The House on Friday passed a law giving MPs a say over honorary naturalisations and on who could be granted golden visas.
The law will come into effect on January 31, 2020 to give the government time to set the regulations.
Greens’ MP, Giorgos Perdikis, whose party proposed the bill, said that parliament has been concerned with the issue of the golden visas since 2014 when he put the issue up for discussion, but that it resurfaced during the last few months as Cyprus has been targeted because there was an upsurge in the honorary naturalisation of investors.
According to the law, honorary naturalisations for reasons of public interest and naturalisations for investors who are third-country nationals will be permitted under terms and preconditions set by regulations tabled to the House for approval and which will be published in the Official Gazette.
Perdikis said there were sectors of the economy in need of investment such as research and innovation and agriculture, but none of them existed in the citizenship by investment scheme. The government’s investment plan was limited to building luxury residences, most of which were related to the construction of the high-rises in Limassol.
He also said that the law he proposed aimed to contribute creatively to this policy. Prior to the vote, he urged the House to take a step to defend the prestige of the Republic of Cyprus.
Disy leader, Averof Neophytou, said that the scheme in question had been introduced by the Demetris Christofias administration and that, since, it has been improved but that when necessary, more corrections would be made.
He said that there ought to be scrutiny for every third-country national applying for the citizenship by investment scheme.
“If Germans are concerned over who enters the Republic of Cyprus, Cypriots are concerned twice as much as to who makes investments,” Neophytou said.
The investment scheme is not just for the construction sector, he said. “We should give the same incentive to invest in start-ups and introduce an amount as a fee for support to and housing for the lower social strata.”
In a report last week, the European Commission had warned that programmes of EU states, including Cyprus, to sell passports and visas to wealthy foreigners could help organised crime groups infiltrate the bloc and raise the risk of money laundering, corruption and tax evasion.
The EU report on so-called “investment migration” highlighted shortfalls in the Cypriot and Maltese schemes which do not sufficiently check the origins of wealth of individuals and do not allow their easy identification.
The government said this week that it would not accept Cyprus being “victimised” over its investment activities and that it was in constant contact with the European Commission, to make sure it adopts the best international practices, but also defend the country’s right to apply its own policies.
President, Nicos Anastasiades, told European Commission Vice-President Jyrki Katainen who was on the island on an official visit, that the government had recently tightened procedures for its citizenship-by-investment scheme.
Among these, the hiring of specialised firms tasked with carrying out due-diligence forensics on passport applicants.
Katainen called for a standardised process across the bloc to ensure proper vetting of non-EU nationals seeking to acquire residence permits or passports.