Last updated on July 13th, 2023
Designed to provide freedom for a lifestyle of your choice, the Cyprus Permanent Residence by Investment Program is a golden opportunity to invest in the type of life that puts you, your family, and your business in a thriving environment.
While Golden Visas are a newer concept, the idea of investing for residency or citizenship has a long history. The Aspen Trust Group delves into the emergence, rise, and advantages of the Cyprus Permanent Residence by Investment Program in a modern, globalized context.
History of Residency-Based Programs
In 1870, the emergence of global citizenship shaped the relocation movements of merchants and businessmen across Europe through the introduction of the Naturalization Act of 1870 in England. Many Europeans were attracted to the relocation possibilities formed through the act in the British Empire. As a result, Scotland would be the first country to issue citizenship specifically through the Royal Bank of Scotland, which provided Scottish and, as an extension, British citizenships.
Citizenship is not the only means of relocating to a new jurisdiction. In the 1980s, the concept of Golden Visas, or residence permits through investment programs, took root in the Pacific and Caribbean jurisdictions that were eager to attract foreign investment and talent. By 1990, both the United States and Canada had their own form of investment residency programs. Most residency-based investment programs center on investment in the form of investment in real estate, such as purchasing residential properties. While data collection on Residence by Investment programs are limited, it is estimated that EU member states have garnered around 25 billion Euros in foreign direct investment and granted close to 100,000 residence permits in the last decade.
In exchange, foreign investors gain benefits such as more ideal tax solutions than in their home country and more freedom with visa-free travel opportunities. Moreover, European countries such as Cyprus allow individuals to set up a business and enjoy a company that is part of the European Union. Access to better educational or health facilities also reward foreign investors and have accounted for the success of residence permits via investment programs.
A Closer Look at the Cyprus Permanent Residence by Investment Program
As one of the most sought after programs in the EU, Cyprus Permanent Residence by Investment offers a fast and effective process to gain European Residence by Investment in real estate. The application process takes, on average, approximately two to three months, from the start of consultation with an agency on the application to receiving the residence permit.
Cyprus Residence by Investment requires a property or two properties purchased at a minimum of 300,000 Euros, in combination. The application and residence permit extends to the applicant, spouse and dependents up to the age of 25. Moreover, the visa comes with a lifetime validity that can then be passed down to the spouse or dependent children in the future as long as the investment in real estate is maintained. These investments usually take the form of residential properties for the applicant and family.
The main applicant is required to illustrate a stable annual income of no less than 50,000 Euros. This income can originate from various sources such as employment, dividends, pensions, rental income, and more. Furthermore, the income threshold will be adjusted based on the number and category of dependent family members included in the application. An additional 15,000 Euros will be added per spouse, 10,000 Euros per underage child, and for adult children (between the ages of 18 and 25) who are financially reliant on the investor and enrolled as students in a higher-education institution, the amount will be 10,000 Euros per individual. The validity of the annual income statement should be done through either a tax return issued by the country of tax residence or by a certified accountant.
No other residency program may be applied for in a differing jurisdiction, or the Cyprus permanent residence permit will be rejected. Applicants are required to submit (1) a clean criminal background check, (2) declaration confirming that the main applicant (and their spouse) do not intent to work in Cyprus or receive any employment-related income from Cyprus and (3) possess a valid Schengen visa or entry visa, and (4) within a year of receiving residency, submit biometric data as well. Citizenship by naturalization is possible after 7 years of permanent residency in Cyprus.
Furthermore, Cyprus is a favorable tax jurisdiction with low tax rates. When considering if Cyprus has an affordable program in the long-term, applicants can calculate that the stamp duty on real estate purchases is only 0.15-0.2% and real estate VAT is 5% on the first 200 square meters and 19% on the remainder. 19% VAT is applied for any legal or consultation services used in the process. When compared with the initial costs and fees of other EU member state programs, the Cyprus Permanent Residence by Investment Program is one of the quickest and most affordable residency programs available.
Stacking Up to Other European Countries
While other European countries such as Portugal,Greece, and Malta offer similar programs, the Cyprus Permanent Residence by Investment Program is a complete package of benefits for foreign investors and their families. Cyprus is also one of the safest countries in the EU and has a new national healthcare system, both of which have increased the country’s attractiveness to foreign investors.
Other benefits of relocating with Cyprus Residence by Investment include:
- The lowest corporate tax rate in the EU at 12.5 % (Greece 24%, Malta 35%, Portugal 21%)
- Additional real estate purchasing fees include only stamp duty at 0.15-0.2%, whereas Malta is 3.5%
- No tax on worldwide dividends and interest income, capital gains, or inheritance
- Tax-free income up to 19,500 Euros
- 5% pension tax on incomes outside Cyprus over 3,420 Euros
- More than 60 international double tax treaties
- Access to an expanding financial and business hub in the center of Europe, Africa, the Middle East, and Asia
- Relocation advantages for setting up a Cyprus company
- Opportunities to create a legacy for future generations
- Estimated ROI of 2-5% on real estate properties that are rented out as extra sources of income
- Easy, barrier-free communication as most residents and businesses are capable of using English, unlike jurisdictions such as Greece and Portugal in which an applicant would need to learn the local language to complete daily tasks
- A cost of living that is approximately 20% cheaper than the rest of Europe
- Lifetime residence permit validity, whereas programs such as Greece or Portugal only offer residency for 5 years before needing to be renewed
The Cyprus Permanent Residence by Investment Program provides foreign investors more than just a permanent residence permit, but a chance to improve the livelihoods of their family members and their businesses. Through the program, European residency offers global freedom, business opportunities, and an ideal home base.
Cyprus permanent residence by investment: The Takeaway
The professionals at The Aspen Trust Group can consult with you to decide if the Cyprus Permanent Residence by Investment Program fits your lifestyle and business needs. We can assist you in selecting a property and completing the application process. We are also able to provide detailed comparison between Cyprus and other jurisdictions.
Get the most out of your investment with tailor-made solutions by our experts through the Cyprus Permanent Residence by Investment Program and gain the benefits of freedom and opportunity in this Mediterranean jewel. Contact us to begin your consultation or to see the full range of our relocation services.