Visas, passports and civil partnerships too!
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”.