Recently, the Cyprus government has added a 150,000-euro donation requirement to its citizenship-by-investment program. I learned that there is a way to avoid this. How can investors do so?
Answers
The donation will not be applicable if the investor has signed a purchase of contract before May 15, 2019. The said contract should be stamped by the tax office before May 15 as well. In a different case, then the mandatory Criterion A.1 of the Cyprus Investment Program states that the applicant must donate at least 75,000 euros to the Research and Innovation Foundation. The aforementioned obligation is lifted if the applicant has invested at least 75,000 in a certified innovative enterprise (i.e., an enterprise that had acquired the relevant certificate by the Ministry of Finance) or a certified social enterprise. In addition, the obligation is lifted if the applicant has made an investment under the criterion A.3 (purchase or establishment or participation in Cypriot companies or businesses) of a total amount equal to the 20 percent of the required investment amount (i.e., 400,000) of the abovementioned criterion A.3 in a company whose operations fall within the primary sector of the economy, or the secondary sector of the economy (excluding constructions), or in the sectors of research and development, education, health and renewable energy sources. And the applicant must have donated at least 75,000 to the Cyprus Land Development Corporation for the financing of housing schemes for affordable housing, but also for the materialization of other housing schemes/measures. Please note that in such case, the investment required will be a minimum 2,575,000 in total, whereas with the donations will be minimum 2,150,000.
Only the 75,000-euro donation to the Research and Innovation Foundation of Cyprus can exempted, not the full 150,000 if the investor will invest in either: a certified innovative business or certified social company; or a company, which is operating in the primary or secondary sector of the economy or in the sector of research, technology, education, health and/or renewable energy sources sector. The minimum investment that can be made in this company is 400,000 euros.
The applicant must have donated at least 75,000 to the Research and Innovation Foundation. It is noted that if the applicant wishes to donate an amount higher than the minimum of 75,000, this additional amount can be used for purposes of supplementing the total amount of the investment.
Furthermore, the aforementioned obligation is lifted if the applicant has invested at least 75,000 in a certified innovative enterprise (i.e., an enterprise that acquired the relevant certificate by the ministry of finance) or a certified social enterprise. In addition, the obligation is lifted, if the applicant has made an investment under the criterion A.3 (purchase or establishment or participation in Cypriot companies or
businesses) of a total amount equal to the 20% of the required investment amount (i.e., 400,000) in a company whose operations fall within the primary sector of the economy, or the secondary sector of the economy (excluding constructions), or in the sectors of research and development, education,
health and renewable energy sources. Also, the applicant must have donated at least 75,000 to the Cyprus Land development Corporation for the financing of housing schemes for affordable housing, but also for the materialization of other housing schemes/measures. It is noted that if the applicant wishes to donate an amount higher than the minimum of 75,000, this additional amount can be used for purposes of supplementing the total amount of the investment made.
After the 15th of May, there is no option to be exempted from the donation element of the program.
One of the updated financial criteria is that the applicant must have donated at least 75,000 to the Research and Innovation Foundation and also at least 75,000 to the Cyprus Land Development Corporation for the financing of housing schemes for affordable housing, but also for the materialization of other housing schemes/measures. The obligation for the payment to the Research and Innovation Foundation may be lifted provided that the applicant has invested at least 75,000 in a certified innovative enterprise (i.e., an enterprise that had acquired the relevant certificate by the Ministry of Finance) or a certified social enterprise. It may also be lifted if the applicant has made an investment for the purchase or establishment or participation in Cypriot companies or businesses of a total amount equal to the 20 percent of the required investment amount (i.e., 400,000) in a company whose operations fall within the primary sector of the economy, or the secondary sector of the economy (excluding constructions), or in the sectors of research and development, education, health and renewable energy sources. There is no exception offered as to the donation to the Cyprus Land Development Corporation.
The mandatory Criterion A.1 of the Cyprus Investment Program states that yhe applicant must donate at least 75,000 to the Research and Innovation Foundation. The aforementioned obligation is lifted, if the applicant has invested at least 75,000 in a certified innovative enterprise (i.e., an enterprise that had acquired the relevant certificate by the Ministry of Finance) or a certified social enterprise. In addition, the obligation is lifted, if the applicant has made an investment under the criterion A.3 (Purchase or Establishment or Participation in Cypriot Companies or Businesses) of a total amount equal to the 20 percent of the required investment amount (i.e., 400,000) of the abovementioned criterion A.3 in a company whose operations fall within the primary sector of the economy, or the secondary sector of the economy (excluding constructions), or in the sectors of research and development, education, health and renewable energy sources. And the applicant must have donated at least 75,000 to the Cyprus Land Development Corporation for the financing of housing schemes for affordable housing, but also for the materialization of other housing schemes/measures. In addition to the donations an investment of at least 2 million must be done.
An investor cannot in any way whatsoever be exempt from the compulsory contribution.
The applicant must meet cumulatively the following donation prerequisites that aim to highlight the social aspect of the scheme. They subsist in equal donations to the Research and Innovation Foundation and the Cyprus Land Development Corporation. With regards to the Research Innovation Foundation, the applicant must donate a minimum of 75,000. Alternatively, the applicant may choose instead, to invest at least 75,000 in a certified innovative enterprise or
a certified social enterprise. Otherwise, if the applicant’s investment is in the participation or establishment of Cyprus companies in an amount of over 400,000 and such company operates in manufacturing, agriculture or in the sectors of research and development, education health and renewable
energy, the donation to the Research Innovation Foundation is not necessary. Additionally, the applicant must donate a minimum of 75,000 to the Cyprus Land Development Corporation. This donation cannot be avoided or managed.