Do we want foreign buyers or not?

I have studied the proposal of the new government for how foreigners, from outside the EU, can become permanent residents and I’m trying to understand its purpose. Is the aim to attract individuals or businesses from third countries or to practically prohibit them from residing in Cyprus?

I understand that given past events the matter must be handled carefully, however, the new measures almost rule out the attraction of foreign investors.

The new measures require a third-country resident to have a foreign income of €50,000 per year, plus €15,000/year for their spouse, €10,000/year for underage children and €300,000  for housing and more. That is, the interested party must have an available amount of at least around €450,000, including transfers, VAT, furniture, lawyers and other expenses, plus savings of around €100,000 to cover the initial period of settling in, as well as money for other expenses like cars, schools for any children and so on.

It should be noted that the applicant’s income must come from abroad with the appropriate evidence of continuous income flow and all this being entitled to work in Cyprus (with some exceptions).

In summary, the new proposal,which has not yet been submitted to parliament, includes the following:

• Investment by purchase of a new house or apartment worth at least €300,000 + VAT
• A €300.000 investement in offices/shops/hotels/other real estate (could be resale units)
• Shares in a company with a physical presence in Cyprus with at least five employees
• The permanent residence will be revoked if the applicant ceases to hold their investment without replacing it with another of at least similar value (€300.000)
• The applicant’s income/investment must come from abroad
• The applicant must prove they have an annual income from abroad of €50,000 a year, €15,000/year for a spouse and €10,000-year per child.
• Applicants are not allowed to work except as directors of a company that has invested in Cyprus
• Applicants may purchase up to two residential units provided that the total value exceeds €300.000
• Permanent residents, when they obtain the permit, may be able to join the public health system
• After holding permanent residence for five years, individuals can apply for a Cyprus passport.

What is strange is that the applicant will have to prove that he has an income of €50.000 and the rest, even if they have deposits in a bank of €2 million.

Not even the Ministry of Interior seems to know all the details as it could not provide a document with details when requested.

Basically, the plan targets current foreign investors outside the European Union – mainly British, Lebanese and Israeli, many of whom invest in the Cypriot economy.

The decision of the Ministry of Interior on the new measures is difficult to understand. Clarifications are needed to avoid Cyprus becoming a ridiculous country in the eyes of the rest of the world. The silence from developers, lawyers, audit firms and real estate agents, who have every reason to protest, is striking.

Antonis Loizou & Associates EPE – Real Estate Appraisers & Development Project Managers, www.aloizou.com.cy, [email protected]