The Cyprus citizenship scheme offers foreign investors citizenship through purchase of €2 million in Government bonds.
The Government bond scheme is one of the popular investment schemes to acquire Cyprus citizenship through investment, must be held for three years and then after maturity will be returned back without interest.
Citizenship through Government Bonds
According to the investment conditions set by council of ministers under investment scheme
- Government Bonds: The purchase of financial assets of Cypriot companies or organizations of at least €2,0 million, such as bonds, bills and securities, issued with the approval of the CySec, by companies that have proven physical presence and substantial economic activity in the Republic of Cyprus, and have as a purpose the financing of the investment plans of these companies or organizations exclusively in Cyprus, based on an investment plan, fall under this criterion. It is noted that the purchase by an AIF of units of other AIFs is not considered eligible.
- Mix of Investments: The applicant may proceed with a combination of the above investments, provided that the total investment will amount up to at least €2,0 million. Within this criterion (combination of investments) the applicant may purchase special government bonds of the Republic of Cyprus, up to €500.000, which will be issued by the Public Debt Management Office of the Ministry of Finance, on condition that the investor will retain these bonds for a three year period. The characteristics and the terms of these special bonds will be determined by the General and Special Issue Terms of the Government Bonds of the Republic of Cyprus. Investments in government bonds through the secondary market are not considered eligible.
According to Ministry of Finance of Cyprus report, foreign investors purchased about 76% of the total retail bond sales in years 2014-2016
Figure below, shows the outstanding amount of retail bond sales by citizenship during the years 2014-2017.
The majority of retail bond buyers during the years 2014-2016 were foreign investors due to the criteria for the obtainment of the Cypriot citizenship, as a measure to further encourage foreign investment and to attract high net worth individuals into doing business in the Republic of Cyprus.
Since the launch of the scheme in 2014 and before the amendment of the criteria for the exceptional obtainment of the Cypriot citizenship in October 2016, foreign investors purchased about 76% of the total retail bond sales in years 2014-2016. After this amendment, the retail bond sales have been directed mainly to Cypriot citizens.
Cyprus citizenship scheme has brought over 6 billion euros to Cyprus.
In 2018, Cyprus has issued over 2 billion euros worth of government bonds. THE CYPRIOT government granted around 3,300 passports to foreign investors in the past ten years
New changes to citizenship scheme
The Government recently made changes to citizenship scheme, capping the number of citizenships issued to 700 and established guidelines for the promoters and listing of approved registry of service providers from July.
