In an attempt to attract foreign investments to the Island and help economic growth, the Cyprus government in March 2021 revised Regulation 6(2) of the Aliens and Immigration Regulations.
These amendments were in tune with the government’s general objectives at the time to stimulate and increase foreign investment in areas other than real estate.
Last Friday, the Council of Ministers, in a move that took aback those of us working in the Industry, approved a proposal by the Ministry of the Interior to review the criteria for granting Permanent residency to Investors under provisions of Regulation 6(2) of the Aliens and Immigration Regulation.
The main objective of these reforms is to put in place safeguards and ensure a secure and transparent process that would ultimately benefit the Cypriot economy in the long run by maintaining the integrity of the immigration procedures.
This revision was prompted by the need to revise specific provisions to enhance the procedure and address observed shortcomings.
The Minister of Interior Constantinos Ioannou stated that the goal was to shield the process and eliminate weaknesses that were observed.
Although the investment amount remains unchanged, control mechanisms have been introduced to ensure that the applicant retains their investment for life.
The Minister said the decision “to revise the existing policy of the Ministry of the Interior, which aimed to stimulate the real estate market, but also more broadly the economy, was taken because it had become clear that certain provisions needed re-evaluation”.
The revision of the criteria concerning the procedure of granting Immigration Permits to nationals of third countries who invest in Cyprus foresees stricter parameters in terms of the checks required for granting them and mechanisms to safeguard the process.
In particular, the applicants will be required, among other things, to provide, on an annual basis, evidence proving that they still maintain the initial investment and that they continue to receive the required income determined for them and their family.
In cases where the holders of the immigration permit fail to provide the documents required, there’s and their family will be cancelled.
Another change will be the increase of the required annual secure income of the main applicant to €50,000, instead of €30,000, for each minor child to €10,000 instead of €5,000, and for the spouses €15,000.
Furthermore, a significant change in the regulations is it will no longer be possible for the parents, the parents-in-law, and the adult children of the main Applicants to be granted Permanent Residence as their dependents.
These changes appear to come into effect on 2 May, and official announcements will no doubt be made very soon.
While we understand and respect the underlying objective of these revisions, which is to maintain the integrity of the system, it remains to be seen how implementing these new provisions will affect investments.
The content of this post is intended to provide a general guide to the subject matter and does not constitute legal advice.
By Esme Palas, Barrister at Law, Partner of the Law Firm Michael Kyprianou Advocates and Legal Consultants [email protected]