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Cypriot Investment Scheme
Repossession Property Yield Properties

Latest news

  • 3 October 2018 Newzoe Developers in cooperation with Palourtis Estates at Cyprus- Lebanon Business conference " Invest in Cyprus"

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  • 26 September 2018 Citizenship by Investment Property Fair in Cairo, Egypt

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  • 20 September 2018 Newzoe Developers in cooperation with Palourtis Estates will be present at this year's Invest in Cyprus Exhibition.

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  • 17 September 2018 Standard and Poor raises Cyprus credit rating to BBB

    Cyprus got its investment credit worthiness back on Friday as Standard &... read more

  • 12 September 2018 Larnaca to get its first Mall

    Larnaca is set to see the construction of its first Mall within the next 18... read more

Cypriot Investment Scheme
Repossession Property Yield Properties

Latest news

  • 3 October 2018 Newzoe Developers in cooperation with Palourtis Estates at Cyprus- Lebanon Business conference " Invest in Cyprus"

    read more

  • 26 September 2018 Citizenship by Investment Property Fair in Cairo, Egypt

    read more

  • 20 September 2018 Newzoe Developers in cooperation with Palourtis Estates will be present at this year's Invest in Cyprus Exhibition.

    read more

  • 17 September 2018 Standard and Poor raises Cyprus credit rating to BBB

    Cyprus got its investment credit worthiness back on Friday as Standard &... read more

  • 12 September 2018 Larnaca to get its first Mall

    Larnaca is set to see the construction of its first Mall within the next 18... read more

Limit on passports to investors

   

Setting a limit on naturalization of foreign nationals per year, regulating and banning advertising to attract high-income people and improving control procedures for granting citizenship are the key measures the government is considering to preserve Cyprus's reputation as an investment destination and entertain the concerns expressed at European level and blaming our country for issuing passports of convenience.

The Ministries of the Interior and Finance in cooperation with the Cypriot Investment Promotion Organization (CIPA) are oriented towards the above-mentioned measures, which concern not only the essence of the incentives to attract foreign investors, but rather focus on the prevention of bad practices by land developers and companies active on the real estate market.

"One thought is to put a ceiling on the number that the minister can assign citizenship to foreign investors so that we do not have the impression that we are sharing passports, which is certainly not the case," Finance Minister Haris Georgiades says in "F".

Stronger is the Interior Minister, Constantine Petrides, referring to the misleading advertisements of developers or intermediaries, stressing that "these people are not responsible for the European name being denigrated by the name of Cyprus".

In the light of the international press reports that occasionally present Cyprus as a tax paradise or money laundering business, Petrides also said that despite the intense efforts made by his predecessor, the problem with uncontrolled advertising remains.

"Efforts to reconcile some have failed, and so in October, very tough measures will be taken in terms of both advertising and the use of unethical and misleading methods," the minister said.

"We have thoughts along with the Ministry of Ecology and with CIPA, even for a complete ban on advertising," he says.

Asked whether there are cases of entrepreneurs who, on the basis of their political interconnections, promise that they can more easily secure citizenship for their prospective clients, K.Petridis replied:

"Some rumors have come to us but there is nothing substantiated right now, without implying that a better control system can not be studied. It's something we have in our thoughts. "

Invited to say whether the existing foreign-citizens' naturalization plan for investment hikes needs revision, he said that besides the problem of advertising and perhaps the improvement of the control system, some other minor changes can be considered to amuse the concerns are formulated in Brussels, but will not greatly influence the substance or philosophy of the project. "We think it is a well-designed project with very rigorous controls similar to those of other European countries," he says. 

The Interior Minister reiterates that the noise caused is excessive because, as he said, this plan has in no way yielded the figures that have been publicized since we are talking about 1,300 naturalization from 2013 until now.

On the same issue, Finance Minister Haris Georgiadis adds that the Cyprus attraction plan is too small in size for the data of Cyprus, but mainly at European level the Cypriot naturalization does not exceed 0.3% of the total number of naturalization .

Haris Georgiadis reiterates that the plan offers the possibility of acquiring the Cypriot passport to investors who have acquired real ties with the country, a permanent residence, ie a real investment. The period of permanent residence in the Republic of Cyprus must also have preceded and a number of conditions such as the clean criminal record and clarification of the origin of the funds invested are certainly provided for.

Konstantinos Petrides and Haris Georgiadis reject passport sales as they state that the state does not receive a single euro. "They are written for billions but these things do not apply," says Mr Petrides. 

Asked to tell us the amount that corresponds to reality the Interior Minister said that it is wrong to talk about amount, because some investments are in equities, was old and bank deposits, so it is not placed funds in GDP is therefore not shown. So it's a mistake to say how much money came, mythologized and we give the wrong impression to the European Union. "

The Minister of the Interior recognizes the reservations expressed by many economists in Cyprus and internationally for such investment projects and said it was a matter of philosophy.

"And in the European Union, some people disagree on the philosophy of such plans, wherever they apply. If the EU decides to stop the investment plans, to discuss it at the highest political level, we do not target each other, "he added, arguing that such projects should not change continuously because the state should provide to prospective investors a stability. "We want to preserve the reputation of Cyprus as a serious investment destination," added Finance Minister Haris Georgiadis and stressed that the effort to attract investment is certainly not limited to the real estate sector nor is it exhausting with its exceptional plan naturalization versus investment.

The real estate boom and the bubble danger

In recent years development has been identified with real estate. Large buildings pop up one after another, targeting buyers from Russia, China and Arab countries, investing enormous amounts primarily for the acquisition of luxurious villas and apartments, exploiting the naturalization plan.

Prices are rising fast and while everyone recognizes the contribution of the plan to the revival of the economy after the shock of 2013, at the same time the voices warning about risks are rising.

One of them is Sophronis Clerides, Professor of Economics at the University of Cyprus: "In principle, the idea is good, the problem is that most projects - including the Cyprus issue - focus on real estate investments. A foreign investment in real estate yields far less benefits than an equivalent investment in activities such as the construction of a factory, the creation of a research laboratory or the establishment of a company headquarters (...) Citizenship is public wealth. If it is to be sold, it must be done in such a way that the distortions are minimized and the benefits disseminated to as many as possible. As Economist magazine recently wrote, it would be better for those interested to make a check in the name of the Republic of Cyprus. In the way it is implemented today, the plan benefits the few and creates enormous distortions that discourage investment in other sectors of the economy. It needs to be reviewed as soon as possible before it causes more damage. "

The Finance Minister, Harris Georgiadis, has been appeasing when we took into account the concerns about building a property bubble, concerns he knows. Concerns also expressed by the IMF in its report, which was made public yesterday. As he said, a prerequisite for creating a bubble is excessive lending to a particular sector, in this case real estate.

"There is no such data in front of us, most of the works created are almost self-financed" observed Mr. Georgiadis, but assuring that the sector of real estate enjoys very close monitoring of the economic team of the government.

"The plan helped boost the real estate and construction sector that was on a downward path but until that point," the minister notes and refers to the economic indicators to argue that growth has not come from real estate but from tourism, shipping, services and consumption. 

Concerns about the possibility of building a property bubble, the Minister of the Interior commented, as follows:

"My personal opinion is that the investment plan was not and is not big enough to be able to build a bubble on real estate. It is a plan that helped and helped deal with one of the biggest problems facing our economy, that of the Non-Served Loans, which had some professionals in the field of construction. Of course we should constantly monitor these things. "

According to the Interior Minister, economic indicators show that growth is healthy, and there are no signs of bubble buildup and the findings of the EU, the Troika and the rating agencies.

"We are the first country with the largest decline in unemployment, we are resuming in a healthy way, and this is now reflected in the unemployment rates, the latter being corrected after a crisis."

Development law and rapid licensing of large investments

Rational changes that will reduce bureaucracy, simplify procedures, and generally help create an investment-friendly environment, the ambitious development law prepared by the Home Office.

The objective is to facilitate the licensing of "large investments", ie investments that meet one of the four criteria listed below, which will be decided and will be changed by decision of the Minister, so that they can be adapted to the requirements of the economy, depending on the circumstances prevailing: 

● Capital 1. Capital injections
The proposed project should provide for capital investments of at least € 5 million, of which 75% should come from primary funds.

● Criterion 2. Creating jobs
Creating at least 80 new permanent jobs of any type or creating at least 50 new permanent jobs with a total annual salary of more than € 1 million.

● Criterion 3. Anchor company
An investment will be marked "big" if the applicant company is a well known multinational company of international reputation, which intends to operate in Cyprus. Transferring a delegation is not considered a big investment. 

● Criterion 4. Investing with an emphasis on research, development and innovation
An investment can be classified as 'big' if the investment is at least € 1 million and meets at least one of the following conditions: 

a. Research, development, innovation expenditure represents at least 10% of total operational expenditure or budget.

b. The company submitting the application qualifies as an "innovative business" based on the Income Tax Law.

c. The company has been sponsored by the Research Promotion Foundation or by the Ministry of Energy, Trade, Industry and Tourism for innovation, or sponsored by the EU (Horizon 2020) for research, development and innovation. 

"Investors are coming but shortened in procedures, it is a fact that we are lagging behind in competitiveness indicators and we want to finally overturn this picture," says Interior Minister K. Petrides and explains that a key novelty of the new legislative framework is the change of the fast track ).

The project manager, which is successfully applied in other countries, will be introduced, ie a manager will be designated as the project leader and the investor will be addressed to him. It will have the responsibility to speak to the relevant departments, to undertake the process, to monitor the timetables and consultations to be made on the basis of binding decisions.

It also provides for a change in the procedures for the issuance of town planning and building permits, which in the case of large investments will be issued by an Authority.

"The continuous meetings and consultations with endless go-gos are over," the interior minister said.

The bill has been audited by the Legal Service and after the finishing touches have been completed, it will be submitted as soon as possible to the Cabinet to be taken to the House. It will be part of the legislative package for the creation of the Ministry of Development, which is pending before the House.

What will be done with the investment-development law in the event that the bill for the establishment of the Ministry of Development does not pass through Parliament? "I can not tell you now. The creation of the Ministry of Development is a prerequisite for the law, "says Konstantinos Petrides and expresses the expectation that this great reform effort will not be broken down into feasibility.

"The road is long and the effort is great, because in addition to passing a law it needs good will and its implementation," he adds, stressing that this is a great innovation that involves a change of culture.

"The attraction of investors is not achieved with words, but they need projects and we did what we did," he underlined. 

http://www.philenews.com/eidiseis/politiki/article/436466/orio-sta-diabatiria-se-ependytes