European second or alternative residency programmes – Cyprus

European second or alternative residency programmes have been receiving a lot of media attention. The UK and Irish residency-by-investment programmes have recently been closed with immediate effect, while significant amendments have been announced to investment-based residency programmes in Portugal, Greece, Spain, and elsewhere.

The residency programme information that is generally viewed by the public, either directly or through media channels, is typically investment-based and is being promoted by property developers, agents or investment managers. As a result, those interested in obtaining second residency are often not fully aware of the many different types of European residency programmes options that are available.

To address this imbalance, over the next few months I will provide an overview of some of the lesser-known European residency programmes that are available. I will start with Cyprus.

Cyprus Overview

Cyprus lies at the crossroads of three continents, occupying a strategic position for access to Europe, Asia and Africa. Its two international airports – Larnaca and Paphos – make Cyprus an excellent platform for travelling throughout Europe and the rest of the world.

This location, together with its membership of the European Union, its culture and advanced infrastructure all make Cyprus a very attractive destination for those looking to establish a primary or secondary place of residence. It also has one of the most attractive tax regimes in Europe.

Its climate, with more than 320 days of sunshine per year, offers the archetypal Mediterranean lifestyle. One of the safest countries in Europe, Cyprus also boasts advanced healthcare services and a great selection of international schools, making it an ideal for raising a family.

Cyprus Residency Programmes

Cyprus offers a range of residency programmes that cater for most personal requirements and budgets, which provide non-EU nationals and their qualifying dependants with the right to live in Cyprus and travel throughout Europe. Successful applicants receive a Cyprus residence permit and the following benefits:

• The right to reside, settle and stay indefinitely in Cyprus
• Use of embassies in Cyprus to apply for Schengen Visas
• Option to include spouse andqualifying dependent children.
• No language requirements
• Access to high quality educational institutions and medical facilities
• Minimal ongoing physical presence or residency requirements (not applicable to the temporary permit)
• Multiple personal and corporate tax benefits
• Eligibility to apply for Cyprus citizenship by naturalisation after seven years*

* Citizenship applicants must live permanently in Cyprus for five years within a seven-year period, which amounts to 1,825 days. Additional qualification requirements also apply.

Permanent Residency Programme (PRP) – ‘Fast Track’

The Cyprus Permanent Residence Programme (PRP) provides successful applicants with permanent residence status in approximately two months. This status is valid for life and can also be passed on to dependants.

The main qualification requirements are as follows:

• Provide evidence that the main applicant has invested the minimum requirement into a qualifying investment option.
• Demonstrate proof of a secure annual income of at least €50,000, which is increased by €15,000 to include their spouse and by €10,000 per child. A certificate of ‘no criminal record’ and of not being under investigation for criminal offences, that is attested by the relevant authorities of the applicant’s country of current residence.
• Private Medical Insurance
• Residence permit holders must visit Cyprus at least once every two years to maintain their status.

To qualify, applicants are required to make a minimum investment of €300,000 (plus VAT, if property-related) into one of the following investment options:

• Qualifying residential or commercial real estate
• A qualifying Cyprus Alternative Investment Fund (AIF)
• Shares in a Cypriot-based company employing a minimum of five local employees

Permanent Residency Programme (PRP) – ‘Slow Track’

The Cyprus Permanent Residency ‘Slow Track’ – also known as ‘Category F’ – programme is available to applicants who possess, and have fully and freely at their disposal, a secured annual income, high enough to provide a good standard of living in Cyprus, without having to engage in any business, trade, or profession.

Whilst applicants are allowed to reside in Cyprus from the date of the official submission of the application, they should allow for 12 to 18 months to obtain the Permit.

The main qualification requirements are as follows:

• Annual income, that is sourced from outside Cyprus, of a minimum of €24,000, which increases by 20% for a spouse and by 15% for each dependent child.
• A title deed or rental agreement for a residential property in Cyprus that is for the sole use of the applicant and his/her family. *
• A certificate of ‘no criminal record’ and of not being under investigation for criminal offences, that is attested by the relevant authorities of the applicant’s country of current residence.
• Private Medical Insurance

* Whilst no minimum investment amount is specified, the higher the financial commitment the more likely it is to be considered favourably. Typically, a property purchased for €150,000 will fulfil this requirement.

Temporary / Retirement / Self-Sufficiency Residence Permit

The Cyprus Temporary Residence Permit is an annually renewable self-sufficiency visa that allows an individual and their qualifying dependants, to live in Cyprus as a visitor, without employment rights.

The main qualification requirements are as follows:

• Annual income, that is sourced from outside Cyprus, of a minimum of €24,000, which increases by 20% for a spouse and by 15% for each dependent child.
• A title deed or rental agreement for a residential property in Cyprus that is for the sole use of the applicant and his/her family.
• A certificate of ‘no criminal record’ and of not being under investigation for criminal offences, that is attested by the relevant authorities of the applicant’s country of current residence.
• Private Medical Insurance
• An original medical examination certificate to confirm that the applicant does not have certain medical conditions.

N.B. It is essential that a holder of this temporary residence permit should stay out of the country for no more than three months at a time, because this could result in the permit being cancelled.

Digital Nomad Visa

The Cyprus Digital Nomad Visa Scheme permits non-EU nationals (and their qualifying dependants), who can perform their work independently using information and communications technology (ICT) to reside temporarily in Cyprus and work for companies or clients that are located abroad.

The main qualification requirements are as follows:

• Applicants must be employed by a company that is registered abroad and for which they can work independently or must be self-employed individuals who offer services remotely for clients that are located abroad.
• Demonstrate proof of a stable monthly net income of at least €3,500.

Cyprus Tax Residency Programme

The Cyprus tax residency programme provides preferential tax incentives for qualifying non-domiciled individuals who are resident in Cyprus.

The main qualification requirements are as follows:

• ‘The 183-day Rule’ – For an individual to be considered a tax resident of Cyprus under standard terms, they are required to be physically present in Cyprus for more than 183 days in a calendar year.
• ‘The 60-day Rule’ ­­– A reduced physical presence requirement applies to individuals who:
• Do not reside in any other single state for more than 183 days within a tax year.
• Are not tax resident in any other country within a tax year.
• Maintain (by owning or renting) a permanent home in Cyprus within a tax year.
• Establish a business and/or are employed in Cyprus and/or holds an office with a Cyprus tax resident company at any time during the tax year.

Comprehensive Residency and Citizenship Planning Services

Sovereign works closely with applicants during each stage of the planning and implementation process. When combined and managed correctly, the following Sovereign Group services assist individuals and families to develop and implement a comprehensive, flexible and tax efficient residence strategy:

• International residency and citizenship programmes
• Tax residency
• Trusts and foundations
• Estate and succession planning
• International retirement plans
• Wealth management
• Corporate structures and banking
• International life and medical insurances.

For further information, to discuss your requirements and/or to determine whether you qualify for the one of the Cyprus or any other residency or citizenship programmes, please contact Sovereign’s Residency & Citizenship Planning team at: RCBI@sovereigngroup.com