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Interview with Maria Kontari from AGP Law Firm about Real Estate, Citizenship & Immigration
Mrs. Maria Kontari works as an immigration consultant at the firm AGP Law in Limassol. She anwers to key questions about Cyprus Real Estate, Citizenship & Immigration and gives significant information for potential investors.
1. There are lots of statements in the internet about complications with the title deeds once purchasing a property in Cyprus. What will your firm point on this matter and what will you advise any future investor interested in purchasing a property in Cyprus?
That is a true fact. Nevertheless, the land registry has suspended procedures relating to so-called trapped property buyers after a court ruled that the law designed to help them obtain title deeds clashed with the constitution.
The law aimed to sort out the mess created by the failure to issue title deeds to people who paid for their property, either because the property was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.
The 2015 law grants the head of the land registry the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions.
Future investors, should be aware of all the above and have completed an extended legal research of the paperwork of every immovable company they intend to purchase.
However, our Firm handles a portfolio of investments in association with trusted development companies.
All projects we recommend to our clients have passed our legal due diligence and they form secure investments.
2. Investors know that taking advantage of the right moment is crucial for their outcome of their investment. Do you believe that it is indeed the right moment to invest in Cyprus and in such case, why?
Investors choose Cyprus not just because of the many competitive advantages it has to offer, but also because of the economy’s resilience and its ability to continuously adjust to changing conditions and bounce back from external shocks, as proven by its response to the economic crisis and to an extremely competitive international economic environment.
In basic economic terms, the price of a good (or a real estate property in this case) relies on supply and demand. When the demand is high, and supply is low, the price rises. Similarly, when supply is high and demand is low, the price falls. The financial crisis in Cyprus has reduced the demand of properties dramatically, thus resulting in falling prices.
Fortunately, Cyprus managed to break out of the crisis demonstrating a good progress in a relatively short period of time. It is worth mentioning though, that the price of real estate properties has just started to increase. Thus, an investment at this very moment is projected to generate great returns in the long term.
In terms of recent development, we can firstly elaborate on the companies that relocated to Cyprus in the last few years. The recent stability and increase in credit worthiness stimulated various finance and accounting firms to relocate to Cyprus.
Noteworthy but likewise important is the new regulations of the House of Representatives that has permitted the establishing and operation of casinos in Cyprus as well as new developments such as ‘Limassol Del Mar’, the ‘One’, ‘Trilogy’, ‘The Oval’ etc show the huge foreign investments in the island.
To conclude, taking into consideration the two most important pillars to be considered when analysing the real estate market of any country, it is undoubtedly a great time and opportunity for Real Estate investments in Cyprus.
3. Will the Cyprus Citizenship program as we know it today with the numerous advantages it provides have an expiration date? Many of the Cyprus passport holders uses the Cyprus passport as a gate way to Europe. How does this affect Europe and will the European Authority Centres seeκ to differentiate the Cyprus Investment Program?
According to the updated Passport Index, Cyprus gets a Passport Power Rank of 13, and an Individual Power Rank of 36 globally.
Its Global Mobility Score (for visa-free travel) of 146 ranks it above such countries as Lichtenstein, Monaco and Brazil; currently considered one of the most attractive passports in Europe. A person who holds the EU passport can travel without any restrictions within the EU area and to a number of countries outside the EU (28 EU countries and 140 countries in the rest of the world).
Cyprus passport holders may enter, reside, study and work in the European Economic Area (the European Union, Iceland, Liechtenstein, Norway) and Switzerland.
At the present and considering all the above, no expiry term has been determined for the program.
Officials have said that the figures show there is little to warrant concerns voiced by some European politicians that citizenship applicants view the scheme as a fast-ticket to settle in other EU countries. Fewer than 2,000 people have acquired a Cyprus passport through investment since 2013.
Of these, just two later moved on to another EU country.
In view of all the above, including the foreign Companies that have chosen to register in Cyprus, function from here and export their services worldwide (including Europe) based on the island the affection of the program to Europe signifies only α prosperous future.
4. Time is money, how fast can one get today either the Cyprus Citizenship or Permanent Residency, how complicated is the procedure and what is required from the potential investor?
When it comes down to deciding between Cypriot citizenship and Cypriot permanent residency, the most important question to ask is, “Which program can I benefit from the most?” Let’s discuss what each has to offer.
For starters, both programs offer applicants fast-track citizenship or residency. Cypriot citizenship can be obtained in as little as 3 months, whereas Cypriot permanent residency is granted in 2-3 months. Both programs recognize dual citizenship and provide applicants and their family visa-free and visa-on-arrival access to 159 countries, including the Schengen region.
As mentioned, there are differences to each program’s benefits. For instance, applicants seeking permanent residency must reside in Cyprus for a minimum of 6 months (and one day), whereas those applying for Cypriot citizenship are not obligated to reside in the country at all. This can be a significant factor for those wishing to remain in their country of origin. Cypriot permanent residency also allows access to quality healthcare and educational institutions anywhere in the country. In addition, Cyprus has one of the lowest crime rates in Europe, which offers applicants and their family added safety and security.
While both of Cyprus’ programs offer access to the EU and Schengen region, obtaining Cypriot citizenship and passport allows holders to live, work, and study in any EU member state. In addition, having a second passport is similar to a life insurance policy, which can help an individual in an emergency. While Cypriot citizenship might have more attractive benefits, it also comes at a higher cost.
Cypriot citizenship and residency each have their own requirements and benefits. Depending on the applicant’s circumstances and immigration needs, one might be better than the other. In line with the Cyprus government's objective to increase foreign investment, the Ministry of Interior has recently simplified the procedure for issuing Permanent Residency Permits to Non-EU nationals who wish to invest in Cyprus.
5. Immigration to Cyprus is closely associated to business. What business advantages does Cyprus offer in comparison to other European Countries (for instance Malta). Why should someone choose Cyprus to incorporate their company and immigrate to Cyprus?
Cyprus has proven to be attractive for third country nationals for the following reasons:
- Geographical location (Cyprus is at the crossroads of three continents: Europe, Asia and Africa);
- Stable economy in a western-type presidential democracy;
- Cyprus Exclusive Economic Zone holds significant economic growth potential in Oil & Gas exploration;
- Low tax rates as well as highly favourable international double tax treaties;
- No Inheritance Tax;
- Legal system based on English common law;
- English language is widely spoken and the accepted language for business;
- High level and mature professional services industry;
- Highly trained professional labour force;
- Access to reputable private and public schools including esteemed British universities based in Cyprus;
- Safety: Cyprus boasts the lowest crime levels in the EU;
- Low cost of living;
- Reasonably priced immovable property;
- High quality healthcare: Cyprus offers access to leading medical centres;
- Schengen applicant state, with membership pending;
- Excellent telecommunication and air travel connections;
6. Forum’s Global Competitiveness Index 2017-2018 ranked Cyprus 64th, up 19 places compared to the previous report, among 137 countries? What has improved in Cyprus the past year and what can have improved for the future?
- The number of unemployed persons in Cyprus in October 2017 dropped by 7.270 persons or 21.6% in relation to October 2016, according to a press release issued by the Statistical Service of Cyprus.
The unemployed persons, registered at the District Labour Offices on the last day of October 2017, reached 26.436, which is the lowest level since May 2011.
Based on the seasonally adjusted data that show the trend of unemployment, the number of registered unemployed for October 2017 decreased to 31.228 persons in comparison to 32.036 in the previous month.
The reduction in the number of unemployed persons was mainly observed in the sectors of construction (a decrease of 1.332 unemployed persons), trade (a drop of 1.286), public administration (a reduction of 973), accommodation and food service activities (a decrease of 771), financial and insurance activities (a decrease of 625), manufacturing (a decrease of 620) and to newcomers in the labour market (a decrease of 686).
- Home prices in Cyprus (houses and apartments) recorded a quarter-on-quarter increase of 0.5 per cent in the second quarter of 2017 according to the Cyprus Central Bank’s latest Residential Property Price Indices.
The Central Bank of Cyprus reports that home prices, which include apartments and houses, increased 0.5 per cent in the second quarter of 2017 compared with the first quarter in its latest Residential Property Price Index.
- The euro area economy is on track to grow at its fastest pace in a decade this year, with real GDP growth forecast at 2.2%. This is substantially higher than expected in spring (1.7%).
The EU economy as a whole is also set to beat expectations with robust growth of 2.3% this year (up from 1.9% in spring).
According to its Autumn Forecast released, the European Commission expects growth to continue in both the euro area and in the EU at 2.1% in 2018 and at 1.9% in 2019 (Spring Forecast: 2018: 1.8% in the euro area, 1.9% in the EU).
For Cyprus, economic growth has exceeded expectations in recent quarters. It is forecast to reach 3.5% in 2017 and to ease but remain robust over 2018 and 2019.
- Domestic demand is expected to be the main growth driver. Unemployment is set to continue falling and inflation is expected to remain moderate.
- On the fiscal side, headline surpluses are expected between 2017 and 2019, underpinned by a favourable macroeconomic environment.
- The confidence level that seems to prevail in the real estate sector reflects the positive developments in the economy of Cyprus and contributes significantly to the economy.
- Parliament on Friday 3/11 approved a bill imposing 19 per cent VAT on the sale of building land, fulfilling an EU condition some 10 year after the original deadline. The new law will come into force on January 2, 2018.
Economic growth in Cyprus will accelerate even more in 2017 and 2018, University
of Cyprus’ Economic Research Centre said, significantly upgrading its previous projections issued in July.
In the November Economic Outlook, the ERC said the Cypriot economy will expand with 3.6% and 3.3% in 2017 and 2018 respectively compared with 3.0% and 2.7% in the respective Outlook of November.
The ERC also upgraded its projections for economic growth in this year’s third and fourth quarters, now projected to reach 3.6% and 3.7% compared with 2.9% και 2.8% in the July projection.
“Real economic activity in Cyprus is expected to continue to expand strongly in 2017 and 2018,” the ERC said.