Cyprus Ends Citizenship By Investment: What Options Are Left For Asset Holders?

Citizenship by investment lets individuals get the full advantage of an offshore jurisdiction - including an escape from political and economical turmoil in a host country - by becoming citizens. While there are a long list of prospective options for citizenship by investment, one alternative is, or was, Cyprus.

Citizenship by investment is the process by which an individual, married couple, or family essentially makes an investment or offers a donation to a country in exchange for citizenship. This is a viable option for people who are looking to move from their home countries due to a variety of issues. With tensions on the rise in areas such as the United States due to a wide range of issues ranging from COVID to the upcoming elections, people are looking for better infrastructures where they can live and invest. Citizenship by investment offers opportunities in areas such as Dominica, St. Lucia, Malta, Turkey, Jordan, Egypt, and, up until now, Cyprus.

Cyprus once offered a simple, straightforward, and surprisingly fast process for those who wanted to take advantage of citizenship by investment. In a matter of months, you could become a citizen of Cyprus by simply fulfilling the requirements, which included an investment in real estate, government bonds, a bank deposit in a Cyprus bank, or an investment in a new company. Now, however, Cyprus has announced that it is completely terminating its citizenship by investment program on November 1, 2020.

Why, all of a sudden, is this happening?

The Cyprus Papers Leak

The news outlet Al Jazeera recently released The Cyprus Papers, a collective leak of 1400 documents that explicitly showed how Cyprus was granting passports to known criminals who were looking for a safe harbor. Then, following, this leak, Al Jazeera’s Investigative Unit released The Cyprus Papers Undercover, which showed how parliament speaker Demetrius Syllouris and parliament member Christakis Giovanis were willing to help convicted criminals obtain passports through the very Citizenship Investment Programme (CIP) that had attracted so many well-intended people.

These events led to the program being terminated. Now, asset holders are wanting to know what they can do. Cyprus was once among the lowest tax regimes in Europe and still is, and while people were once able to easily move there, now that has come to an end.

So, can asset holders maintain some of the benefits they had before? The answer is yes. One option that is still on the table is to create a corporation and/or banking in Cyprus.

Cyprus Offshore Corporation & Banking Account

There are a number of advantages to forming a corporation in Cyprus, including a low corporate tax rate of 12.5%. Some forms of income, such as dividend income, interest income, and foreign exchange gains, are exempt from taxation.

In Cyprus, you have more flexibility in your company structure and there is no minimum capital requirement. Only one director and one shareholder are required for your corporation when you create it in Cyprus, offering a benefit for single-owned entities. Additionally, Cyprus is a well-known solution for ecommerce companies.

Setting up a corporation in Cyprus can be beneficial in the right circumstances. Whether you choose to do this or open an individual offshore account in Cyprus, you can still take advantage of some of the unique financial benefits offered by this jurisdiction. For instance, if you want to invest in an offshore jurisdiction which offers excellent online banking options, then you might want to learn more about banks in Cyprus.

Online bank transfers and other services make it easy to manage your finances no matter where you are. Plus, the European location of Cyprus lends to full multi-currency facilities.

Takeaway

Even though Cyprus no longer offers the citizenship by investment program that was drawing in people from around the world with its fast naturalization process, the country is still one of the lowest tax regimes that can be found in Europe. Although citizenship by investment is a gold star for people who want to truly escape from issues in their home countries, those who are merely looking for a better financial situation can still take advantage of many of the opportunities that Cyprus has to offer.

As with all financial situations, the key to finding the right option for you is to assess your needs and go with the option that will best benefit you. If you are still highly considering a citizenship by investment opportunity, just know that there are still many other options in The Caribbean, Europe, and other areas around the world. With The Cyprus Papers and The Cyprus Papers Undercover investigation coming forward, it’s no doubt that many are scrambling to find new arrangements that will best meet their financial needs going forward.

If you have been considering Cyprus for your wealth management strategy, it can still hold promise as an offshore jurisdiction. You can consult with us to explore in depth what Cyprus can offer you as an offshore jurisdiction.