The sun-drenched eastern Mediterranean island of Cyprus, long a popular retirement destination for British expatriates, has enhanced its appeal to wealthy individuals from other countries over the past three-plus years that its Citizenship by Investment Programme has been in force. Russian and Chinese expats in particular are said to be making the island their home, although the citizenship programme doesn’t require residency – just money.
Now, it seems, wealthy Thai nationals are being reminded that an EU passport can be theirs for nothing more than an investment of the Thai equivalent of €5m, a Thai newspaper has reported.
“The country expects to raise capital from Thai investors in prospective sectors including property, energy, oil and gas, infrastructure and tourism,” The Nation quoted Cypriot high commissioner to India Demetrios Theophylactou as saying, in an article last week.
Theophylactou was in Thailand at the time, where he met with Thai prime minister Prayut Chan-o-cha “to encourage trade and other cooperation” between the two countries, the article noted.
It said he pointed out Cyprus’s competitive advantages with other jurisdictions that offer citizenship-by-investment deals as including a lower capital-gains tax and a lower minimum capital requirement, and a diversified and prospering economy.
It also has a useful strategic location in the EU and euro zone, a robust legal and regulatory framework, a well-functioning infrastructure, is easy to do business in, and offers a good quality of life to is residents, Nicosia-born Theophylactou was quoted as having told his Thai hosts.
EU member since 2004
Cyprus, which became a member of the European Union in 2004, introduced its Citizenship by Investment Programme in 2012, in the wake of the collapse of its economy, and revised it in 2013. Like some other EU countries that promote their citizenship schemes, such as Spain and Malta, it has received some criticism from the European Union for “selling” citizenships, but it has defended the practice because it has resulted in significant investment in key sectors.
Also, says editor and publisher of the English-language Cyprus Property News Nigel Howarth, applicants are “screened extensively before being granted citizenship”.
Howarth, whose publication has covered the citizenship programme and its effects on the island’s economy generally and the property market in particular since it began, notes that Cyprus interior minister Socratis Hasikos reported in November that the programme had yielded some €2.5bn in revenues for the government since it began.
Hasikos declined to say how many people had taken up the citizenship, Howarth noted, but he cited data from the European Statistical Office which showed that as of the end of 2014, more than 6,000 individuals had obtained citizenship through the programme, with the majority having come from Russia, the UK and China.
“Shops and restaurants in Paphos, Limassol and Larnaca, the main areas favoured by overseas investors, have signs in Greek, English and Russian, while many of the hoardings on the highways advertising real estate are in Mandarin,” adds Howarth, a Brit who moved to Cyprus himself some years ago.
‘Minimum €5m investment’
Under the Cyprus citizenship scheme, wealthy foreigners may obtain Cypriot nationality if they park at least €5m of deposits into a local bank, or invest an equal amount in shares or bonds in Cyprus, or if they buy property worth at least €300,000. The money used for the scheme must previously have been elsewhere, and not moved within Cyprus to meet the requirements.
Also, applicants for the programme must not work in Cyprus, in order not to compete for jobs with the island’s resident population.