IS BUYING A PROPERTY IN CYPRUS A GOOD INVESTMENT?
As a large Mediterranean island, Cyprus boasts long stretches of gorgeous beaches, a tranquil lifestyle under the sun, and reasonably priced luxury villas. This makes it incredibly tempting for expats to buy real estate in Cyprus, with most families choosing to either relocate or possess a second home in this piece of paradise.
For many years Cyprus has been a popular destination for Lebanese investors who are seeking to pursue business opportunities and/or set up a second home for their families due to the geographical and cultural proximity of Lebanon and Cyprus, as well as the island’s popularity as a close-to home safe getaway. Due to the constant political instability, the impact of COVID-19 and the economic downturn that Lebanon is facing, Cyprus is experiencing a considerable increase in enquiries from Lebanese nationals in relation to the Cyprus’s Permanent Residency Programs.
In addition to Cyprus’s competitive legal and tax framework, Cyprus Permanent Residency programs, allows non-European Citizens to legally reside in the Republic and provide their families with stability, safety and higher quality of life.
OWNING CYPRUS PROPERTY: TOP BENEFITS
- Housing market that is optimal for foreigners.
- Real estate investments in Cyprus gains you a legal residency or a passport.
- Low property taxes.
- Huge international community.
- World-class beaches.
- Excellent transport links to the rest of Europe.
SPOTLIGHT ON LIMASSOL
In 2014, Limassol was named by TripAdvisor as one of its Top Ten Destinations on the Rise, and the city has been growing in popularity ever since.
Its sun-soaked beaches and bustling nightlife make Limassol a hot destination year-round.
Limassol has become Cyrpus’ main hub for international business. The country is emerging as a prime financial centre in the Mediterranean, and Limassol is at its heart.
With easy access to two international airports, Larnaca and Paphos, contemporary hotels and business centres, Limassol is an ideal gateway for business and investments to Europe, Asia and the Middle East.
A beachfront oasis for the digital age, the city’s network connections are fast and reliable.
TWO TYPES OF PERMANENT RESIDENCY PROGRAMS
PERMANENT RESIDENCY CATEGORY (6.(2)) (FAST TRACK)
Investment Criteria:
- The Investor must purchase a house or apartment from a development company, which should concern a first sale of at least €300,000 (plus VAT).
- The Investment can be for any other types of real estate such as offices, shops, hotels or related estate developments or a combination of these with a total value of €300,000. The purchase of interest can be the result of a resale.
- The Investment of €300,000 can be in the share capital of a company registered in the Republic of Cyprus, based and operating in the Republic of Cyprus and having a proven physical presence in Cyprus and employing at least 5 people.
- The Investment of €300,000 can be in units of the Cyprus Investment Organization of Collective Investments (forms of AIF, AIF LNP, RAIF)
- The Investor must be able to prove that he/she has at his/her disposal a secured minimum annual income amounting to 30.000 euro, which will be increased with 5.000 euro for each dependent family member and to 8.000 euro for each dependent parent (of the applicant and/ or his spouse). In calculating the total amount of income, the spouse’s income may also be taken into account.
- Evidence must be provided that the investment money for a house/apartment has derived from abroad.
Examination Procedure:
- The applications, accompanied with the required documents, are submitted to the Civil Registry and Migration Department and the Minister of Interior will grant the final approval.
- The examination period of the application from the date of submission will be approximately two (2) months (fast -track).
Dependent Persons:
- The Permanent Residency Permit issued to the applicant covers as dependents persons the spouse and children under the age of 18.
- Unmarried children between the ages of 18-25 and who are financially dependent on the applicant, can submit their own application for the Permit.
- The Permit may also be granted to the children of the applicant over the age of 18 who are not financially dependent on the applicant, on a higher value investment.
- Additionally, the applicant’s parents and parents-in law can proceed with the submission of separate applications.
Conditions and Specifications:
- Employment in Cyprus is strictly prohibited; the annual income must be derived from sources abroad. (Pensions, dividends, employment income)
- The applicant and/or spouse may be a shareholder(s) in a company incorporated under the laws of Cyprus. Income deriving from the Company in the form of dividends is not deemed an impediment for the purpose of obtaining an Immigration Permit.
- The investor must visit the Republic of Cyprus at least once every two years. (and all the family members that are included in the applicant’s permit)
- The applicant’s presence in Cyprus is not necessary during the examination of this application.
PERMANENT RESIDENCY CATEGORY (F)
Criteria:
- The applicant must possess and have fully and freely at their disposal a secured annual income of at least €20,000, without having to be engaged in any business, trade or profession during their stay in Cyprus. For every dependent person this amount must be increased for a t least €5.000 more.
- The purchase of a property can be of any value and the rental of a property can be an option as well.
- Under this Category, the applicant and his spouse are not allowed to engage in any form of business or employment in Cyprus.
Examination Procedure:
- The processing time for this type of application can take approximately 18 months from the submission date.
- The applications, accompanied with the required documents, are submitted to the Civil Registry and Migration Department and t he Minister of Interior will grant the final approval.
Dependent Persons:
- An application consists of the applicant, his spouse and children under 18 years old. Any children who are 18 years old and over must submit a separate application.
- Persons who are 18 years old and above cannot apply for PR if they are studying at an educational institution in Cyprus.
Conditions and Specifications:
- If, at the time of applying for Permanent Residency in Cyprus, the applicant and/or his spouse have Permanent Residency in a country other than their country of origin then their application in Cyprus may be rejected.
- Once the Permanent Residency is granted, the applicant and his family must visit Cyprus at least once every two years in order for their status to remain valid.
- The Permit will be automatically cancelled if the applicant fails to acquire residence in Cyprus within one year from the approval of the application, incase he/she is residing outside Cyprus. It will also be cancelled if he/she acquires permanent residence abroad or be absent from Cyprus for a period of two years.
- The applicant’s presence in Cyprus is not necessary during the examination of this application. If the applicant and his family wish to stay in Cyprus until their application is examined, then they must make another application for a Temporary Residence Permit as a ‘Visitor’.
LEBANON CORRUPTION
• Since October 2019, Lebanon’s financial sector imposed ad hoc capital controls, preventing most Lebanese from transferring any money overseas or withdrawing dollars from their bank accounts, despite the fact that 75 percent of accounts in Lebanese banks are denominated in dollars.
• Lebanon is open to Foreign Direct Investment (FDI). The Investment Development Authority of Lebanon (IDAL) is the national authority responsible for promoting local and foreign investment in Lebanon covering eight priority sectors: industry, media, technology, telecommunications, tourism, agriculture, and agroindustry.
• Foreign private entities may establish, acquire, and dispose of interests in business enterprises and may engage in all types of remunerative activities. Lebanese law allows the establishment of joint-stock corporations, limited liability, and offshore and holding companies.
“Many people in Lebanon are unable to get their money out of the banks due to the undeclared capital control. So, they are trying to invest in real estate, preferably out of Lebanon. This is why we came up with an idea based on a win -win situation scheme. People can pay part of the amount due for their flats in Lebanon using USD cheques. We use these cheques to buy building material from Lebanon and we then ship them to Cyprus.”
“We chose Cyprus because it is within close range of Lebanon, the weather is almost the same and we can easily adapt to the people and the mentality.”
ARTICLE REFERENCES
• Why the Lebanese Choose Cyprus: Move, Live & Invest
https://www.paraschou.com.cy/why-the-lebanese-choose-cyprus-move-live-invest/
• Lebanese Nationals: Live & Invest in Cyprus
https://www.vasiliou.law/lebanese-nationals-live-invest-in-cyprus/
• The Complete Guide to Cyprus Real Estate
https://www.globalcitizensolutions.com/guide-to-buying-cyprus-real-estate/
• 2020 Investment Climate Statements: Lebanon
https://www.state.gov/reports/2020-investment-climate-statements/lebanon/
