The economic recovery was helped by a resurgent tourist trade and real estate market after the government relaunched its economic citizenship programme in 2014. This contributed to a huge surge in demand for luxury apartments and homes in coastal areas and town centres. Property sales rose by a reported 24% between 2016 and 2017, with over a quarter of new purchases being made by non-Cypriots, which has also had the effect of pushing prices up whilst boosting the construction sector. Trade and tourism Agriculture has remained a strong sector for Cyprus, with citrus, potatoes and cheese amongst its main exports. In 2017, agriculture contributed 2.3% to GDP, while industry contributed 11% and services 86.7%. Cyprus imports more products than it exports, but a 27% growth in exports during
2018 helped reduce the annual trade deficit by over 13%. The island’s geographical location and its proximity to the Suez Canal has greatly benefitted its economy as many ship management companies have established offices in Limassol. Cyprus has one of the world’s top ten merchant fleets with more than 1,600 ships sailing under the Cypriot flag. Each of the past five years has seen an increase in the number of international tourists heading for Cyprus. 2018 saw a record breaking 3,938,625 tourist arrivals according to Cystat, an increase of 7.8% over 2017’s total of 3,652,073 and over 63.7% higher than 2013. The highest number of inbound tourists come from the UK (36% in 2018) followed by Russia (22%). The total contribution of travel and tourism to Cyprus’ GDP last year was 21.9% and generated around 22% of employment.
Fuel for growth Looking to the future, large gas fields were discovered off the Cypriot coast in 2011 in Aphrodite Field and industrial gas production is expected to begin in 2022. Egypt also discovered a large gas field in 2015 adjacent to the Aphrodite field and has been in discussions with Cyprus about a shared undersea pipeline. In February 2019, US energy giant ExxonMobil confirmed it has discovered a huge natural gas reserve off the south coast of Cyprus within the island’s Exclusive Economic Zone (EEZ) and there is speculation that the find could prove to be a game-changer in the region’s energy resources, even potentially helping to resolve the ongoing dispute with Turkey over the island’s partition.
CITIZENSHIP BY INVESTMENT Cyprus first introduced its Citizenship by Investment programme in 2002 but with a highly prohibitive minimum entry figure of €15 million. In the wake of the 2012/13 financial crisis, the government effectively relaunched the programme in May 2013 and every year since has seen an increase in the number of applications, coming mainly from Asia, the Middle East and Eastern European countries. The minimum investment was reduced to €2,000,000 in 2016, and a further review in May 2018 put a cap of 700 approved new applicants a year under the Cypriot Investment Programme (CIP) and tightened up on due diligence. With the number of yearly applicants soon reaching the self-imposed cap for approvals in 2018, the Council of Ministers approved further amendments to the CIP effective from 15 May 2019. To qualify for the scheme, applicants must meet the following requirements: • Own or purchase a permanent private residence in the Republic of Cyprus valued at €500,000+ • Possess a valid passport and have a valid Schengen Visa
56 Citizenship By Investment
• Not have been refused for citizenship by another EU member state • Invest €2,000,000 in real estate property development, infrastructure projects or in businesses recognized under the Registered Alternative Investments Organisations (UCITS) including investment made within the Cyprus shipping industry. (The option to invest in government bonds has now been abolished) • Furthermore, the investment is required to be maintained for a period of at least five years from the date of naturalization, whereas previously the period was three years • In cases where residential property is acquired and had already been used for the purposes of the CIP, the required investment amount increases from €2 million to €2.5m • A donation of €75,000 must be made to the ‘Research Promotion Foundation’ • A donation of €75,000 must also be made to the ‘Cyprus Land Development Corporation’.
Residency Visas One of the fastest ways of securing residency in Cyprus is via the family residency visa, also known as a ‘golden visa’. The minimum investment level for non-EU citizens is just €300,000 in brand new real estate and the residency visa is usually granted within just two months. This covers all the family including parents of both the main applicant and spouse and dependent children up to the age of 25. Benefits of Cyprus permanent residency • Visa-free entry to 173 countries including freedom of movement throughout the European Union • There are no language requirements and no requirement to live in Cyprus, although a visit to Cyprus once every two years is required to maintain residence status • Cyprus allows dual nationality • Citizenship is also passed on to dependents and future generations subject to basic documentation • Advantageous tax system for businesses; corporate tax rate in Cyprus is 12.5%.