Cyprus Property News magazine for overseas buyers & real estate investors

Wednesday 30th September 2020
Home Investor Centre Possible legal action against Cyprus?

Possible legal action against Cyprus?

European Commissioner for Justice Didier Reynders first spoke on Al Jazeera about the revelations of the international media network and revealed that he is considering legal action against Cyprus over its citizenship status through investments.

Mr Reynders also called for changes across Europe in citizenship programs through investment and said it would be preferable for him to abolish them altogether.

His comments came after the publication of Al Jazeera’s Research Unit, The Cyprus Papers, a collection of leaked documents showing that Cyprus had sold passports to criminals, fugitives and people believed to be at high risk of corruption.

These documents, which reveal almost 1,500 passport applications with more than 2,400 names, showed that Cyprus failed to carry out the appropriate checks in dozens of cases, thus allowing criminals and persons subject to international sanctions to purchase EU citizenship. .

Reynders also told Al Jazeera that he had asked the legal service of the European Justice Committee “to analyze whether it is possible in the legal framework that we should now start an infringement procedure or submit a legislative proposal”.

Reynders  added that he would like to see some action from the European Union on the new legislation, but most of the responsibility lies with Cyprus.

“After the report you have published and some others in the past, the first element is to make sure that there are some national investigations by the judiciary,” Reynders said.

“It is the duty of the judiciary in Cyprus to investigate the situation, and if possible for the Cypriot authorities to revoke their nationality,” he said. Mr Reynders also focused on the importance of co-operation between EU Member States, calling for more information to be exchanged between supranational authorities.

“We want to have clear information about the different people applying for nationality through a clear exchange of information with Europol and other types of institutions at European level,” he concluded.

MEP Sven Geingold said “The European Commission should put Cyprus before the European Court of Justice. The passport scheme of Cyprus is a risk to security in Europe.

“You should earn your passport and your citizenship by integrating in society. And not because you have a lot of money.”

The Cyprus ‘Citizenship for Investment’ scheme has been controversial, even among Cypriot politicians. Speaking to Deborah Davies of Al Jazeera, AKEL MP Eleni Mavrou said: “The way the scheme was implemented, the last few years, it was obviously a procedure that allowed cases for which the Republic of Cyprus should be ashamed.”

13 COMMENTS

  1. Readers wishing to comment are kindly reminded to keep their comments on-topic and relevant to the substance of the original article i.e. Citizenship through Investment.

    As you will see we’ve been inadvertently drawn down a rabbit hole about Residency, a completely different topic.

    Readers looking for more information regarding residency for non-EU nationals are advised to use this site’s search facility using the term Immigration Permits.

    Thank you for your co-operation.

  2. Picking up on some reference to fast track residency. I live next to a development sold entirely to Chinese nationals who all gained permanent residency by purchasing from the developer. Only one villa is occupied by a nice Chinese family and the rest have all stood empty for well over 2 years.

    Is there any information on checks and similar issues involving permanent residency in this way? It would be difficult perhaps to trace any buyers with similar issues of criminal records, etc etc. I know EU nationals do not require criminal background checks for MEU3, but what about non EU nationals under this fast track scheme?

    With China in some turmoil and the new introduction of the digital RMB, which cannot be converted to other currencies, Presumably this may lead to future property sales decline (putting the impact of the virus aside).

    All these scheme should be revoked I feel.

    • A fast track residency applicant has to provide evidence (from Cyprus or their country of residency) that they have a clean criminal record.

      Russia as well as China are making it more difficult for their citizens to move money out of the country. And it’s also worth noting that sales to non-EU nationals have been declining month-on-month since June 2019 with the exception of a small rise last December.

      (Unfortunately, the Department of Lands & Surveys doesn’t analyse non-EU property sales by country of nationality (or if they do, it’s not available to the general public.)

  3. You refer of Course to Category F applications as well, but that in itself has issues.

    I never said that fast track leads to residency only that (as per my original missive) you can apply after 7 years and only if you have spent the last 12 months permanently in Cyprus, no gaps unless very special circumstances. That is (as it happens) how I got my citizenship, even as an EU national. They were even difficult over the fact I had to attend a relatives funeral in the last 12 months!

    My point I guess was that with a small investment in property and only having to return for about 2 weeks every 2 years, you can get to the 7 year threshold. It could raise questions as to what checks are done on those taking the Regulation 6.2 route and are prepared to live in native countries until the clock has ticked by. There does seems to be some disparity.

    EU nationals with MEU1 and then MEU3 still have to provide a 7 year audit trail of living here, where as a non EU national under Regulation 6.2 or Category F does not seem to have to be so evidenced based.

    Under Category F, I find it hard to believe someone can survive on the income requirements though.

    From http://www.moi.gov.cy/moi/crmd/crmd.nsf/All/044601A0B7CE6062C2257D2C0037F93F?OpenDocument

    Category F: Persons who possess and have fully and freely at their disposal a secured annual income, high enough to give them a decent living in Cyprus, without having to engage in any business, trade or profession. The annual income required should be at least €9568,17 (CY£5,600) for a single applicant and moreover at least €4613,22 (CY£2,700) for every dependent person, but the Immigration Control Board may demand additional amounts as necessary. Most applicants come under this Category, the majority of them being pensioners or retired persons.

    Thanks

  4. I would suggest a root and branch review of all such schemes in Europe. I believe I am correct in saying similar schemes were offered in Portugal, Greece, Ireland, Malta and UK. Now it may be the case only Cyprus was (if correct) lapse in its checks but there is every possibility other countries also have issues.

    Citizenship by investment is common around the world but usually tied to significant business investment, long term job creation, etc, not by buying a house and making readily removable investments in financial instruments and even then only after appropriate checks. I would suggest business and job creation schemes are fine provided the business and jobs last longer than 5 years and citizenship is only confirmed finally after those 5 years. Business must be profitable and have paid a certain amount in corporation tax on top of the application fee.

    If I am also correct, the permanent residency by purchase of property scheme needs a review. You need not live in Cyprus other than returning within every 2 year period, but is it the case after 7 years and provided you have lived in Cyprus for the last 12 months of the 7 years, you can also apply for citizenship?

    You are not permitted to rent out your property but so many do I am told.

    • EU and non-EU citizens can get Cypriot citizenship a passport without spending megabucks. They must have completed seven years of legal residence in the Republic prior to the date of their citizenship application. And the applicant must have resided legally and continuously in Cyprus during the twelve months preceding the date of the application. The fee is €500.

      Cyprus and Malta are now (I believe) the only EU countries selling these ‘Golden Passports’ (I heard that Bulgaria recently abandoned its scheme, but I haven’t been able to confirm.

      The UK system is more complex. But if you’re a non-EU citizen then I believe you have to apply for Indefinite Leave to Remain (ILR), which you can do after 5 years of legal residency. (To me this sounds very similar to Cyprus MEU3 for EU nationals). Once you have ILR for 1 year, you can apply for UK citizenship. The application fee is £1,330.

      (You may recall that Mohamed Al-Fayed applied for UK citizenship twice – in 1994 and again in 1999. He was unsuccessful.

      I’ve not heard that your not permitted to rent your property in Cyprus. That’s a new one on me.I’ll need to check.

      • Thanks Nigel, my understanding is this applies to those who obtain MEU3 by the €300K property purchase and the deposit to be paid into banks etc. This is why a lot of properties sold to Chinese nationals are empty, but many are rented. Grateful for any clarification you find.

          • Nigel thank you. I did not mention temporary and then permanent, I mentioned direct application for permanent without the need to live in Cyprus for 5 years to obtain MEU3.

            Could you revisit please as Regulation 6.2 (Fast Track Permanent Residency) of the Alien and Immigration Regulations.

            There is though also a Category F (flexible) option.

            Permanent residence requirements under Regulation 6.2 requires.

            Purchase a property in Cyprus for €300.000

            The investor must buy a new house or apartment or any of the combinations mentioned below, from a development company for the minimum amount of €300.000 plus VAT (VAT is 19% or 5% for the first property bought for own use).

            The investor must register his sales agreement at the Land Registry and pay at least €200.000 plus VAT to be able to apply. The payment must be made in the bank account of the seller in Cyprus, and the money should be transferred from abroad.

            The delivery date does not matter, so properties under construction can be included.

            The property can be bought in the name of a company in which the absolute owner or ultimate beneficiary will be the investor or his/her spouse.

            The investor may buy up to two properties (bought from the same development company) provided the total sales price is as mention above and can be any of the following combinations:

            Two residential properties (houses or apartments)
            Residential property and a shop (up to 100 sq.m)
            Residential property and office (up to 250 sq.m)
            If the investor wishes to sell the property, he must replace it with another of the equal or higher value and to follow all the conditions mentioned above.

            Annual Income

            The investor, together with his/her spouse, must prove yearly income from abroad of minimum €30.000, which is increased by €5.000 for each dependent (spouse and children). It is also increased by €8.000 for each dependent parent or parent-in-law and provided this is satisfied they can also apply and get the permanent residence permit.

            It can be any income abroad and usually includes salaries, pensions, dividends, fixed deposits, rents etc.

            Bank deposit in Cyprus

            The investor must transfer from abroad to his Cypriot Bank account the amount of €30.000, which will be pledged for three years.

            The holder must visit Cyprus once every two years or the permanent residency permit will be cancelled automatically.

            The holders are not allowed to work in Cyprus. However, they can be shareholders in a Cypriot company, which can do business in Cyprus or abroad, and receive dividend income from this company.
            Cypriot permanent residence permit does not give any visa-free travel to any other countries or European Union member states, as it is only for Cyprus.

            In so far as renting residential property acquired under Regulation 6.2 this is lot lawful. An applicant under 6.2 must not work or derive income from within Cyprus other than as listed above.

            Thanks

          • As I said in my earlier reply – you don’t have to spend mega-buck to apply for citizenship.

            But, as you say, you can fast-track an application for residency by buying property (but you do not get citizenship and a passport.) You can only apply for citizenship after seven years of legal residence (or five years if the applicant’s parents or children are Cypriot citizens.)

  5. Cyprus shouldn’t take any notice of these criminal EU leaders, and should attach a passport to any property sold not just high end €2m plus properties.

  6. He can start by upholding the EU rule of law regarding a member state’s sovereignty. Yes, referring to the Republic’s of Cyprus EEZ invasion the last two years from Turkey.

  7. Same old story again and again the entire country corrupt at the highest level, I know how bad it is I am fighting in the courts on Property issues.

Comments are closed.

CYPRUS WEATHER FORECAST

EURO EXCHANGE RATES

EUR - Euro Member Countries
GBP
1.0952
RUB
0.0108
CNY
0.1249
CHF
0.9256

TOP STORIES

EU vows to take aim at ‘golden visa’ programmes

For years, wealthy Chinese have made investments in Cyprus and Malta in exchange for European Union passports – so-called golden visa transactions. Now, Brussels...

Wealthy Britons turn to Cypriot citizenship

The number of British entrepreneurs looking to "buy" citizenship from countries offering visa-free access to the European Union has risen sharply, investment migration firms...

Mixed outlook for real estate

BNP Paribas has released its second 2020 report regarding the property market outlook post-pandemic, presenting forecasts about real estate in uncertain times. The obvious differentiation...

you're currently offline