Mansion in exchange for a passport.

Cyprus offers one of the most convenient real estate investment programs in exchange for a passport. How much does the specified program cost the investor?

Among the passports of the EU countries, Cypriot documents are especially popular among investors. According to the authorities of the republic, starting in 2013, the size of investments in the country's economy in the framework of investments in exchange for a passport exceeded € 3 billion. A large detachment of wealthy third-country nationals outside the EU became the owners of Cypriot citizenship.

Although the list of persons who obtained citizenship through investment in Cyprus has not been officially disclosed, it is known for certain that many businessmen from Russia and Ukraine chose to buy a Cypriot passport. Why? The answer is obvious.

The Cyprus Investment Program has several significant advantages, such as:

• the possibility of obtaining EU citizenship in 6 months;
• lack of requirements for living in Cyprus;
• lack of need for financial donations;
• a three-year investment period;
• lack of an exam in history and language;
• a wide range of investment tools - private and commercial real estate, government bonds, stocks of companies, own business.

Among the EU countries, the only alternative to Cyprus may be the investment program for obtaining Malta citizenship. Currently, only these two countries allow you to get a passport in exchange for investment for the shortest possible time as a result of a strictly formalized and legislatively approved procedure.

After in September 2016, the Cypriot authorities began to lower the threshold values ​​of the amount of investment required to obtain citizenship, it became enough for the investor to have an amount slightly above € 2 million to qualify for a Cyprus passport.

At the same time, from the point of view of initial investments, even a smaller amount (about € 1.5 million) is required to obtain Malta citizenship, but the total costs in the end will be comparable to investments in Cyprus.

Real Estate Investments

If we confine ourselves to considering investment in real estate in Cyprus, then for the acquisition of citizenship you must:

• become the owner of a private residence in the amount of € 500,000, which should remain in the possession of the investor “forever” (unless it is replaced with equivalent property worth at least € 500,000);
• become the owner of real estate in the amount of € 1.5 million, which, in accordance with applicable law, the investor has the right to sell after three years from the date of receipt of the passport.

One of the main advantages of the Cyprus real estate investment program is the possibility of a buy-back procedure, which is now offered by a number of the leading developers of the island.

Its essence is that after three years, the developer “buys” property in the amount of € 1.5 million at the price of the initial sale, in case the property prices go “down”. This ensures a guaranteed return of most of the funds invested in real estate without loss as a result of lower prices.

If real estate prices rise, the owner has the opportunity to sell the property on their own, directing the profits at their discretion.

Thus, it is guaranteed that the property was not purchased at an inflated price, and the investor's risks from fluctuations in prices in the real estate market are minimized.

Total costs

The costs of obtaining a passport including taxes and additional costs as part of the buy-back procedure are:

• the largest portion is 5% VAT on real estate for € 1.5 million (€ 75,000) and 19% VAT on real estate for € 500,000 (€ 95,000). As a result, total costs increase to € 2.17 million;
• registration fees and sales contract execution fees are € 4,000;
• there is no fee for real estate transfer;
• there is no real estate tax;
• there is no commission from a real estate agency;
• passport fee: € 10,000 for an adult family member and € 3,500 for a minor;
• state commission for issuing a passport € 5,000;
• commission for a residence permit € 3,000.

Thus, the total costs for a family of two people (two adults) are estimated at € 2.22 million. However, after the sale of the main part of the property, the amount of investment is limited to € 720,000, in which € 500,000 are assets “in the form of a private residence”.

As the work with investors confirms, the clause on the purchase of real estate by the developer (subject to lower prices in the next three years) is an attractive option for the buyer. Therefore, there is no reason to believe that the volume of investment in real estate in exchange for a passport may decline in the near future.

At the same time, one should not forget about the risks associated with investing in a Cypriot passport. The main danger to the Cyprus investment program is the EU authorities, which constantly exert pressure on the republic in order to complicate the procedure for obtaining citizenship as a result of investments.

The main requirement that European officials insist on is that the investor has a close relationship with Cyprus at the time of filing citizenship documents. It follows that the investor must have (at least) a residence permit in the country. In the future, this requirement may become tougher, which will ultimately lead to a significant increase in the time required to obtain a passport.