Investment immigration programs have long been criticized by multinational bodies like the European Parliament.
The loudest and harshest criticism has been reserved for EU golden visa programs, especially the citizenship-by-investment programs offered by Cyprus and Malta.
EU Citizenship: Worth the Price
Fast-track Cypriot citizenship does not come cheap. The applicant must invest at least €2 million in the country, and buy a home worth at least €500,000, plus make an additional contribution of €150,000. Including processing fees, VAT, and other charges, the cost of obtaining a Cypriot passport can easily exceed €3 million.
Despite the price, demand is high – primarily because Cyprus is a member of the European Union. An investor qualifying for Cypriot citizenship becomes an EU citizen, meaning the primary candidate and all dependent family members can travel, work, study and live in any EU member country with minimal restrictions.
While reluctant to roll back or terminate the programs, countries have been responsive to worries about misuse of their golden visa programs for money laundering, tax evasion and other financial crimes.
Read More
Cyprus CIP and COVID-19: Double the Benefits and Opportunities
Cyprus CIP’s Reputation Enhanced By Tougher Rules, Stronger Intent and Passport Rankings Jump
Cyprus Introduces Sweeping Changes to its Citizenship by Investment Program
Cyprus: Strengthening its CIP
Cyprus has deployed several measures to protect its CIP from potential misuse and abuse. It has ramped up the thoroughness of its due diligence process, with candidates required to pay an additional fee specifically to fund the intensive vetting of their applications.
Better administrative processes ensure applications are processed within six months without compromising the quality of the due diligence process.
Thorough vetting apart, the program contains an in-built safety valve in the form of annual reviews of approved applications for a ten-year period and provision for revocation of passport for any violation.
Taking note of concerns about financial crimes, Cyprus has implemented anti-money laundering measures and rules proposed by international agencies to secure the CIP’s credibility.
Further, Cyprus has eschewed the real-estate investment route and requires applicants to choose from a wide range of investment options. This has enhanced the scope for genuine investments into productive sectors of the European economy.
How Cyprus Compares with Other EU Programs
The Cypriot program is unique in that it offers a direct path to EU citizenship. Yet, a comparison with other popular EU golden visa programs offered by Portugal and the UK highlight important differences.
Portugal has issued more than 10,000 golden visas since 2012 and the country attracts FDI in excess of €650 million annually. The UK has issued more than 10,000 golden visas, and its Tier 1 Investor visa has a poorer track record of rejecting unsuitable applicants.
In contrast, Cyprus and Malta have annual and overall caps aimed at preventing misuse of the program.
Investment Immigration: Pragmatic Approach Needed
Cyprus’ CIP contributed significantly in bolstering the economy and preventing the collapse of the country’s financial system after the 2008 recession. With the COVID-19 pandemic roiling the global economy, it would be naïve to expect countries to simply roll back such a reliable and lucrative source of precious foreign investment.
International agencies should adopt a more pragmatic approach and focus on encouraging other countries to follow Cyprus’ lead by plugging loopholes and improving the quality of their golden visa programs.