I am interested in running a Cypriot hotel as a citizenship-by-investment option. I would like to live in the hotel as an owner and run it. Is this possible? What if I sell the hotel after receiving my passport? Will my citizenship by revoked?
Yes, it is possible if the hotel will be ran by a Cypriot company and would employ at least Cypriots (or EU nationals who have been residents in Cyprus for the last five years). Furthermore, as the hotel would qualify as a commercial investment, a residence of at least 500,000 euros would also be acquired. Exiting from your investment would be possible with the lapse of three years from the naturalization, but a residence of 500,000 euros would have to be maintained for life.
The investment in the hotel must be retained for a period of at least three years from the date of naturalization. However, you must hold (directly or through the company) a permanent privately owned residence for life, the purchase price of which must be at least 500,000 euros plus VAT. There is no limitation in living in the hotel and running it, whereas the main residence can be rented out.
You may purchase a hotel and indeed run it yourself and you will qualify under the citizenship-by-investment program. Pursuant to the regulations, your investment must be kept for three years. If you dispose of your investment after the three years, your citizenship will not be revoked. Please note further that for the holders of shares in companies, as part of their investment, the ministry of interior requests the certificates of the registrar of companies evidencing that the investor is the holder of the shares and remains so for three years. If you dispose of your investment before the expiration of three years, your citizenship will be revoked.
The scheme for naturalization of investors in Cyprus by exception on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002-2015 provides the right to the investor and his/her legal spouse or partner to apply for naturalization through investment. When you are applying for an investment in commercial properties (i.e., a hotel) you are required to have a residential property of a minimum value of 500,000 euros. Therefore, it is possible to invest in a hotel, provided you also invest in a residential property. You can sell the hotel at any point provided that you will buy something else which will be of minimum value of 2 million euros, or sell it three years after the date of receiving Cypriot citizenship, (the investment must be kept for three years). The residential property mentioned above you have to keep for life.
If you proceed with an investment of 2 million euros in real estate, you are not required to buy an additional residential property of at least 500,000, provided that one of these residential units within your real estate investment is worth at least 500,000 and will be maintained for life in order to maintain your passport. So taking into consideration the above, if you sell the hotel and do not maintain any residential unit of at least 500,000, then your passport will be revoked.
You can proceed with an investment of at least 2 million euros for the purchase of buildings or for the construction of other land development projects (developments in the tourism sector, including hotels) or other infrastructure projects. Therefore, with the purchase/construction of a hotel here in Cyprus, you will be eligible to apply for Cyprus citizenship. The abovementioned investment shall be made three years preceding the date of the application and must be retained for a period of at least three years as from the date of the naturalization. In case where, following a periodic inspection, it has been established that this financial criterion has been breached, the granted naturalization may be revoked. Therefore, you shall maintain the hotel for a period of at least three years after you obtain your passport. Please note, however, that another requirement is the possession of a permanent privately owned residence in the Republic of Cyprus, with purchase price no less of 500,000, plus V.A.T.
The purchase of the hotel would constitute an eligible investment under the Cyprus investment program, provided the minimum amount invested is 2 million euros. Although you would be allowed to reside in the hotel, you would need to purchase a separate residential property of a minimum price of 500,000 (plus any VAT, if applicable) in order to qualify for the submission of an application for Cyprus citizenship under the Cyprus investment program. If you were to sell the hotel earlier than the three-year period from the date you acquired Cyprus citizenship, that would constitute a breach of the conditions of the program and could lead to revocation of your citizenship.
Your question relates to investment in real estate, land development and infrastructure projects where you will need to invest at least 2 million euros for the purchase or construction of immovable property or development creation such as residential or commercial developments, developments in the tourism sector or other infrastructure projects. Mere purchase of land is allowed, provided that the land is eligible for construction (in which case a business plan must be presented to the relevant authorities for approval). It is understood that investment in land that is situated in a building zone of zero development is excluded. Every main applicant must be the owner of a permanent residence in Cyprus, with a market value of at least 500,000 euros plus VAT. With regards to you selling the hotel, please note that the investment may be sold after three years. However, you being the investor must always maintain a property with a value of at least 500,000. Therefore, your citizenship shall not be revoked.
Kindly note the following: Any applicant who wishes to obtain Cyprus citizenship by investment should make an investment of at least 2 million euros for the purchase or construction of immovable property, whether residential or commercial, and whether related to the tourism sector or to other infrastructure. Please note that in case the applicant will proceed with the purchase of a commercial property (i.e., hotel) the applicant must also hold a permanent privately owned residence in the Republic of Cyprus, the purchase price of which must be at least 500,000, plus VAT. If this is the case, kindly note that the applicant is restricted from selling his investment (hotel) for three years from the date of the acquisition of Cyprus citizenship. Regarding the permanent privately owned residence, the applicant must retain this investment into his possession for life or it can replaced the same by a different property of equal or higher value, but in any case the applicant should keep in his possession a permanent residence in Cyprus. If you want to live in the hotel as the owner without purchasing a permanent privately owned residence in the Republic of Cyprus, then you have to proceed with the following actions: You must proceed with a unification of different rooms and/or floors in the hotel in order to create a permanent privately owned residence within the hotel, the purchase price of which must be at least 500,000, plus VAT. In this scenario you will have to provide the Ministry of Interior with architectural plans for the unification, the license for the unification issued from the competent authorities, as well as a valuation from an independent valuator proving that the value of the unified residence within the hotel is at least 500,000 plus VAT. In this case you are restricted from selling the whole investment, meaning the hotel. Kindly note that as we have been informed by the Ministry of Interior, if you choose to proceed with point b (as described above) this would be a choice of high risk, as the officers are reluctant to accept a residence within a commercial building. In lieu of the above, their advice is to proceed with a separate investment for the hotel (at least 2 million) and a separate investment for the permanent residence (at least 500,000 plus VAT).
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