Cyprus in­vest­ment-linked pass­port scheme lures £4bn over 4 years

The Star (St. Lucia) - - BUSINESS - By He­len Burggraf

A pass­port-for-in­vest­ment pro­gramme launched four years ago by the Cypriot gov­ern­ment to re­build its econ­omy, in the wake of the fi­nan­cial cri­sis, is be­ing widely re­ported to have seen more than £4bn (US $4.5bn) pour into the coun­try as wealthy for­eign­ers choose to in­vest at least £2m in the coun­try in ex­change for cit­i­zen­ship.

Ac­cord­ing to such me­dia or­gan­i­sa­tions as the Cyprus Prop­erty News and Bloomberg, the scheme, which en­ables non-EU cit­i­zens to pur­chase Cypriot pass­ports and res­i­dency per­mits by in­vest­ing at least £2m in Cyprus prop­erty or £2.5m in gov­ern­ment bonds or com­pa­nies, has been par­tic­u­larly pop­u­lar with Rus­sians who, is­land sources say, have ac­counted for roughly half of those who have signed up thus far.

“This Moscow-on-the-Mediter­ranean has blos­somed as Rus­sians and their money flock to the tiny Euro­pean Union out­post to be­come, in a sense, not Rus­sian,” the Bloomberg re­port noted, af­ter de­tail­ing how shop signs writ­ten in Cyril­lic have be­come “abun­dant” in cer­tain dis­tricts of the is­land.

In Li­mas­sol, the sec­ond­largest city on the is­land af­ter Nicosia, “yachts em­bla­zoned with Rus­sian monikers fill berths in a newly built ma­rina” the Bloomberg re­port adds.

Some 2,000 pass­ports on, the rev­enue earned from the pro­gramme now ac­counts for around 25% of Cyprus’s an­nual gross do­mes­tic prod­uct, the Cyprus Prop­erty News re­port notes, adding that it “has out­per­formed a sim­i­lar pro­gram in Greece by a huge mar­gin” and that it “is be­ing cred­ited with sav­ing the Cyprus real es­tate mar­ket amid fears that a bank­ing cri­sis could lead to its col­lapse”.

The Greek scheme, which is a visa-for-in­vest­ment pro­gramme, has been run­ning since mid-2014, and of­fers five-year res­i­dence per­mits to for­eign na­tion­als who spend more than £250,000 on real es­tate pur­chases, ac­cord­ing to the Cyprus Prop­erty News. It said the Greek au­thor­i­ties have thus far is­sued 1,573 res­i­dence per­mits to for­eign in­vestors in Greek real es­tate, with most of the visas hav­ing gone to Chi­nese na­tion­als (664), fol­lowed by Rus­sians (348), Egyp­tians (77), Le­banese (73) and Ukraini­ans (67).

Such pass­port- and visa-for-in­vest­ment schemes have at­tracted some un­wel­come pub­lic­ity in re­cent years, as they have been launched and ex­panded in the wake of the global fi­nan­cial cri­sis. In the Euro­pean Union in par­tic­u­lar, crit­ics have ar­gued that they are a po­ten­tial door­way for wealthy but po­ten­tially un­de­sir­able el­e­ments to come in, and give wealthy peo­ple an un­fair ad­van­tage over or­di­nary peo­ple.

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