Why Cyprus has become a popular investment destination for the elite.
Cyprus, an EU member state, is attracting foreigners from all over the world. What attracts investors to Cyprus is its strategic location as a jewel of the Mediterranean, with stunning scenery and a modern, liberal lifestyle.
The third largest island in the Mediterranean, Cyprus lies south of Turkey, southeast of Greece, and at the crossroads of Africa, Asia, and Europe. Over time, the island has strongly attracted the elite for compelling reasons.
Some of the main reasons for this attraction are as follows:
Low tax rates and a favorable business environment.
Cypriot corporate tax is one of the lowest in Europe – 12.5%, which can be reduced to just 2.5% with the application of the NID Interest Deduction. Investors can obtain numerous tax incentives and benefits in Cyprus.
More specifically, there is 0% tax on dividends and income for individuals not residing in Cyprus, 0% tax on profits from the sale of stocks, securities, and bonds, 0% withholding tax on interest and dividends, and 0% inheritance tax. Capital gains tax is also 0%, except for the transfer of real estate or shares of a company owning real estate in Cyprus. Rental income is taxed at an average rate of 20% after subsidies.
Furthermore, Cyprus is protected under the European Double Taxation Treaty with over 63 countries, meaning that an individual cannot be taxed twice on the same income in one country but another.
The regulations regarding the easy naturalization program are simple.
There are two easy ways: the first is the citizenship by investment program – choose where to invest, obtain a passport, and become a citizen of the Republic of Cyprus; and the second is the permanent residency program – invest to obtain a 'Golden Visa' or entitlements in the United Kingdom after investment.
Investors can immigrate to Cyprus permanently through both of these pathways. Under the first program, applicants are required to invest a minimum of €500,000 + VAT to obtain permanent residency in the Republic of Cyprus, along with an additional €2 million investment in real estate, land development projects, infrastructure, an AIF (Asset Investment Fund), or the establishment of a wholly owned company. However, alternatively, the €2 million can be invested in the residency itself or entirely in real estate, reducing the minimum requirement from €2.5 million to €2 million.
The amount required for the permanent residency program is part of the requirements for obtaining citizenship. Residency rights for an individual applicant are typically granted within three to four months, and the entire family is eligible for immigration, including the applicant's spouse, dependent children up to age 25, and the applicant's parents.
Cypriot permanent residency allows for flexible entry and exit without the obligation to reside in Cyprus; the only requirement is a short visit to the island once every two years. Obtaining Cypriot permanent residency is easy and inexpensive. The minimum required investment is €300,000 plus VAT. Applicants must also demonstrate a minimum annual income of €30,000 and provide an additional €5,000 for each spouse and child, and €8,000 for each accompanying parent.
Income can come from pensions or investments. Additionally, applicants must deposit €30,000 into a Cypriot bank, held as a bond for three years. Cypriot permanent residents obtained through investment can convert to citizenship and a passport after seven years of legal residency. Nearly 3,300 applications have been approved under the Cyprus Investment Program since its inception, with over 400 approved in 2016 alone.
Lowest education costs in Europe
There are many advantages to studying in Cyprus, as the country spends over 7% of its GDP on education, the third highest in the EU after Denmark and Sweden. The most popular curriculum at Cypriot universities is in hospitality and tourism. Courses at Cypriot universities are affordable, with fees (which can be lower) of 2,400-2,800 Euros per semester, and student accommodation or living expenses are also more reasonable than in other European countries – at around 250-400 Euros per month.
Easy to work/travel globally
By law, a foreign student is permitted to work in Cyprus for 20 hours per week during the academic year and 36-40 hours per week during holidays.
Working and traveling in EU countries while living in Cyprus is easy, as Cyprus enjoys visa-free travel to over 170 countries (according to the Henley Passport Index). This makes the Cypriot passport one of the strongest in the world. Under the Investment Program, investors can enjoy all the privileges of Cypriot citizenship, as well as benefits for studying and working in Cyprus and other European countries, with a Cypriot passport.
The quality of life is rated among the highest in the world.
A recent study analyzing 107 countries ranked Cyprus as the fifth safest country in the world, behind only Switzerland, Singapore, Spain, and Japan. In the same study, among countries with populations under 5 million, Cyprus topped the list as the safest country to live in and travel to. Cypriot citizenship comes with the right to enjoy state-funded healthcare benefits.
Finally, it's worth reiterating the importance of the quality of life that Cyprus offers. This Mediterranean gem is ideal for high-value, affluent clients who want a superior education for their children, access to Europe and other countries around the world, and to enjoy over 300 days of sunshine by the beaches. Cyprus, and many other European countries such as Germany, Sweden, and Norway, offer high-quality, free primary, secondary, and university education that is superior to that of other countries.
Cyprus is a great option for everyone.