Authorities in Cyprus have recently revoked the citizenship of eight individuals who had obtained their Cypriot citizenship and passports through the controversial Cyprus Investment Program (CIP), commonly known as the “Golden Passport” scheme. This move is part of a broader effort to address the misuse and corruption associated with the program, which has been under intense scrutiny both domestically and internationally.
Background
The Cyprus Investment Program was introduced to attract foreign investment by offering citizenship to non-EU nationals who made substantial investments in the country. This citizenship by investment (CBI) program, which ran from 2013 until its suspension in November 2020, required a minimum investment of €2 million in real estate or other approved sectors. In return, investors and their families were granted Cypriot citizenship, providing them with the benefits of EU membership, including enhanced international mobility and a secure ‘haven’ in the case of turbulences.
Controversies
Despite its financial success, generating over €6.6 billion for the Cypriot economy, the program faced significant criticism for its lack of transparency and regulatory oversight. Investigations revealed that many passports were issued without proper vetting, leading to the naturalization of individuals involved in criminal activities or those who did not meet the investment criteria.
A 2020 undercover investigation by Al Jazeera exposed the program’s vulnerabilities, showing high-ranking officials willing to facilitate citizenship for a fictitious Chinese investor with a criminal record. This scandal led to the resignation of key political figures, the termination of the program, and the launch of investigations by several Cypriot bodies.
Recent Developments
The recent revocation of eight more passports is part of an ongoing review of the program’s beneficiaries. According to the Cyprus Mail, these individuals were found to have obtained their citizenship through fraudulent means or were involved in activities that warranted the withdrawal of their Cypriot nationality.
Although the identities of these individuals were not revealed, the government confirmed that they included both investors and their dependents.
These revocations follow the collection of substantial evidence by investigators examining “suspicious” naturalizations linked to a case involving former Transport Minister Marios Demetriades. Now, the ex-minister, who served under former President Nicos Anastasiades from 2014 to 2018, faces corruption, bribery, and money laundering charges.
An interim investigation in 2021 into the ‘golden passport’ scheme found that 137 naturalizations, promoted by a law firm associated with Demetriades, had been approved during cabinet meetings he attended.
These latest revocations are the first since June 2024, when the government revoked the citizenships of Russian-Ukrainian billionaire and art collector Konstantin Grigorishin and oligarch Igor Kesaev.
The January 2024 reports indicated that Cyprus canceled up to 222 ‘Golden Passports’ since the investigations launched. With recent revocations, the total number of annulled citizenships reached 232.
The Cypriot authorities have pledged to continue its investigations and revoke any citizenships that were improperly granted. This commitment is seen as an effort to restore the country’s reputation and ensure compliance with EU regulations.
The revocation of these passports has significant implications for the individuals involved, as they lose their EU citizenship and the associated benefits, and for the investment migration industry in general. For Cyprus, this move is crucial in rebuilding trust with its European partners and demonstrating a commitment to upholding the rule of law.
While the ‘Golden Passport’ scheme is no longer in operation, the Cypriot government is exploring alternative ways to attract foreign investment without compromising its legal and ethical standards. The focus is on creating a more transparent and accountable framework supporting sustainable economic growth.
Cyprus Golden Visas
In May 2023, the Cypriot authorities updated its ‘Golden Visa’, or residency by investment (RBI) program. It allows foreign investors to obtain permanent residence by purchasing assets worth at least €300,000 in Cyprus and showing an annual income of at least €50,000. For a spouse, the income requirement increases by €15,000 and for each underage or dependent child by €10,000. There are three available investment options:
- Purchasing new residential property from a developer. Commercial properties like offices are also eligible if the money comes from abroad and is paid in full.
- Buying shares in a Cyprus-registered company that employs at least five people.
- Investing in units of the Cyprus Investment Funds Association (AIF, AFLNP, RAIF).
Applicants and their spouses must have a clear criminal record from their country of origin or residence and maintain it in Cyprus.
Annually, Golden Visa holders must submit evidence of maintaining the investment and a health insurance certificate (if not GESY beneficiaries).
Every three years, investors and their family members must submit a clean criminal record from the country of origin and residence.
The Cypriot ‘Golden Visa’ holders are not allowed to acquire permanent residence in another country or be absent from Cyprus for more than two years. Hence, they must visit Cyprus at least once every two years.
Cypriot Golden Visa does not grant the right to work in Cyprus unless investors and their spouses work as directors in the company where they invested €300,000. They can own shares in Cyprus-registered companies and receive dividends.
Family Inclusion
After the 2023 changes, The Golden Visa no longer covers the parents and parents-in-law of the applicant and their spouse. It fully covers minor children, while children aged 18-25 can be included if they are students in a Cyprus tertiary institution, unmarried, and meet the income requirements. They must apply separately for a student visa.
After completing their studies, children can apply for permanent residence if their parents continue to meet the income requirements (€10,000 per child). This permit remains valid even if the child marries or becomes financially independent, but it does not cover the child’s spouse or children.
Adult, and non-dependent children can be included, but the investment amount must be multiplied by the number of children (e.g., €600,000 for one child).
Application Process
Golden Visa applications in Cyprus are processed by the Minister of the Interior and are expected to take about two months. The government fee is €500, plus €70 for each additional person (spouse or children) included in the application. The process includes a thorough Due Diligence and vetting process ensuring avoiding misuse of the program.
Path to Citizenship
Golden visa holders can apply for citizenship after residing in Cyprus for 8 out of 10 years, with the final year being continuous residence, allowing for brief departures.
Conclusion
The ongoing scrutiny and revocation of ‘Golden Passports’ in Cyprus highlight the importance of maintaining integrity and transparency in investment migration programs. While the Cyprus Investment Program has been discontinued, the updated ‘Golden Visa’ scheme aims to attract foreign investment under stricter regulations and ethical standards. By reinforcing due diligence and ensuring compliance with EU regulations, Cyprus is taking significant steps to restore its reputation and foster sustainable economic development. The future of investment migration in Cyprus will depend on the country’s ability to balance economic incentives with robust legal frameworks, ensuring that such programs benefit both the nation and its genuine investors.