In the framework of the economic policy of the Republic of Cyprus especially after the financial crisis of 2013 and the attraction of foreign investors for establishment and activity in Cyprus, the Cyprus Investment Program (“CIP”) was designed and came into force based on the legislative provisions of Section 111A (2) of the Civil Registry Law of 2002 (141 (I) / 2002).
Under the CIP, a non-Cypriot citizen had the opportunity to acquire the Cyprus citizenship provided that certain financial and non-financial criteria, terms, and conditions were met and following the relevant control procedures, inter alia, by the Ministries of Interior and Finance.
Regarding the financial criteria that had to be met, the applicant should have donated at least 100.000 to the Cyprus Land Development Corporation (to support housing for the less fortunate); and €100.000 to the Industry and Technology Authority or the Renewable Energy Fund or the Research and Innovation Foundation. This amount could have been avoided if the applicant made an investment of €400.000 or more in a Small or Medium Enterprise (SME) with 5 Cypriot or European employees and retains the entire the €400.000 in the said business for 5 years and thereafter can sell up to €300.000 of his investment but retain €100.000 in that company forever.
The applicant could have invested in real estate, a business in Cyprus or an alternative investment fund and had to retain the investments for 5 years from acquiring the citizenship and to maintain ownership of the residence valued at least €500.000 or replace it with one of equal or higher value. At the same time non-financial criteria should be met, amongst others, the applicant should be a holder of a Clean Criminal Record and a Schengen visa.
Due to the weaknesses it presented over time and the abuse of its provisions, the Council of Ministers, after a proposal submitted by the Ministers of Finance and Interior for the abolition of the existing CIP decided to abolish the Citizenship Program as of 1 November 2020.
The abolition of the CIP resulted in the subsequent overwhelming rejection of applications for acquiring the Cyprus passport due to the CIP in the context of non-compliance with its financial criteria and/ or other terms and conditions. At the same time, a process of revocation and / or deprivation of Cypriot citizenship was initiated under Article 113 of the Civil Registry Law of 2002 (141(I)/2002) by persons who had received naturalization within the CIP.
The decision to reject an application for citizenship under the CIP constitutes an Administrative Act and as such gives the applicant the right to file a Recourse before the Administrative Court of Cyprus under the provisions of Article 146 of the Constitution. The Recourse shall be filed according to Article 146.3 of the Constitution within 75 days from the day that the applicant received and/ or gained knowledge of the rejection of the application for citizenship.
Author: Panos N. Panayiotou
Senior Partner
Head of Litigation Department of GCPLAW.
