Cyprus Investment Program

The Cyprus Investment Program (CIP) (Greek: Κυπριακό Επενδυτικό Πρόγραμμα, ΚΕΠ) was an immigrant investor program conceived by the Government of Cyprus in order to attract foreign investors in exchange for Cyprus citizenship. Details of the scheme were made public after a leak of documents, the Cyprus Papers, to Al Jazeera which caused a controversy in Cyprus and led to the end of the program.[1]

The program was initiated in 2007. From 2007 to November 1, 2020 just over 7,000 people received Cypriot citizenship. The minimum investment was 2 million euros and citizenship was extended to the family of the investor as well.[2] In 2013, the required minimum investment for citizenship was lowered from 25 million in 2007 to 2,5 million.[3] Applicants did not need to physically stay in Cyprus or pass a langugage test to acquire citizenship.[3]

One of the reasons for citizenship by investment is tax evasion and visa free travel.[3][4]

An independent inquiry committee later found that more than half of the passports were wrongly issued.[5][6][7] In 22 August 2022 a report by the Audit Office of Cyprus revealed that the Ministry of the Interior did not disclose required information about applicants to the Council of Ministers, and that the improper granting of citizenship had resulted in recorded losses of €200 million in taxes and €25 million in non collection of fees. Furthermore, investment contracts worth €1 billion had been canceled, while contracts worth €3.5 billion had not yet materialized.[8]

The influx of foreign investors has created a number of problems for the local communities that are priced out from rentals as well as gentrification.[9] Russians have been the top foreign buyers of Cypriot properties.[10]

After the Russian invasion of Ukraine, Cyprus revoked the passports of some Russians that were blacklisted in the EU for sanctions.[6] As of January 2023, 222 holders of so-called "golden passports" had had their citizenship stripped.[5] Five "golden passport" holders have been targeted by US sanctions for arms dealing.[11]

References
  1. Unit, Al Jazeera Investigative (2020-10-13). "Cyprus abolishes citizenship through investment programme — Investigation News". Al Jazeera. Retrieved 2023-09-17.
  2. Kambas, Michael (2022-09-12). "Four go on trial for graft over Cyprus passports scheme". Reuters. Retrieved 2022-10-01.
  3. Langenmayr, Dominika; Zyska, Lennard (2023-05-01). "Escaping the exchange of information: Tax evasion via citizenship-by-investment". Journal of Public Economics. 221: 104865. doi:10.1016/j.jpubeco.2023.104865. ISSN 0047-2727.
  4. "Three Russians Who Got Cypriot Passports Charged With Tax Evasion". The National Herald. 1 January 2023.
  5. "Cyprus so far strips 222 people of 'golden passports'". AP News. 2023-01-18. Retrieved 2023-09-17.
  6. "U.S. charges Russian billionaire Oleg Deripaska with violating sanctions". in-cyprus.philenews.com. Retrieved 2022-10-01.
  7. "Most Cyprus passports issued in investment scheme were 'illegal' — Corruption News". Al Jazeera. 2021-04-16. Retrieved 2023-09-17.
  8. "Σαθρότητα μέχρι τέλους στο ΚΕΠ διαπιστώνει η Ελεγκτική". www.philenews.com. Retrieved 2022-08-24.
  9. "Cypriots priced out as Russians, Israelis eye coastal city - Al-Monitor: Independent, trusted coverage of the Middle East". www.al-monitor.com. Retrieved 2023-04-08.
  10. fm (2023-03-13). "Property sales boosted by Russians". Financial Mirror. Retrieved 2023-07-09.
  11. "Five Cyprus Golden Passport Holders Sanctioned for Russian Arms Trading". www.occrp.org. Retrieved 2023-04-20.
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