Visas, pass­ports and civil part­ner­ships too!

Financial Mirror (Cyprus) - - FRONT PAGE -

Amid all the eco­nomic cri­sis and fall­ing de­mand in the prop­erty mar­ket, the only hope that re­mains is that sin­gle mea­sure about res­i­dency and cit­i­zen­ship linked to prop­erty in­vest­ments in­tro­duced dur­ing the Tas­sos Papadopoulos pres­i­dency in 2007, which, alas, was never im­ple­mented. With the cri­sis that fol­lowed 2008/2009 and de­spite our in­sis­tence to be ap­plied more in­ten­sively af­ter we pressed the then In­te­rior Min­is­ter Neo­clis Si­liki­o­tis, af­ter 1 1/2 years and upon our own ini­tia­tive, a meet­ing took place in Novem­ber 2011 at the Bank of Cyprus with 400 del­e­gates where the con­clu­sion was the then Gov­ern­ment did ev­ery­thing to block this mea­sure, say­ing there were prob­lems with the ap­pli­ca­tions, a de­lay of 1-1.5 years to re­spond, etc). As the del­e­gates got fu­ri­ous with the de­lays and the pres­sure that fol­lowed on the new gov­ern­ment, this mea­sure was even­tu­ally im­ple­mented and ex­panded at var­i­ous lev­els, where the EUR 15 mln ini­tial in­vest­ment was re­duced to 5 mln and then to 2.5 mln per per­son in the case of joint in­vest­ments by for­eign­ers.

This kept the mar­ket alive (in­clud­ing the sale of prop­er­ties by blocked ac­counts), while it is re­mark­able that some mea­sures (visas and pass­ports) to at­tract in­vestors were al­ready in place in Malta, Spain, Greece, Por­tu­gal and even Bri­tain, with the first be­ing Canada. Most of them have a con­di­tion of buy­ing state bonds, as is the case of Malta, while in oth­ers the visas are given only for res­i­dence with­out en­sur­ing the stay of the en­tire fam­ily of the in­vestor and this for short pe­ri­ods (Greece), while in oth­ers rel­a­tives of the in­vestor are pro­hib­ited to live in the coun­try they are in­vest­ing, as is the case of the UK.

The cur­rent Min­is­ters of Fi­nance and In­te­rior em­braced the is­sue and in the face of com­pe­ti­tion sub­mit­ted var­i­ous im­prove­ments, such as new tax in­cen­tives, while the trou­bled sit­u­a­tion in the Mid­dle East also helped Cyprus not only be­cause of its, but also be­cause of other ad­van­tages such as reli­gion, as is the case of Egypt’s Copts, Rus­sians, Ukraini­ans, and Ar­me­ni­ans who pre­fer this coun­try.

This re­sulted in per­ma­nent res­i­dence visas with the Chi­nese the most at­trac­tive for Paphos de­vel­op­ers. How­ever, the over­charg­ing that fol­lowed and rip­ping off in­vestors where units were sold for EUR 300,000 re­gard­less if they worth 150,000 was the worst that could hap­pen. At the time, we wrote to the Chi­nese em­bassy here that some of th­ese cases were scams, ad­ver­tis­ing on the in­ter­net (as Chi­nese bro­kers wanted a 20-25% com­mis­sion) and now most Chi­nese have turned their backs on us. To that end it did not help that the planned in­vest­ment to build a 500,000 sq.m. mall at the old Lar­naca air­port went sour, es­pe­cially when the Chi­nese mul­ti­mil­lion­aire was branded a crook, for which the op­po­si­tion par­ties are mostly to blame. For­tu­nately, we found an Egyptian in­vestor for EUR 200 mln for the Ayia Napa ma­rina, and de­spite some noise by en­vi­ron­men­tal­ists and some an­tiq­ui­ties that were found, he did not change his mind.

So, cir­cum­stances once again came to our res­cue, even though we could have dealt with th­ese cases in a bet­ter way.

It is not yet clear if Rus­sia’s new “de-off­sho­ri­sa­tion” pol­icy will be in our favour or against us. Per­haps, the un­cer­tain po­lit­i­cal sit­u­a­tion in Rus­sia may be pos­i­tive for us as many Rus­sian off­shore com­pa­nies will now look to es­tab­lish fully staffed of­fices in Cyprus, re­sult­ing in more for­eign em­ploy­ees, spend­ing, fam­ily hol­i­days, etc. Re­cently, the Repub­lic pro­posed new plans for tax­a­tion of such em­ploy­ees so that man­agers who are the de­ci­sion mak­ers en­joy the same in­cen­tives in Cyprus as the com­pany own­ers and in­vestors.

Of course, state­ments by the Rus­sian Pres­i­dent to in­vestors (“see what hap­pened to you in Cyprus”) did not help ei­ther, but we hope that with Pres­i­dent Anas­tasi­ades’ per­sis­tence, they will grad­u­ally over­come th­ese con­cerns.

To para­phrase AKEL leader Demetris Christofias’ “de­fend AKEL at all cost”, we should say “de­fend Rus­sian in­vestors at all cost”. Don’t think for a mo­ment that Cyprus is a haven of oli­garchs and the elite Rus­sians, as there are oth­ers from the eco­nomic mid­dle class who love this is­land. The last in­vest­ment we heard about is the cre­ation of a play­ground in Pla­tres in 1-2 months, not to men­tion the mil­lion­aire who wants to buy a trout farm in the moun­tain re­sorts just to keep his fa­ther “oc­cu­pied with some­thing”.

In an un­re­lated devel­op­ment is the new law for civil part­ner­ships as Cyprus is one of only 20 states to al­low it that could re­sult in more peo­ple com­ing here for their part­ner­ship cer­e­monies. As a firm, we have al­ready re­ceived in­quiries, but we’ve made it clear that they still need to in­vest EUR 300,000 to buy a home. But if we look at this mat­ter dif­fer­ently, we could see a new im­pe­tus to the prop­erty mar­ket.

Ev­ery­one has his own in­ter­est, you may say, but this devel­op­ment is of great ben­e­fit to lawyers, ac­coun­tants and es­pe­cially mu­nic­i­pal­i­ties who earn mil­lions of in rev­enues from civil mar­riage cer­e­monies.

Let’s keep an open mind, and as a Ser­bian cou­ple told us, while in­quir­ing about civil part­ner­ships, “give us a chance, there are mil­lions of us”.

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