Cyprus is the new gateway to the EU and Canada for foreign investors
As European governments struggle to find innovative ways to fill in their bourgeoning deficits, they are increasingly opening the doors to wealthy foreign nationals seeking second residence and citizenships in return for direct investments.
Several European countries offer citizenship in return for large sums in investments but each come with a different set of criteria. Countries like the UK, Ireland, Spain and Portugal tend to be more restrictive, requiring physical residency and knowledge of their native language before citizenship is ever granted. However, as EU economies continue to dwindle and competition between the countries that offer immigrant investor programs heats up, the allure of affluent Chinese, Russian and Gulf investors is resulting in an expedited path to EU citizenship.
Cyprus is a prime example.It was sink or swim for Cyprus after the country’s financial meltdown in 2012 steered it towards bankruptcy, so as a means of injecting cash into its weakened economy it offered citizenship through a ‘fast track scheme’ to foreigners who were willing to plow at least €10 million in direct investment into the country. However, by April last year, as the economic situation worsened due to the banking collapse, and as a way of offering an olive branch to the hundreds of foreign investors (mainly Russians) who lost €3 million or more in Cypriot banks, the country’s President Nikos Anastasiades said he would grant residency to foreigners for as little as €300,000.
The Chinese were quick to react to Cyprus’s new offer by snapping up prime real estate – pushing property prices up on the island. “Cyprus is already booming with Chinese investors,” says Nikolas Michalias, a property valuer at G&P Lazarou in Cyprus who spends half the year in China promoting fast-track visas tied to real estate investments. “Every day there are more than 20 Chinese nationals landing in Cyprus to search for property.”
Under the new citizenship by investment scheme, Cyprus now grants full EU citizenship within just three to four months – making it one of the most attractive programmes in an already overcrowded EU market – but it’s the freedom of movement that really resonates with foreign investors. The passport holder is entitled to live and do business in any of the EU states, as well as having visa free access to Canada.
Under the new programme, investors who want to retain their liquidity for investments elsewhere in Cyprus or Europe can opt for a financing option on the required investment of €5 million, lowering their cost to under €900,000 including a €500,000 investment in property.
Global financial advisory firm Arton Capital which specialises in immigrant investment programmes for ultra high net worth clients, has been advising the Cypriot government on ways to make the programme even more competitive and attractive to wealthy investors.
“We decided that we needed to have a team on the ground in Cyprus to handle any citizenship or real estate enquiries we get, so we joined forces with one of the most prominent law firms in Cyprus, Tassos Papadopoulos & Associates,” says Armand Arton, President and CEO of Arton Capital. “The law firm will complete all banking transactions necessary to complete the fast track citizenship process in the most hassle free way possible within less than three to four months.”
Malta also planned to sell citizenships at an even lower cost in a bid to edge out its competitors but their plans provoked public outrage and as a result the programme will be debated in EU parliament in January. In the meantime however, the Maltese government has made amendments to the bill, which has meant the cost of the programme has rocketed to €1.15 million, with an additional €500,000 required in property, bonds and shares on the island.