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CYPRUS INVESTMENT PROGRAM
Legal Framework
The Cyprus Investment Program, based on subsection (2) in Section 111A of the Civil Registry Laws of 2002 to 2019, was approved by the Cyprus Council of Ministers on 13 September 2016, and subsequently amended in May 2018 and February 2019. The latest amendments to the CIP are effective from15 May 2019 onwards.
Main advantages of Cyprus Citizenship
Cyprus officially became a member of the European Union in 2004. Being a member state of the EU automatically entitles all EU citizens to the basic rights put forth by the European Union’s Constitution, namely:
Unrestricted rights to live, work, travel and study within 28 countries of the EU, as well as Switzerland, Norway, Iceland and Liechtenstein. An entire family can obtain Cyprus Citizenship i.e. spouse of applicant, children under 18 years, and adult dependents (ages 18 to 28) and parents of the main applicant. Visa-free travel to 168 countries. Children of EU nationals have the right to lower tuition fees within the EU.
Free movement of services. Individual citizens and their companies can offer services within the EU member states without any obstacles.
Free movement of Capital. Citizens can transfer funds between EU member states, purchase property in any EU member state, invest in any type of activities.
No requirements to live in Cyprus before filling of an application or after obtaining citizenship. However, the applicant must prior to naturalization possess a residency permit in Cyprus for a period of 6 months.
All nationalities are eligible.
Attractive tax system. Corporate tax – 12.5%
Cyprus allows dual citizenship.
Eligibility criteria
The main applicant may also add dependents to a citizenship application including his/her spouse and children, as well as parents, to benefit under the CIP.
The definition “Children” includes those up to (and including) the age of 17 and “adult dependents” which are adult children from the ages of 18 up to and including 28 (subject to their application being reviewed by the Council of Ministers prior to their 29th birthday), provided
Additionally, an investor’s child with severe physical or mental disability that makes him or her unable to work is also considered as financially dependent.
Parents of the main applicant may be included in the same application provided an additional investment of €500,000 (plus VAT if applicable), is made in residential property in Cyprus.
Furthermore, high ranking officers of Cyprus companies, who have made an investment in Cyprus, and who have paid taxes to the Cypriot authorities in the aggregate value of €100,000 in the last three years, are also eligible under the CIP.
Key requirements
A 5-year investment of 2,000,000 Euro (two million Euro) (non-inclusive of VAT of 0%, 5% or 19% as the case may be) in residential real estate in Cyprus. However, any application which includes resale residential property previously included in a CIP application by another applicant, results in an increase on the required investment to 2,500,000 Euro.
The investment in real estate must be retained for a minimum period of 5 years, after 5 years the overall investment in real estate can be reduced to a minimum of 500,000 Euro (non-inclusive of VAT, if any) in residential property which must be held indefinitely).
Examples of acceptable investments under this option:
Parents of the main applicant can also be included within the same application, subject to approval of the main applicant, with additional investment of 500,000 Euro in residential property.
Donation of €75,000 to the Cyprus Land Development Corporation.
Donation of €75,000 to the Research and Innovation Foundation.
A clean criminal record.
Investor’s name must not be included on the list of persons whose property is ordered to be frozen by the EU.
Applicants who were previously rejected for citizenship by any other EU country, are not eligible under the CIP.
Holder of a valid Schengen visa when submitting a CIP application
Application process
File the CIP application for the main applicant and spouse
Following day file a permanent residency permit (PRP) application for the main applicant, spouse and minor children (6-17). This requires the main applicant, spouse and minor children to visit Cyprus.
Within 5 days of filling, approval of PRP is granted.
Issuance of Certificate of naturalization and passports 6 months from the date of original filling (in regard to the main applicant and spouse).
Citizenship application for minor children requires 2-3 weeks for approval.
Citizenship application for adult children (up to age 28) and parents of main applicant.
Following day the adult children and parents of the main applicant must visit Cyprus to file PRP application.
Issuance of certificates of naturalization and passports apprx. 6 months from the sale of PRP filling.
Buying Property in Cyprus
The logistics for non-Cypriots buying a property in Cyprus are relatively simple compared to many countries.
Citizens of EU Member States who are permanent residents of the Republic of Cyprus are permitted to acquire any amount of immovable property in Cyprus without receiving any permit and without submitting the application form COMM.145 to the Council of Ministers, as they are not aliens in terms of the law. The only requirement is for such persons to submit a Certificate of Permanent Residence. To obtain this certificate you need to apply to the Migration Office of the Republic of Cyprus. Citizens of EU Member States who are not permanent residents of the Republic of Cyprus are permitted to acquire any number of fields and plots of land without acquiring permission from the District Officer, whereas they must obtain a permit for the acquisition of a secondary residence.
Citizens of non-EU Member States who are residents of the Republic of Cyprus are allowed to acquire only one property and have to apply for permission via the District Office in which the property is located. The acquisition of one residence is permitted per married couple. However, according to the practice followed, in exceptional circumstances they may be permitted to acquire a second property. Reasons must be given as to why a second property is requested e.g. a holiday home.
Citizens of non-EU member states who are NOT residents in the Republic of Cyprus, the same as the above applies with the exception that they are not allowed to acquire a second property.
What kind of property can I buy?
For more information on the range of properties available at Aphrodite Hills, view our listings pages.
The following outlines the legal fees and Cyprus property tax costs you may encounter upon your move to the island.
Legal Application Fees
On purchaser’s request, Aphrodite Hills Resosrt is willing to process the application to the Council of Ministers for acquiring the necessary permission for the fee of €2000 – €3000 payable only when the permission is granted. Foreign buyers can also appoint a solicitor in Cyprus to handle their affairs.
Acquiring the Title Deed
Transfer of ownership from vendor to purchaser is processed by the Cyprus Land Registry Office. To protect the buyer’s rights to the property and provide additional safeguards, it is advisable that the Contract of Sale be in writing, and registered at the District Land Registry Office within six months from the Contract date.
When issued, the Title Deed will be registered in the name of the buyer and will be recorded in the Government archives. At any time after the purchase, the buyer may sell or dispose of the property at will, provided that he/she has a valid contract. It is illegal for the Seller to contractually or otherwise prevent or forbid the Purchaser to deposit the Sales Agreement with the District Land Office. The Seller cannot mortgage property or part of the property after it has been sold (to the Purchaser) without notifying the Purchaser. If the property is mortgaged prior to its sale, the Purchaser has the right to pay the share value of the purchased property to the lending institution and the share value of the property must be released from the mortgage. The Seller or the lending institution cannot deny the payment and the consequent release of the purchased property from the mortgage. The Seller is obliged, prior to any sales, to deposit with the District Land Office, the ‘value coefficient’ of each property together with the planning and building permits and architectural drawings. Furthermore, the Purchaser has the right to know the value coefficient of the property he will purchase. Aphrodite Hills Resort Ltd has issued all the title deeds for all plots, villas and all the properties of Orpheus Village and is promptly proceeding with the issue of the title deeds for the properties of the other villages.
Stamp Duty
On the signing of a contract the purchaser is liable to pay stamp duties at the rate of 0.15% up to €170,860 and thereafter at the rate of 0.20% per €1,709. The Purchase Contract must be stamped within 30 days of its dated signature, otherwise a fine will be imposed.
Transfer Fees (Registration Fees)
Upon transfer of the property and registration in the purchaser’s name, the District Land Registry Office will charge Transfer fees which are based on the market value of the property at the time of purchase, and are calculated as follows:
| Value of Property (€) | Transfer Fee |
| 1,71 – 85,000 | 3% |
| 85,000 – 170,000 | 5% |
| 170,000 and over | 8% |
NOTE:
Capital Gains Tax
If the purchaser decides to sell the property at a later date, Cyprus Law provides that the full amount paid for it in foreign exchange, may be transferred abroad at the time of the resale. The equivalent of the full purchase price and any increase in value of the property may be transferred immediately. Property sales in Cyprus are subject to Capital Gains Tax at the rate of 20% on the gain, however, the first €17,086 are tax exempt. Provided two buyers (maximum 2) are on the original Contract of Sale, then the tax allowance can be up to €34,172.
Inheritance Tax
Inheritance Tax is not imposed.
Inheritance Tax
Inheritance Tax is not imposed.
Tax Privileges
Personal effects, household goods and furniture can be imported duty free by immigrant retirees, provided they are for personal use and have been used for a reasonable period of time; approximately one year. Also, no duty is levied on cars, allowing retired couples to enjoy the additional concession of two duty free cars.
Tax Advantages
Retirees drawing a pension are exempt from withholding taxes at source, and may be taxed at the nominal rate of approx. 5% or less, depending on income. Additionally, Cyprus has Double Taxation Treaties with many European and other countries, safeguarding its residents from paying tax in both countries.
Local Authority Fees
Depending on the size of your property, local authorities charge between €85 and €256 per annum for regular refuse collection, street lighting, sewerage and similar community services. Communal Services fees are payable to your local Municipal Authority.
Municipality Tax
As the registered owner of the property, you are required to pay an annual Municipality Tax, calculated on the market value of the property as at 1st of January 1980. Rates vary from 1% – 2%. Municipality Tax is payable to your local Municipal Authority.
Immigration to the Republic of Cyprus
Foreigners may make an application to obtain an Immigration Permit on the basis of one of the Categories referred to in Regulation 5 of the Aliens and Immigration Regulations. An Immigration Permit will not be granted to anybody unless the Immigration Control Board recommends to the Minister of Interior that such person belongs to one of the following Categories:
Persons who intend to work as self employed in agriculture, cattle breeding, bird breeding or fish culture in the Republic, provided that they have in their possession adequate land or a permit to acquire same, they have fully and freely at their disposal capital of approximately EUR 430,000 and such an employment should not negatively affect the general economy of the Republic.
Persons who intend to work as self-employed in mining enterprises in the Republic, provided that they have in their possession a relative permit, they have fully and freely at their disposal capital of approximately EUR 350,000 and such an employment should not negatively affect the general economy of the Republic.
Persons who intend to work as self employed in a trade or profession in the Republic, provided that they have in their possession a relative permit, they have fully and freely at their disposal capital of approximately EUR 260,000 and such an employment should not affect negatively the general economy of the Republic.
Persons who intend to work as self employed in a profession or science in the Republic, provided that they have academic or professional qualifications, for which there is demand in Cyprus. Possession of adequate funds is also necessary.
Persons who have been offered permanent employment in the Republic, which will not create undue local competition.
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 EUR 10,000 for a single applicant and additional EUR 5,000 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.
Granting of permanent residency in Cyprus to third country citizens who obtain privately-owned residence in Cyprus for self-occupancy:
Obtaining an Immigration Permit the Ministry of Interior has decided a favourable treatment for all third country nationals who fulfil the following criteria:
a) The applicant must prove that s/he has at his/her disposal a secured minimum annual income (employment in Cyprus is strictly prohibited) amounting to 30.000EURO. The minimum annual income in increased by 5.000EURO for each dependent person. The annual income should be derived from abroad and can include overseas employment income, pensions, rental income etc.
b) The application form (M.67) must be accompanied by a Title Deed or a Contract of Sale that has already been submitted to the Department of Lands and Surveys, for the acquisition of a house, apartment or any other building situated in Cyprus, of a minimum market value of 300.000EURO (excluding VAT). Further, the applicant must submit proof of payment for at least 200.000EURO (excluding VAT) in respect of the above mentioned property. As from 07 May 2013, the Immigration Authorities will only accept applications for granting immigration permits under Regulation 6(2), provided that the above mentioned property is being sold for the first time (i.e. applications regarding resale properties will not be permitted).
c) The applicant must submit a confirmation letter from a Cyprus Banking Institution that s/he has deposited a minimum amount of 30.000EURO which will be pledged for a minimum period of three years. Please note that the amounts mentioned in paragraphs (b) and (c) should be proven to have been transferred to Cyprus legally from abroad.
d) The applicant must submit a clean Criminal Record Certificate, issued by the relevant authorities in his/her country of origin and in general, s/he should not constitute a threat against public order in Cyprus.
e) The applicant must submit a statement confirming that s/he has no intention to work or be engaged in any form of business in Cyprus.
f) The applicant is required to visit Cyprus at least once every two years. Provided that the criteria described above are fulfilled, the application shall be examined by the Minister of Interior in a positive spirit and the Immigration Permit shall be granted. It is estimated that the period for examining the application under the new procedure shall not exceed 1 – 2 months.
It should be noted that an Immigration Permit is equivalent to a Permanent Residence Permit allowing its holders to be exempt from the time-consuming immigration formalities that other categories of third countries citizens who enter Cyprus territory have to go through. For the granting of an Immigration Permit, application is submitted on form M.67 to the Civil Registry and Migration Department directly or through the District Aliens and Immigration Branches of the Police. Applicants who are abroad may submit an application directly to Cyprus or through the local Consular Authorities of the Republic of Cyprus.
Education in Cyprus offers both a state-sponsored education system and prestigious private (international) institutions offering tuition in Greek, English, Russian, French, Italian, Armenian and Arabic. Plus, the providing of specialised courses leading mainly to the entrance of British and American universities or to gaining professional qualifications.
Both are open and accessible to foreigners, and parents usually choose one or the other according to their expectations surrounding cost, language and curriculum.
Education in Cyprus is mandatory for all children aged twelve and younger, and is separated into primary school, ‘Gymnasio’ (lower secondary education) and ‘Lykeio’ (upper secondary education). Secondary school is composed of the latter two levels.
Cypriot educational institutions attract foreign students from all over the world, making the island a major educational centre in the region.
Though the teaching language of state schools in Cyprus is Greek and the curriculum uniquely Pancyprian, parents from a number of different nationalities opt to send their children, especially those of a young age, to these local houses of learning. There is no fee for foreign children to attend state schools in Cyprus.
Resort Common Expenses
Depending on the type and location of the property, Resort common expenses will vary accordingly and they start from €300.00 per year. These expenses include maintenance, utilities and security of the Resort areas.
Property Management Expenses – Villas
In addition to the Resort Common Expenses, each Villa owner may choose to pay management expenses relating to the maintenance and upkeep of common areas for the property such as gardens, swimming pool, cleaning and other expenses. These are calculated based on the size of each unit. The average cost of property management expenses for individual properties starts approximately from €500.00 per year.
Property Common Expenses – Villages
In addition to the Resort Common Expenses, properties which are located in a Village development will pay Common Expenses relating to the maintenance of the development’s common areas such as gardens, communal swimming pool cleaning, rubbish collection etc. These are calculated based on the size of each unit. The average cost of Common Expenses relating to a Village development for 1-, 2-, and 3-bedroom Apartments, starts from €1,300 per year. For Junior Villas the cost starts from €2,500 and for Villas from €3,000 per year.
Electricity & Water Supply Services
Each home is responsible for paying charges for utilities to the respective authorities at regular intervals throughout the year.
Insurance
Comprehensive insurance against fire and associated hazards is provided by Aphrodite Hills Resort Ltd. until the Title Deeds are transferred to the owners, at the cost of €1.30 per €1.000 insured, depending on the value of the insured property. Contents insurance is the owner’s responsibility; the approximate cost is around €1.50 per year per €1.000 insured depending on the type of insurance and the perils covered.
This information leaflet from the Tax Department provides a general guidance on the purchase/construction of a new dwelling in the Republic of Cyprus.
As from the 1st of October 2011, a reduced rate of 5% can be imposed on purchasing or construction of a dwelling in Cyprus, as long as the dwelling is used as the principal and permanent residence in the Republic by the beneficiary.
The reduced VAT rate of 5% applies on the first 200 square meters of the buildable area of the dwelling. In cases of large families (minimum of four children) the total area of the dwelling is enhanced by 15 square meters per each additional child (over three children).
IMPORTANT: Covered verandas + basement is not included in the Square Meters of the property for VAT calculation. The final calculation is subject to Town Planning regulations.
The application must be submitted before the applicants have moved in the dwelling.
If the property is under construction (off-plan) the reduced VAT rate application can be submitted at any time during the construction of the dwelling.
On the approval of the relevant application submitted to the Tax Department an appropriate certificate is issued. The application form is only available in Greek.
If the property is more than 200 m2:
I – 200 m2 fall under 5% II – Rest falls under 19%
Example for 239 m2 property:
2 000 000€ * 200/239 * 5% = 83 682€
2 000 000€ * 39/239 * 19% = 62 008€
Total VAT return for the property will be:
380 000€ – ( 83 682€ + 62 008€ ) = 234 310€ (approximately)
| Documents | |
| 1 | Application (in Greek language) |
| 2 | A copy of civil identity card /passport for foreigners. |
| 3 | A copy of a marriage certificate. |
| 4 | A copy of a spouse’s identity card / passport for foreigners. |
| 5 | Contractor’s annual license for the construction period. |
| 6 | A copy of planning permit (if no, building permit). |
| 7 | A copy of the application for the acquisition of a planning/building permit. |
| 8 | Stamped Sale Contract by the Stamp Duty Tax Commissioner. |
| 9 | Copy of land title deed. |
| 10 | Copy of building permit. |
It is essential to underline that in cases where the reduced VAT rate is granted, the residential property must be used as the applicant’s principal and permanent residence in the Republic for a period of 10 years.
If the beneficiary person ceases to use the dwelling as a place of residence earlier than 10 years he shall, within 30 days from the date he ceases to use it as a place of residence, notify the Commissioner and pay the difference between the amount of tax resulting from the application of the reduced rate (5%) and the standard rate as applicable on the date of supply or construction of the dwelling (now 19%), which accounts for the period he has not used the dwelling for the purposes of residency, except in case of death of the beneficiary person or in case of a transfer by the person entitled to any adult child, as long as the child is not a beneficiary person at the time of the transfer.
