FDIs ex­ceed € 2 bln

Financial Mirror (Cyprus) - - FRONT PAGE -

For­eign di­rect in­vest­ments (FDIs) into Cyprus are ex­pected to have ex­ceeded 2 bln euros in the past year, boosted by the mega-cap­i­tal rais­ing by Bank of Cyprus in Septem­ber and Hel­lenic Bank ear­lier this year, as well as a record num­ber of im­mi­grant visas granted to non-Euro­pean res­i­dents who have in­vested in prop­erty or in bank de­posits.

Ac­cord­ing to Fi­nan­cial Mir­ror cal­cu­la­tions, the Min­istry of In­te­rior has granted long-term im­mi­grant visas or im­ple­mented fast-track pro­ce­dures to 1979 from March 2013 to the end of Oc­to­ber this year, many of whom have bought prop­er­ties worth at least 300,000 euros (ex­clud­ing VAT) and se­cured a per­ma­nent res­i­dency per­mit.

Some have also opted to de­posit 5 mln euros in long-term fa­cil­i­ties of at least three years, thus jumping to the head of the queue when it comes to im­mi­grant visas and fast-track­ing pro­ce­dures with the Civil Reg­istry and Mi­gra­tion Depart­ment (CRMD).

How­ever, the num­ber of ap­pli­cants seems to have dropped from a to­tal of 1259 from March to De­cem­ber 2013 to 720 so far this year, with only two months re­main­ing.

The best months that at­tracted record ap­pli­cants were April and July last year with 178 and 117 cases, re­spec­tively, soon after the March 2013 Eurogroup decision that re­sulted in a bailout for the bank­rupt econ­omy and the bail-in by de­pos­i­tors to res­cue Bank of Cyprus, that in turn was bur­dened with the huge debts of now-de­funct Laiki Bank.

In­te­rior Min­is­ter Socratis Hasikos told the House Fi­nance Com­mit­tee on Mon­day dur­ing a re­view of his depart­ment’s bud­get for 2015 that since com­ing into of­fice in March 2013, the coun­try has at­tracted some 1 bln euros in in­vest­ments re­lated per­ma­nent res­i­dence visas and im­mi­grant ap­pli­ca­tions.

“It is a fact that the present ad­min­is­tra­tion’s pol­icy to en­cour­age nat­u­ral­i­sa­tions, but also by pro­vid­ing per­ma­nent res­i­dence visas (im­mi­gra­tion ap­pli­ca­tions) to per­sons who buy prop­er­ties worth at least 300,000 euros, brought in ‘fresh money’ of about 1 bln euros.

“This is all within the sim­i­lar le­gal pa­ram­e­ters laid down by other EU mem­ber states. It is not only Cyprus that has such pro­grammes in place and it is not only Cyprus that at­tract for­eign in­vestors,” Hasikos said.

FDIs into Cyprus reached 965 mln in 2008 and peaked at about 2.5 bln euros in 2009, be­fore drop­ping to 578 mln in 2010 and then pick­ing up a bit to 987 mln in 2011, ac­cord­ing to the Cyprus In­vest­ment pro­mo­tion Agency (CIPA).

The drop, say an­a­lysts, was due to the global fi­nan­cial cri­sis and de­vel­op­ments. How­ever, ac­cord­ing to re­vised Cen­tral Bank data, FDIs re­mained steady at 979 mln euros in 2012.

“Both amounts (bank in­vest­ments and prop­erty/im­mi­grant visas) will boost FDIs to beyond 2 bln euros this year,” a CIPA of­fi­cial told the Fi­nan­cial Mir­ror, adding that fur­ther road-shows be­ing planned by Hel­lenic Bank to se­cure its 200 mln euro cap­i­tal raise to cover its stress test short­fall, will help breach that amount.

Ef­forts are also un­der­way with the new-es­tab­lished Cyprus In­vest­ment Funds As­so­ci­a­tion (CIFA), a CIPA um­brella or­gan­i­sa­tion of fund man­agers, seek­ing to list funds on the Cyprus Stock Ex­change or at least se­cure an EU-wide pass­port through prospec­tuses ap­proved by the Cyprus Se­cu­ri­ties and Ex­change Com­mis­sion (CySEC), the fi­nan­cial sec­tor reg­u­la­tor.

What is left now is for fast-rack pro­ce­dures to be in­tro­duced and im­ple­mented both by the CSE and CySEC, in or­der to di­ver­sify the range of Cyprus-listed funds or com­pa­nies, while the some­what favourable out­come of the bank stress tests and up­ward re­vi­sions by rat­ing agen­cies may also lead to im­prov­ing the im­age of Cyprus in in­ter­na­tional fund mar­kets.

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