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November, 16 2018
November, 15 2018
Now I want a Passport Article by: CA Advocates
A comparative overview of the investment schemes in Cyprus, Malta and Austria.
If you are interested in travelling across Europe without the need for a visa, European countries have presented an opportunity to investors to become nationals. Many countries in the European Union now have established programs that provide the opportunity to high net worth individuals, through an investment, to acquire the European citizenship. Investment schemes for citizenship have become very attractive to wealthy individuals, due to the advantages of holding dual citizenship, and one of them being that of a European country.
The European passport carries with it benefits, such as freedom of movement, the ability for one’s family to live and work within the European Union. The European Union has been attractive to many individuals due to its cultural diversity and economic strength.
There are three main European member states who offer programs to acquire citizenship through investment. These member states are Cyprus, Malta and Austria. Through those specific investment schemes one is eligible to apply directly for citizenship and acquire it without further procedures.
Cyprus, located in the Mediterranean Sea, is a country which attracts tourists with its variety of beautiful beaches, has a magnificent scenery and all year-round pleasant weather. The secure environment in Cyprus is appealing to tourists. Families can relocate in Cyprus free from worrying about crime since Cyprus has a very low crime rate. Parents living in Cyprus will find that their education expectations may be met; there are many international schools and even universities with a high standard of education and great potential.
The official languages in Cyprus are Greek and Turkish, but English is spoken by the vast majority as well. English is well known because Cyprus was a British colony in the past. Independence was gained in 1960. In 2004 Cyprus joined the European Union and later in 2008 the Eurozone. The legal system applied in Cyprus is based on a common law principle, a residue from the colonization from the British.
Cyprus main economic revenue derives from, financial services, tourism real estate and the maritime sector. The economic future of Cyprus looks very promising with the discovery of natural gas. There is an estimated sum of €600 billion expected to be received through the production of the gas.
Cyprus introduced in 2014 a new scheme to attract the wealthy individuals to apply for a citizenship for him and his family.
The foreign investor in Cyprus must fulfill at least one of the 8 criteria:
1. Investment in Government Bonds issued by the Republic of Cyprus. The applicant must proceed with the purchase of Government Bonds issued by the Republic of Cyprus of value at least €5 million; or
2. Investment in financial assets of businesses established in the Republic of Cyprus. The applicant must proceed with the purchase of financial assets of value of at least €5 million (e.g. bonds / securities / debentures) registered and issued in the Republic of Cyprus.
3. Investment in Property in the Republic of Cyprus. The applicant must proceed with the purchase of immovable property of value of at least €5 million (houses, offices, shops, hotels or a development of a similar nature).
4. Investment or incorporation or participation in businesses that are established in the Republic of Cyprus. The applicant must proceed with the purchase of businesses or companies that are based and are active in the Republic of Cyprus, the purchase of shares of companies registered in the Republic of Cyprus of a value of at least 5 million and employ at least five Cypriot citizens.
5. Bank Deposits. The applicant must have personal deposits in Cypriot banks or through private companies or trusts (in which he is the ultimate beneficiary himself) in the Republic of at least €5 million in a fixed deposit.
6. Combination of Investments. The applicant may choose to proceed with a combination of any of the above mentioned categories for a total amount of at least €5 million and provided that the minimum period requirements as provided above are met.
7. Cyprus compensation scheme for lost investments. This category has recently been approved as compensation for depositors who lost at least €3 million due to the levy imposed on the bank deposits in Laiki Bank.
8. Collective Investment Scheme the applicants must proceed as follows:
1.Any investment referred in categories 1-4 referred above will be reduced to €2,5 million for non-Cypriot residents, who will participate in the collective investment scheme, with a total value of the assets of at least €12,5 million; i.e. if a group of 5 (five) investors apply collectively.
2.Any investment in the categories as referred above will be reduced to €2 million for applicants, who will participate in the collective investment scheme until the 1st June 2014, with a total value of investment of at least €12,5 million; i.e. if a group of 6 (six) investors apply collectively.
It is provided that for all categories explained above (except where the whole amount required is covered under category 7 (Cyprus compensation Scheme for lost investments) the investments must remain committed for a minimum period of 3 (three) years.
An additional condition for eligibility to apply for a passport is that regardless of which category under (1) to (7) above is chosen by the applicant it is additionally required to proceed with the purchase of a residence within the Republic of Cyprus of purchasing cost of at least €500.000, plus VAT. If the investor chooses the category 8 and buys property for the amount of €2,5 then there is no requirement additional to buy property of the amount of €500.000 plus VAT.
The Cyprus passport grants the whole family the Cyprus citizenship right, which includes one lawful wife and children up to 18 years old. The scheme offers also the opportunity for the children of the family of up to 28 years of age are entitled to be added to the investor’s application that are financially depended without having to increase the amounts invested.
The applicants are not expected to reside in Cyprus in order to be eligible for naturalization. These investment schemes are offered on the condition, that the applicant has a clean criminal record and is not on the list of whose property within the European Union has been placed under any restrictions. Cyprus’ investment schemes are one of the fastest to be processed; it takes 2 to 3 months for the applicant to obtain citizenship from the time of the application.
Malta is located in the Mediterranean sea, it consists up of five islands, two of which are not inhabited.. One would be interested to see the historical marks on the island, which show the turbulent past of the island. Apart from the opportunity to travel around the island or go to one of the neighboring islands, one can choose to simply relax on the wonderful beaches or by viewing the splendid countryside. Malta is a fairly small island, it is said to be in the top 5 safest places in the world. If there is an interest from a family to not just visit this island but to reside there, then Malta has a pleasant lifestyle to offer. There are numerous international schools, which the children can attend. In terms of finding a job, this shall not pose a great difficulty, since the unemployment rate in Malta is low. The Mediterranean weather with the required living conditions makes Malta a wonderful country to live in.
The official languages in Malta are Maltese, English and Italian is also spoken by many. Malta was a British Colony and it gained its independence in 1964. Malta joined the European Union in 2004 and is considered a highly politically stable country; it is a parliamentary representative democratic republic. The legal system in Malta is constructed with both common law and civil law. Civil law is used frequently in private law, whereas for legislation common law is utilized.
In terms of Malta’s economic stability, foreign trade, tourism and manufacturing are the main sources of economic income. With the adoption of the Euro in 2008, it aided the trade in the country, affecting its economy positively. Unlike many other European countries, Malta was not affected as greatly by the economic instability in the world.
The citizenship investment scheme in Malta was introduced in the year 2014. The criteria being that the applicant must contribute:-
- Non-refundable sum of €650,000 to the National Development and Social Fund
- Minimum of €350,000 the applicant must purchase a property
- Minimum of €16,000 annual price, the applicant must rent a property
- Minimum of €150,000 must be made into government approved financial instruments (must be kept for at least 5 years)
- Spouse – €25,000
- Minor Children (up to the age of 17) – €25,000 per child
- Children 18-26 (unmarried) – €50,000 per person
- Dependent parents and grandparents – €50,000 per person
- Adult children (mentally or physically challenged) – €50,000 per person
The applicant must reside in Malta for a year in order to receive the citizenship, though this does not mean that one must spend 365 days in Malta. Apart from the financial contribution, in order to be eligible for citizenship through the investment scheme, the applicant must have a clean criminal record. There shall be a four-tier due diligence process carried out in order to assess the applicants accordingly. The applicant must also prove he or she does not suffer from a contagious disease, and they must be covered by an international health insurance. The time required to obtain citizenship after the application, is from 12 to 18 months.
According to some sources, as of the beginning of the year 2015, the investor program has received more than 585 applications for the passport, the applicants are said to be from over 40 different countries. The investor program is limited to 1800 participants; this means this leaves limited spaces for further applications.
Austria, located in Central Europe and home to many historical attractions for which many tourists travel to visit. It is a highly charming and vibrant country, with striking landscapes. The mountainous areas are a great to ski in the winter and hike during the warmer time of the year. Tourists shall find numerous interesting monuments and architecture to view of palaces and castles. It would be a very enriching trip in terms of viewing the beauties of this country and educating oneself by exploring the culture and traditions in Austria. If one is interested in residing in Austria with their family there are many advantages. It is a wonderful place to receive an education, with international schools and universities of the highest standard. Austria has a high security level, therefore offering its residents a secure atmosphere to live in. The quality of life in Austria is ranked as one of the highest in Europe. One may also find Austria to have a good healthcare system, offering many medical treatments.
The official language in Austria is German, but English is spoken by many due to its international orientation. In some parts Italian and Russian are spoken as well. Austria joined the European Union in 1995. Austria is a Democratic Republic and it is a highly politically stable country.
Austria is known to be one of the richest countries in the world in terms of GDP, and it has a developed social market economy. A large amount of the income comes from tourism during the summer, as well as the winter period, it is without a doubt considered to have a very stable economy.
To obtain citizenship by investment in Austria, there are two options:-
- Donate €2-3 million to the economy of Austria (charity donation)
- Invest a recoverable minimum sum of 10 million US dollars into the economy of Austria.
- €400,000 to €600,000 (due diligence fees)
The spouse and children of the applicant are included in the application. Children 19 and older are excluded and must make a separate application.
There is no residency requirement in order to be eligible for citizenship. The applicant must have a clean criminal record, an outstanding financial history, a successful business background, and references with a good CV. It shall require 12 to 18 months to process the application and obtain the citizenship.
There are various citizenship investment schemes, and it varies for each individual and his family of what interests them more, which investment scheme is more appealing to them personally. A lot depends on not only the financial capacity of the investor, but also what atmosphere and country attracts the investor more in terms of visiting or possibly even to live in. Even though in the citizenship investment schemes of the above mentioned countries, residing for a long period of time is not obligatory or in some cases not a requirement. Each country has a great historical background, great weather or wonderful opportunities for education, work or life, for if the investor did decide to reside within one of these countries. Each European country has its advantages, and it is a matter of what the applicant’s personal interests are in order to invest into a specific country.
Article by CA Advocates