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:
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.
Advising on an LCIA claim
Suppliers with less bargaining power sometimes accede to arbitration clauses which make bringing or defending a claim prohibitively expensive.
In such cases, it is especially important when acting for the potential claimant (and subject to a judgement on the overall viability of the claim), to offer a cost-effective solution to allow the claim to get off the ground. This may include assessing whether the arbitration clause is likely to be found effective or pathological, and whether it may be permissible and advisable to launch court proceedings instead (which can be more economical especially in their early phases).
It is also helpful to be able to rely on advice which is simultaneously excellent in relation to both the jurisdiction in which enforcement is likely to be sought (e.g., Bulgaria) and the jurisdiction whose governing law the parties have agreed to apply or which applies for another reason.
NBLO recently acted for a potential claimant in such a situation alongside the client's existing Bulgarian counsel to advise on the interplay of the arbitration rules of the London Court of International Arbitration (LCIA) and Bulgarian law and on the mechanics and prospects of a claim. We regularly and successfully collaborate with clients’ existing counsel to achieve the best results for such clients.
© New Balkans Law Office 2020