make the island of Cyprus an interesting destination for investors.
The criteria for acquiring a Cyprus/EU Passport are much less strict than in other EU jurisdictions that offer the scheme. For instance, in Cyprus it is not a requirement that the investor resides on the island or that they should be fluent in the local language (Greek), hold their investment property for ever, or make a donation to the government, as required in other countries. Additionally, the main applicant, the spouse and all dependent children up to 28 years of age qualify. Citizenship is also passed on by descent, offering a legacy to future generations, without the need to increase the amounts invested.
Altogether, the scheme is flexible, straightforward and quick. Dual citizenship is permitted, and the acquisition of citizenship in Cyprus is not reported to other countries. There is a wide choice of investment options to select from, including but not limited to, investment in property, shares, and bonds.
The investment portfolio can be as low as €2.5m in real estate and land development, Cyprus government bonds, Cypriot businesses and companies, and financial instruments. The investor must however own a residence in Cyprus of a market value of at least €500,000 excluding VAT.
The investment portfolio does not need to be in one project. It can be broken down into a number of investments, thereby increasing the return on investment from passive income, such as rent.
The Cyprus scheme allows for flexibility. After three years from the time of the investment, investors may choose to realize their investments and sell all assets, with the exception of the permanent residence that cannot be disposed at any time.
Yaniv Habari is the founder of Y. Habari & Co. LLC, a boutique corporate and commercial law firm based in Cyprus.
Published by Globes [online], Israel business news - www.globes-online.com - on June 5, 2016
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