Why is the Cypriot passport desired by wealthy GCC residents

By Veronica Cotdemiey, CEO of Citizenship Invest

Obtaining a European citizenship has been the goal for many immigrants and worldwide investors looking for a second nationality. There are a handful of countries in Europe and worldwide that can grant individuals their citizenship, however, the application process set by the citizenship law of these countries can be very tiresome, lengthy, and often requires people to learn the language of the country. For these reasons and limitations, the country of Cyprus has risen as a star in the citizenship by investment industry   being the most time-effective program within the European Union. Within a period of 6 months the applicants and families are able to hold in their hands their European passport and are able to reside anywhere within the European Union.

Cyprus enjoys a diverse and stable economy with high potential of growth especially when gas extraction work starts in 2019. It is classified by the world bank as a high-income economy thanks to the contribution of the tourism, financial, and property sector. The country has one of the lowest crime rates in the European Union with an advanced legal system based on English law. More than 90 percent of the population of Cyprus speaks English, which explains its popularity as a tourism and business hub. In June 2017 arrivals of tourists totaled 1.4 million compared to 1.2 million in the corresponding period of 2016, recording an increase of 16.6% and outnumbering the total arrivals ever recorded in Cyprus during the first six months of the year. From a real estate standpoint, and according to data published by the Department of Land and Surveys, property sales contracts by foreign buyers in July 2017 amounted to 251 compared to 191 in July 2016, representing an increase of 31.4%.

The Cypriot Government has established a number of incentives to attract foreign direct investment into the country. One of which is the citizenship by investment program. The scheme stipulated in the citizenship law of the country was introduced in 2013. Since its inception, the program has undergone some changes and refinement to make it more accessible and alluring for investors. In September 2016, the Government of Cyprus introduced changes that included the reduction of the minimum investment amount to EUR 2 million (from EUR 2.5 million). The law also included the option to add the parents of the main applicant for an additional EUR 500,000 plus VAT investment in a luxury property in Cyprus.

So what is driving High-net-worth-individuals to pay such amounts of money for the Cypriot nationality?

Being an active part of the European Union and the Eurozone, Cyprus became a major force in the Citizenship by investment arena. It helped the country attract a big number of wealthy individuals to invest in its growing luxury real estate market. In addition to its political affiliation in Europe and internationally, this Eastern Mediterranean island has an advantageous geographical location placing it in the center of the Middle East and close to major destinations around the world.

Cyprus’ citizenship also has other benefits that are highly sought-after by wealthy investors coming from the GCC , Africa, Russia, and other countries in the far east. Cypriot passport holders will have the ability to travel to major destinations without applying for a visa. It allows instant travel to over 145 countries including the UK, UAE, European Union, Canada, Australia among other major countries and often permits stay for 30 up to 90 days at a time depending on the country. Cyprus citizens are also permitted to live, work, and study in any country in the European Union. This gives them the ability to leverage the high standard of living in many countries in the European Union.

Many business owners who obtain the Cypriot nationality are also interested in utilizing double taxation agreements between their home countries and Cyprus. Namely, because Cyprus offers one of the lowest corporate tax rates in Europe. A resident with a Cypriot passport is subject to tax under the Cyprus personal tax regime, which is regarded as one of the most generous tax regimes in Europe. Non-tax residents are charged to tax only on income generated within Cyprus, i.e rents, royalties, remuneration or other profits arising from property situated in Cyprus. Cyprus also does not impose an inheritance tax on property, which gives the ability to pass it down to future generations without the burden of paying any tax.

Cyprus citizenship application process is among the easiest in the world and is open to all nationalities. The Government of Cyprus presents a clear submission process, whereby applicants are required to fill a Government citizenship application form and supply a police clearance report, as well as a birth certificate, and a legitimate source of funds. Applicants will get a European citizenship in a period of 6 months without the need to relocate or live in Cyprus at any point in time. This omits the need to migrate and disrupt their lives and businesses leaving them with a European passport for generations to come.

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