Programme as an Incentive in Investing in Real Estate Pantelis - - PowerPoint PPT Presentation

The Cyprus Residency and Citizenship Programme as an Incentive in Investing in Real Estate

Pantelis Christofides Partner, L. Papaphilippou & Co LLC, Cyprus 12th September 2017

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Investing in Security

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• Ranked 5th overall around the globe and 1st among smaller Countries in the Safest

Countries in the World rankings for 2015 (see http://www.valuepenguin.com/2015/07/safest- countries-world).

• The study took into account, among other, the factors of population, national police personnel,

traffic deaths, thefts, assaults, and life expectancy.

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Investing in Security – Homeland Security

• The EU Treaties guarantee all EU citizens the right to equal treatment regarding

protection from the diplomatic and consular authorities of any Member State when they are travelling or living outside the EU and their own country is not represented, on the same conditions as to their own nationals (Articles 20(2)(c) and 23 of the Treaty on the Functioning of the European Union (TFEU); Article 46 of the EU Charter of Fundamental Rights).

• Council Directive (EU) 2015/637 of 20/04/2015 on the coordination and cooperation

measures to facilitate consular protection for unrepresented citizens of the Union in third countries (last transposition date 01/05/ 2018; Republic of Cyprus being the first EU Member State to transpose it on 20/03/2017)

• Unrepresented citizens shall be entitled to seek protection from the embassy or consulate of any

Member State on the same conditions as to their own nationals under Articles 2(1) and 7(1).

• Consular Protection may include assistance, among other, in the following situations (Article 9):

(a) arrest or detention; (b) being a victim of crime; (c) a serious accident or serious illness; (d) death; (e) relief and repatriation in case of an emergency; and (f) a need for emergency travel documents.

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Investing in Security – Travelling/Living Abroad

• Contract Law as well as Judicial System based on English Common Law
• Duty on Advocates to perform Legal Due Diligence concerning the acquisition of real estate

property

• Right of Specific Performance in relation to a real estate contractual agreement with registration

before the Department of Lands & Surveys

• Issue of Title Deed

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Investing in Security – Legal Security

• 62 Double Tax Agreements with other States around the globe (as of 01/08/2017)
• Signatory to the OECD Convention on Mutual Administrative Assistance on Tax Matters and Protocol

Thereof - entered into effect 21/11/2014.

• Inter – Governmental Agreement (I.G.A.) bringing U.S.A. Foreign Account Tax Compliance Act

(FATCA) into effect in the Republic of Cyprus - signed on 02/12/2014.

• Signatory to Multilateral Competent Authority Agreement on Automatic Exchange of Financial

Account Information (CRS) – into effect on 01/01/2016.

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Investing in Security – Financial Security

Real Estate ownership through the Cyprus Citizenship by Exception Programme

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Programme for Naturalization of Investors in Cyprus by Exception on the basis of subsection (2) of section 111A of the Civil Registry Laws of 2002-2015, in accordance with the Council of Ministers Decision dated 13/09/2016. Ranked 7th Globally and 1st in EU by Guide to Global Citizenship – Special Report June/July 2017 – Financial Times in association with CS Global Partners (available online at http://cbiindex.com/):

• Cyprus acts as gateway to EU (page 7)
• Cyprus received the best score out of any European nation, distinguishing itself for its attractive

travel and residence requirements (page 23)

• Cyprus, with its investors’ programme, seems to offer a clear path to citizenship, once the KYC

hurdle is gone through (page 7)

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Citizenship by Investment – Legal Background

 Cyprus/European Citizenship: For applicant, spouse and financially dependent children up to the age of 28. With an additional investment of €500.000 the parents of the applicant can qualify as well.  Investment choice: Gives the right to the investor to choose from a variety of investment options and structures.  Dual citizenship is legally permitted  Straightforward process: The application is examined within 3 months from submission

• f the citizenship and residency application and the applicant is allowed to apply for the

Cypriot passport after the 6 months the residency is completed.

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Citizenship by Investment – Key Points

1. Investment of €2M in one or more of the eligible Investment Options. 2. Purchase of immovable residential property of €500.000 plus VAT (if applicable), in addition to the investment (with certain exceptions). 3. Clean Criminal Record from country of origin (and from country of residence, if different). Available structures of investment: 1. personally, or through a company/ companies in which he/ she participates as a shareholder, or 2. through investments done by his/her spouse or jointly with the spouse.

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Citizenship by Investment – Eligibility Criteria

Criterion A.1 €2M investment in real estate, land development and infrastructure projects, or Criterion A.2 €2M investment in the purchase, establishment or participation in businesses or companies, which are based and operate in Cyprus employing at least 5 CY/EU citizens,

• r

Criterion A.3 A) €2M investment in units of Alternative Investment Funds regulated by Cyprus Securities and Exchange Commission (CySEC) or B) €2M investment in purchase of financial instruments/assets of Cypriot companies (bonds/securities/bills) Criterion A.4 €2M aggregate investment in any two or more of the investments referred to in A.1, A.2 or A.3. This criterion includes also a maximum investment of €500.000 in government bonds.

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Citizenship by Investment – Investment Options

 Investors may liquidate their investment upon the lapse of 3 years from the date of the issue of the certificate of naturalization.  Residential property must be maintained (but may be replaced, at the investor’s option with another residential property of same or higher, value).  The residential property may be rented to any third party after the approval of the naturalization certificate.

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Citizenship by Investment – Exit Strategy

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Citizenship by Investment – Examples in Real Estate Investment

Investment of €2M plus VAT in one brand new residential house Investment of €2M in one used residential house Investment of €2M plus VAT in 4 brand new residential apartments Investment of €2M in 4 used residential apartments Investment of €1.0M in Commercial Property plus the purchase

• f a residential

property of €1.5 (plus VAT if applicable)

Note: If the Applicant has invested in housing unit(s), the purchase of another permanent residence in Cyprus will not be required, if at least one of those units is worth €500.000 (plus VAT if applicable).

€2M Investment in Real Estate or Land Development or in Infrastructure Projects

Real Estate ownership through the Cyprus Permanent Residency Programme

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Cyprus Permanent Residency under Regulation 6.2 of the Aliens and Migration Regulations, in accordance with the Council of Ministers Decision dated 22/02/2016.

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Cyprus Permanent Residency – Legal Background

1. Maintain a fixed term deposit in a Cyprus Banking Institution of €30,000 for three years 2. Prove a secured annual income of at least €30,000 generated from sources abroad (plus €5,000 for each dependent person and €8,000 per dependent parent or in-law parent) 3. Purchase a housing unit or a combination of a housing unit and a shop/office or two housing units in Cyprus of total market value of at least €300.000 (plus VAT) for a Cyprus development company. The application can be filed if the amount of at least €200.000 (plus VAT) has already been paid. Other Conditions 1. Have a clean criminal record 2. Visit Cyprus once every two years 3. Declare the intention not to be employed in Cyprus (applicants can be shareholders in a Cyprus Company and receive dividends)

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Cyprus Permanent Residency – Eligibility Criteria

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Contact Pantelis Christofides pc@papaphilippou.eu Contact us L PAPAPHILIPPOU & CO LLC Advocates & Legal Consultants 17 Ifigenias Street 2007 Strovolos P.o.Box 28541 2080 Nicosia, Cyprus Telephone +357 22271000 Fax +357 22271111 info@papaphilippou.eu www.papaphilippou.eu