The World Citizenship Council (WCC) defends against negative attacks on the Hotel citizenship platform by the Cyprus media.
We see this as an attack on the startups for the CBI industry aimed at destabilizing the reputation of the CBI industry, which is already suffering from scandals in Cyprus at a time the property investments are declining
The Hotel Citizenship platform initially launched currently as a test phase, aimed at attracting hotel investments for CBI industry. The platform introduced a decentralized hotel ownership concept so that citizenship investors can buy a hotel room, share or entire hotel ownership in luxury five star hotels with the citizenship perk. The platform aims to compete with Airbnb to develop more hotels. The platform aims to connect buyers and developers directly without intermediaries/brokers and use of the platform is free of charge.
The platform is only planned for launching in 2020 and we see this criticism and negative publicity in the Cyprus media preventing the launch the platform.
WCC has always strongly supported the idea of hotel investments for citizenship investors. We dont see any reason why it is wrong to invest in hotels for citizenship. Besides, the list of CIP Govt approved real estate developers and their properties including hotels are already publicly available in CIU websites, so no explicit permission from each developer to re-list these properties. We live in an information age, where information is quickly shared across various platforms.
Cyprus is visited by over 4 million tourists every year and Cyprus needs more hotels than ever to meet the demands of tourism market. Investing in hotels only bring significant benefits to the country and investors than investing in residential properties. Residential properties do not create a single full time job. Here is why?
1. Hotels Create jobs for the country as commercial investments
2. Hotels Contribute to economic development generating Govt taxes
3. Hotels do not contribute to rising residential rental prices
4. Only Hotels can compete with Airbnb meeting tourism demand, soaring property rental prices and social problems created by Airbnb.
5. Hotels offer investors hassle free maintenance
6. Hotels offers investors more profit margins than residential properties.
Not so long ago, people queued in front of banks in Cyprus, during the financial crisis in 2013, which led to the installment of Citizenship by investment scheme to recover from deep recession. Today the the Cyprus investment program (CIP) is the third biggest revenue earner in the world behind US, Canada bringing €6.6 bn. Today Cyprus GDP swung towards positive growth rate, thanks to the CIP scheme operating since 2013.
WCC is aware few shady characters have invested through citizenship scheme. Just for few illicit characters, saying NO to significant real estate investments in residential and commercial sectors is madness. No due diligence is 100% perfect and even US EB-5 struggle with frauds from golden visa schemes in the real estate sector.
WCC warns that any more decline in real estate investments from citizenship investors, will effect property developers, law firms and real estate agents in Cyprus. Any significant decline in citizenship investments as a result of negative publicity or attacks against the industry, will crash currently booming property market, throwing Cyprus into recession.
From 2013 to Aug 2018, a total of 1,864 investors received citizenship in Cyprus under the CIP. Lately the Cyprus government announced decision to revoke citizenship of 26 persons who abused the citizenship scheme. While WCC welcomes the decision of Cypriot Government, this only represents 1.3% fraud rate which is relatively low for the investment scheme. This also means over 1800 wealthy families have had a new life with their legally obtained wealth!
Jho Low received cyprus citizenship in 2015. We dont live in 2015, as we head towards 2020, the vetting standards of citizenship by investments have greatly improved with latest updated risk and compliance software powered by machine learning algorithms, used by due diligence providers.
All in all, the due diligence never failed in Jho Low case, as the report clearly showed the considerable risks in money laundering, Politically exposed person (PEP), and with Fraud and Regulatory changes. making him high risk person to grant passport.
WCC reminds that granting of citizenship against real estate or hotel investors is only at the discretion of Cyprus Govt. It is not the responsibility of real estate developers or law firms to grant citizenship or passports.
Lately the CBI industry is suffering from a loophole that many corrupt or illicit characters commit crimes after receiving passport. It is impossible to detect such people from current vetting standards and to effectively solve this problem, WCC was the first to suggest to conduct due diligence checks every 5 years improving the vetting standards.
In response to the recent scandals, The Ministry of Interior of Cyprus also announced significant measures to tighten vetting checks on passport investors, banning PEP’s and high risk persons.
- Politically Exposed Persons Holding or Holding a Political Position for the Last 5 Years
- Persons subjected to criminal investigation without charges being charged
- Persons subject to criminal investigation
- Persons sentenced to imprisonment for serious offenses (eg public servant bribery, tax evasion, etc.) and the penalty has been prescribed
- Persons linked to legal entities subject to EU restrictive measures eg. share holders, senior executives of companies included in the list of sanctions
- Persons affiliated with legal entities who have been restricted by the EU, but are no longer associated with eg. shareholders, senior executives of companies that were included in the list of sanctions, which were associated with those companies when the sanctions regime was imposed.
- Persons Sanctioned by Third Countries (eg US, Ukraine, Russia)
- Persons associated with legal entities subject to sanctions by third countries.
- Persons being investigated / charged with criminal offenses and being sought across Europe by EUROPOL or internationally by INTERPOL.
- Persons investigated / indicted for criminal offenses, are being sought across Europe by EUROPOL or internationally by INTERPOL and are no longer sought.
- Persons subject to sanctions by the UN Security Council.
WCC will stand in full support of real estate developers, agents, governments, law firms and the industry as a whole who stood for the success of the CBI industry.
About World Citizenship Council
The World Citizenship Council (WCC) launched as non-profit startup in 2018, for research and development of Citizenship and residence by investment schemes. WCC brings together experts around the world serving the CBI/RBI industry. The Council also plays an important in role new technologies, due diligence, statelessness and other important matters.
Membership is free. Register here
Public donations to council are welcome
