Cyprus Permanent Residency

Cyprus Permanent Residency is a legal status pursuant to which a third-country national and his/her qualifying dependents may enter and stay as permanent residents in Cyprus.  Such permit applies for life, without any renewal requirements.The legal basis of the permanent residence scheme is Regulation 5 and Regulation (2) of the Alien and Immigration Regulations.

Permanent Residency by Investment allows Non-EU national with sufficient income from abroad the right to permanently reside in Cyprus, with such permit applying for life, without any renewal requirements.

The Cyprus Permanent Residency has several main categories, with the main ones being:

1. Purchasing property in Cyprus (via the fast-track procedure or regular procedure); or
2. Granted to applicants (and family members) who have legally resided in Cyprus for a continuous period of more than 5 years.

A. Cyprus Permanent Residency via the “fast-track” procedure by investment (Fast Track Permanent Residency under Regulation 6(2))

Obtaining Cyprus Residency Provides an Array of Benefits

• Immigration Permit under Regulation 6 (2) grants a Non-EU national the right to permanently reside in Cyprus, with such permit applying for life, without any renewal requirements;
• Permanent Residency Permit can be extended to the whole family: the applicant’s spouse, their children and their parents;
• Fast track application procedure – all submitted applications can be reviewed and approved within 3 months from the date of submission;
• Obtaining the Cyprus Permanent Residency Permit (“PRP”) provides the opportunity to obtain the Cyprus citizenship after completing 5 years (total of 1825 days) of legal stay in Cyprus;
• Cyprus is an ideal location for international business: it has a favourable corporate tax structure, a comprehensive double tax treaty network, stable economy, high level professional services industry with a highly trained professional labour force, English language widely spoken from the vast majority of professionals in Cyprus;
• High quality of living with guaranteed sunshine: low cost of living, top 5 safest country in the world (Value Penguin 2015), high quality of healthcare, 320 days of sunshine per year;
• PRP holders might be eligible to apply for becoming Cyprus tax residents with the advantage of being exempt from taxation of dividends and interest earned for a period of 17 years after becoming Cyprus tax resident, as well as exempt from tax on profit arising from the sale of securities that include shares, bonds, debentures and others;
• No Inheritance Tax.

Procedure and Processing Time

The Permanent Residency application and legal documents must be prepared and submitted to the Civil Registry and Migration Department. The applications are reviewed by the Civil Registry and Migration Department and the Ministry of Interior grants final approval within 3 months from the date of filing.

The Cyprus Permanent Residency Permit can be received within 3 months of the submission of the application, if all necessary investment criteria have been met, as per below.

Types of Investment in order to obtain the Cyprus Permanent Residency

The applicant must make an investment of at least €300,000 in one of the following investment categories:

(A) Investment in a house / apartment: Purchase of a house or apartment from a company of property development, that is a first-time sale for at least €300,000 (plus VAT). This should not be a resale property.

(B) Investment in real estate (excluding houses / apartments): Purchase of other types of real estate such as offices, shops, hotels or similar developments or a combination of these with a total value of €300,000. These properties can also be resold.

(C) Investment in the share capital of a Cyprus Company with activities and personnel in Cyprus: An Initial investment worth €300,000 in the share capital of a newly registered company in Cyprus or an increase in the share capital worth €300,000 of an existing company registered in Cyprus, based and operating in Cyprus and having a proven physical presence in Cyprus, and employing at least five (5) people.

(D) Investment in shares of Cyprus Investment Funds (AIFs, AIFLNPs, RAIFs): Investment worth €300,000 in units of Cyprus Investment Funds.

Any disposal by the permit holder of their investment without the immediate replacement with another investment that would qualify under the aforementioned criteria and of the same or greater value will lead to the cancellation of the permit.

Notes about Investment in a property in Cyprus for €300,000 (points A and B above)

• The sales agreement must be registered with the Land Registry with payment of €300,000 plus VAT. Such payment must be made to the bank account of the seller in Cyprus, with the funds transferred from overseas account of the applicant, regardless of the date of delivery of the property so properties under construction can be included.
• It is noted that the funds used for the investment must be proved to have been transferred to Cyprus from abroad, from the applicant’s or/and his/her spouses bank account, provided the spouse will be included as a dependent person in the application. The investment amount should be paid from the applicant’s bank account to the seller’s account in a Cyprus financial institution.
• The money from abroad that will be used for the investment can also be transferred to Cyprus from a company’s bank account, in which the applicant and/or his/her spouse are the sole shareholders, provided that the shareholder is included in the application. The same applies to the amount of the investment’s value to be paid into the seller’s account at a Cypriot financial institution.
• The property can be bought in the name of a Company that is incorporated legally in the Republic or any member-state of European Union or of European Economic Area whose absolute owner or ultimate beneficiary will be the applicant and/or his/her spouse.
• The investor may buy up to two (2) properties provided the total sales price is as mentioned above and can be any of the following combinations:
  • One residential property (house or apartment) €300,000 in value;
  • Two residential properties (houses or apartments) totaling €300,000 in value;
  • Offices, hotel buildings, or other realty of at least €300,000 in total value.
• The presence of the applicant is not mandatory at the time of the purchase, and can be facilitated by his/her legal representatives. The delivery date of the property is not relevant, and therefore residential properties under construction at the time of application can be included.
• If the applicant wishes to sell the residential property, he/she must replace it with another that has equal or higher value.

Annual Income

The applicant must provide evidence of annual income of at least €50,000 originating from abroad (increased by €15,000 for applicant’s spouse and increased by €10,000 for each dependent child included in the application). 

This income may stem from salaries for work, pensions, dividends, deposit interest, rents, etc., coming from outside of the Republic, which will be proven only through the tax return / tax declaration of the applicant from the country in which he declares to be a tax resident, in the case where the applicant chooses to invest as per point (A) above – namely, investment in a house / apartment. In calculating the total income, the income of the applicant’s spouse can also be taken into consideration.

In cases where the applicant chooses to invest as per points (B), (C) or (D) above, the applicant’s total income or part of it may also result from sources from activities within the Republic, provided that he is taxed in the Republic.

Family members

The following persons can join the PRP application:

• The main applicant’s spouse and children under 18 years old;
• Adult children between 18 and up to the age of 24 years old (before their 25^th birthday) if they fulfill the following:
  • They are financially dependent on the main applicant;
  • They are not married;
  • They are enrolled students in university abroad with a minimum of 6 months remaining study period from the date of the submission of the application;
  • Prove additional annual income of €10,000 for each child.

Future spouse or child cannot be added as dependents on the PR application. 

Children who wish to study in Cyprus must apply for a temporary residence permit as students, and upon completing their studies in Cyprus regardless of their age, they are eligible to apply for the PRP if an additional annual income of €10,000 is shown.

If the children are students in Higher and Higher Education Institutions of the Republic of Cyprus, they must apply for a temporary residence permit in the Republic as students under the relevant legislation (EU Directive). After completing their studies in Cyprus, they will be able to submit their own application for an Immigration Permit, regardless of their age, with the only condition that the parents shall show an additional annual income of €10,000 is shown.

The Permit will continue to be valid for children even after reaching the age of 25 even if the child is still not single and / or a student and / or financially dependent on his or her parents. It is understood that the spouse and their minor children will not be able to be included as dependents in this permit.

Higher value investment to include adult children

An Immigration Permit may also be granted to adult children of the applicant who are not financially dependent, under the condition that an investment of higher value has been made, on the basis of the conditions specified below:

The market value of the investment of €300,000 should be multiplied according to the number of adult children, who will rely on the same investment for the purpose of obtaining an Immigration Permit. For example, in case the applicant has an adult child, he should make an investment worth €600,000, if he has two adult children, the investment value should amount to €900,000, etc.

In case the investment will concern the real estate market, i.e. where the applicant chooses to invest as point (A) and point (B) above, together with the application the applicant must submit a payment confirmation of at least 66% of the market value of the properties.

Provided that, in such a case, each adult child will be able to prove that he has at his disposal an insured annual income of at least €50,000, which will be increased by €15,000 and €10,000 respectively for each dependent person, in accordance with the aforementioned provisions. In addition, it is noted that the investment can be made jointly in the name of the applicant and the adult child or exclusively in the name of the applicant.

It is pointed out that, in cases where the number of bedrooms of the investment property cannot satisfy the needs of the dependent members of the applicant’s family, the applicant should indicate another property or properties which will constitute the residence of the dependent members of the applicant’s family (e.g. title deed, a sale agreement, a rental agreement). 

Other conditions

In addition to the above financial criteria, the applicant, his/her spouse, their dependents and their parents must fulfill all of the following criteria:

• Clean criminal record.
• The applicant and the dependent members of his family must provide a Health Insurance Certificate for medical care that covers inpatient and outpatient care.
• Visit Cyprus within 1 year of issuance of PRP to obtain the actual permit and provide their biometrics to the authorities, and subsequently visit Cyprus once every 2 years.
• The applicant and his / her spouse must certify that they do not intend to work in Cyprus with the exception of their employment as Directors in a Company in which they have chosen to invest under this program.
• In cases where the applicant’s investment is not in a Cyprus Company, the applicant and / or his spouse may be shareholders in Companies registered in Cyprus and the dividend income in such companies may not be considered as an obstacle for the purposes of obtaining the Immigration permit. They may also hold the position of Director without remuneration in such Companies.
• Declare they have secured annual income from abroad.
• The applicant’s name is not included in the list of persons whose property is ordered to be frozen by the EU.
• Should not be regarded as danger to the public order/security of Cyprus.
• In cases where the applicant chooses to invest as per points (B), (C) or (D) above, the applicant must present information on the residence of himself and his family members in the Republic (e.g. title deed, a sale agreement, a rental agreement).
• In case where the applicant chooses to invest as per point (A) above, but the number of bedrooms in the investment property cannot meet the needs of dependent members of his family, he should indicate another or other properties that will be the place of residence of the depended members of his family (e.g. title deed, a sale agreement, a rental agreement).

Annual obligations to ensure compliance with the criteria and maintenance of the investment

The applicant is required to submit to the Civil Registry and Migration Department, on an annual basis from the date of obtaining the Immigration Permit, evidence proving that he maintains the following:

• The initial investment;
• The required secured annual income that has been designated for him and his family;
• That the applicant and the members of his family hold health insurance certificate in case they are not covered by the General Health System (Gesy);
• Clean criminal record for the applicant and his adult family members from their country of origin and from their country of residence.

In case the holder of the Immigration Permit fails to submit or verify the above, the Immigration Permit will be withdrawn for the applicant and the members of his family.

B. Cyprus Permanent Residency via the “regular” procedure (Category F application under Regulation 5)

Upon renting out a home or purchase of a property (house or apartment), a third-country national may apply for permanent residency permit via the Category F application.

Purchase property

Unlike the Fast Track Permanent Residency, Category F does not have a strict requirement for the purchase of a property. It is recommended to purchase a property in Cyprus of any amount. There is no need for such property to be a new property from a developer, and there is no requirement for the money for the purchase of the property to be transferred from an overseas account of the applicant. Category F is flexible since it allows of renting out a house prior to outright purchase.

Annual Income

The applicants must possess and have fully and freely at their disposal a secured annual income of at least €9568,17 for a single applicant and moreover at least €4613,22 for every dependent person, but the Immigration Control Board may demand additional amounts as necessary. This income must be derived from legally accepted sources from abroad and can be from salaries, pensions, stock shares, rents.

Bank Deposit

The applicant should deposit in his/her Cyprus bank account an amount between €15,000 to €20,000. Such amount does not need to be pledged or be fixed deposit, and can be used after the application.

Family members

Unlike the Fast Track Permanent Residency, only children up to the age of 18 can apply as dependent. When the children become 18 years old, their permanent residency under Category F will no longer be valid. The parents of the applicants are not eligible to apply as dependents.

Other conditions

In addition to the above financial criteria, the applicant, his/her spouse, their dependents and their parents must fulfil all of the following criteria:

• Clean criminal record;
• Visit Cyprus once every 2 years or the residency permit will be automatically cancelled;
• Declare the intention not to be employed in Cyprus (applicants can be shareholders in a Cyprus Company and receive dividends);
• The annual income is derived from legally accepted sources from abroad, is secure and provides stable support for the applicant and family in the long run (supporting evidence will be necessary);
• No sanction order to have been made against applicant or any dependants.

Main disadvantage of Category F is that its processing time is between 12 to 15 months (officially it may take longer than that), and children of the applicant lose their permanent residency once they become 18 years old.

C. Permanent Residency by EU citizens and their family members (with family members being EU citizens or third country nationals)

The application for the issue of a Permanent Residence Certificate is submitted by an EU citizen and family members also EU citizens of an EU Member State, after a 5-year period of uninterrupted legal residence in the Republic of Cyprus. The application for the issue of a Permanent Residence Card is submitted by the Family Members who are not citizens of an EU Member State, within 1 month after the expiration of validity of the Residence Card.

The validity of the Permanent Residence Card shall not be affected by temporary absences not exceeding 6 months in a year, or by absences of a longer duration for compulsory military service or by one absence of a maximum of 12 consecutive months for important reasons such as pregnancy and childbirth, serious illness, study or vocational training, or a posting in another EU Member State or a third country.

Once acquired, the right of Permanent Residence shall be lost only through absence from the Republic of Cyprus for a period exceeding 2 consecutive years.

The Republic of Cyprus shall issue family members who are not EU citizens but entitled to permanent residence a Permanent Residence Card valid for 10 years which shall be renewable automatically every 10 years from the date of issue upon request of the person concerned and with the payment of a fee of €20.

D. Permanent Residency by marriage to Cypriot citizen

Third country nationals that are married to Cypriot citizens are eligible to apply for the Cyprus residency permit. This also applies for the following family members of a Cypriot citizen and his spouse:

• their children under 18 years old from a previous marriage;
• their parents-in-law.

E. Long-Term Residency by 5 years of stay

Third country nationals (including family members of European Union citizens not covered by the Right of Union Citizens and their Family Members to Move and Reside Freely within the Territory of the Republic Law No. 7(I)/2007) may apply for the so called “long-term residence permit” if they resided legally and continuously in Cyprus for at least 5 years prior to the submission of the application and having held a temporary resident permit for the entire preceding 5-year period.

F. Immigration permits for owners and employees of companies of foreign interests

Pursuant to Regulation 5 of the Alien and Immigration Regulations, owners and employees of companies of foreign interests can apply for the following immigration permits:

Category C: Persons who intend to work as self-employed in a trade or profession in Cyprus, provided that they have in their possession a relative permit, they have fully and freely at their disposal capital of approximately €260,000 and such an employment should not affect negatively the general economy of Cyprus.

Category E: Persons who have been offered permanent employment in Cyprus, which will not create undue local competition.

Our Legal Services

We provide guidance, preparation and representation through all the procedure for any of the above permanent residency applications, long-term residence permit and immigration permits:

• Legal advice on the applicable legislation;
• Advice on the financial requirements to be met in relation to the application;
• Assistance with finding the right property for the relevant type of application via our network of reputable licensed real estate agents and developers;
• Preparation and drafting of all necessary legal documents, including agreements connected with the purchase of real estate property in Cyprus;
• Advice on and collection of required documents for the application;
• Preparation and submission of the application;
• Assistance with the opening bank accounts at local Cyprus banks;
• Keeping you updated about the status of the application;
• Collection of the PPR Cards and Residence Cards.

Please feel free to contact us if you have any question and to discuss how we can be of assistance to you.

DISCLAIMER:

PARIS MAVRONICHIS & CO LLC accept no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

The material contained herein is provided for informational purposes only and does not constitute legal advice nor is it a substitute for obtaining legal advice from an advocate.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced advocate. PARIS MAVRONICHIS & CO LLC will be glad to assist you in this respect.