Changes in the citizenship by investment program of Cyprus

Category: English

26 February 2019

Under pressure from the European Commission, Cyprus has announced legal changes that make its CBI programme less attractive.

Firstly, Cyprus has introduced mandatory donations totalling €150,000.

Of this, €75,000 will be paid to the Research and Innovation Foundation and a second €75,000 contribution to the Cyprus Land Development Corporation.

The main advantage of the Cypriot programme is speed. Applications are generally expected to be dealt with in 6 months (vs 18-24 in Bulgaria and Malta). However, the types of investment accepted in Cyprus make it expensive.

Cyprus requires investment in real estate with prices of €2.4m including VAT or more. Unfortunately, the re-sale value of these investments is often much lower, which crystallises investor losses.

The now introduced extra €150,000 of donations make Cyprus more expensive yet.

Cyprus also plans to now require the involvement of international due diligence firms in applicant due diligence procedures. These outsourced providers may add a layer of efficient accountability but also costs.

Compared to both the recently replaced and future Cypriot citizenship-by-investment programmes, the current Bulgarian programme has significant advantages:

  • Far lower costs
  • No donation;
  • Fully recoverable investment - principal can be recovered after the investor obtains citizenship;

The Bulgarian CBI programme is one of the most cost- and time-efficient options to obtain EU citizenship. If you were considering Cyprus as your gateway to Europe, you might want to reconsider and choose Bulgaria.

As we have separately advised, Bulgaria is also under pressure to review its CBI programme and changes may be expected. However, the most likely scenario is that after these, Bulgaria’s programme would still remain the most advantageous in the EU.

As a leading Bulgarian private client law firm, New Balkans Law Office is available to advise you on the best options for you and your family. Contact us.

Read about the Bulgarian Residence and Citizenship by Investment programme

Recent work:

Stopping the improper use of insolvency proceedings

A client of our dispute resolution team (led by Kamen Shoylev and Yordan Neshkov) was recently the subject of an indirect claim by a Bulgarian bank with which this client has been engaged in a multi-stage dispute. Unusually, the bank acted through a vehicle registered in an African state, which made an unfounded claim in the tens of millions of euros against our client and sought the commencement of judicial insolvency proceedings against this client. The offshore vehicle was chosen to isolate the bank from liability and create certain evidential difficulties for our client's representation.

NBLO succeeded in terminating the insolvency proceedings, with direct loss fully awarded to our client. A second claim to recover our client's indirect losses is currently under way.

Where targeted in this way through insolvency proceedings, a company may be prevented from trading properly (e.g., by suffering restrictions on its financing or being unable to participate in public procurement).

Through our considerable experience in insolvency litigation, both entirely domestic and where there are European and cross-border elements, we are ideally placed to assist clients in resisting such attacks and recovering the real and considerable losses that may be suffered.

© New Balkans Law Office 2019