The Government of Cyprus has decided to expedite the processing of citizenship by investment applications as a direct result of the COVID-19 pandemic. The decision comes among other fiscal measures as an attempt to keep some enterprises afloat and push some liquidity into the market.
The action of expediting citizenship-by-investment, also known as ‘golden visa’ or ‘golden passport’, applications for Schengen Visas has been deemed as necessary to combat the negative financial effects of the pandemic.
Cyprus is not a Schengen Member State however it is an EU Member State, meaning that residents and citizens of the country can travel and do business very easily with other EU and Schengen Member States.
Cyprus’s citizenship by investment scheme, along with all other similar schemes in the EU, have gained harsh criticism since their implementation. This is predominantly due to the risks involved with such a scheme including but certainly not limited to money laundering, tax evasion, organized crime, and corruption.
“Becoming a citizen of one Member State also means becoming an EU citizen with all its rights, including free movement and access to the internal market. People obtaining an EU nationality must have a genuine connection to the Member State concerned. We want more transparency on how nationality is granted and more cooperation between Member States. There should be no weak link in the EU, where people could shop around for the most lenient scheme,” said Commissioner for Justice, Consumers and Gender Equality, Věra Jourová.
According to reports from Global Witness, the ‘golden passport’ schemes that exist in Cyprus and other countries have highlighted a lack of transparency, insufficient due diligence and weak governance, as well as exposing all EU and Schengen Member States to significant amounts of money laundering, tax evasion and corruption, and even security risks.
Similar citizenship by investment schemes exist in Malta and Bulgaria, however, none of these countries require actual physical residence in the respective country to gain permanent residency status and/or citizenship. They only require investments and donations.
For an investor to gain citizenship and a passport in Cyprus, they must: invest €2 million in real estate, make a donation of €75,000 to the Government Research and Development Fund, and an additional donation of €75,000 to the Land Development Organization.
To simply gain a permanent residency permit (in which actual residency is not required) an invest must make a real estate investment of €300,000. The process for either approach usually takes about 6 months after all investments and donations have been made. It is not known exactly how long it will take Cyprus to process their citizenship by investment applications now that the decision has been made to expedite them, or exactly how many they will be expediting.