India’s wealthy have long coveted foreign passports. Some see it as a ticket to easier tax regimes and more business friendly climates. Others desire for a more western lifestyle or the ability to study, work or travel abroad with ease. For rich Indians looking for citizenship in Cyprus is becoming an increasingly popular choice, thanks to its “golden visa” program. The residency or citizenship can be acquired via investment.
Why citizenship in Cyprus?
One of the most important reasons: the ease of doing business. Indian businessmen find it very complicated to get various permissions for the real estate sector in India. Then, of course, there is the major problem of the rate of interest the builders are charged.
Cyprus seems to appeal not just to high net worth Indians in India. Also it works to wealthy Non-Resident Indians (NRIs) in cities like London or Dubai. For those the biggest draw mentioned is the quality of life the move offers. Cyprus is a place with constant sunshine, swimming pools and easy access to the most beautiful beaches in the world.
The island’s more tax-friendly business climate, and varied investment opportunities are an added bonus for new businesses.
What the process is like
While it may seem daunting to make the switch to a whole new country, it can actually be a very smooth process. You just work with consultants that specialize in enabling your move. There is quite a number of firms specializing in assisting high net worth individuals with the Cypriot citizenship-via-investment processes.
Cyprus offers the quickest route to European citizenship through the investment program. The investment can be made by a purchase of a €2 million home in Cyprus. You can invest €2 million into land development, infrastructure projects, businesses, or funds in Cyprus with an additional €500,000 invested in a home.
For a Permanent Residency Visa, applicants are required to invest €300,000 plus VAT in real estate, and comply with annual income criteria. There’s no obligation to reside in Cyprus, a short visit once in two years is sufficient. After seven years of residency, you are entitled to apply for naturalization and obtain a citizenship in Cyprus.
In either case, the process usually takes approximately three to six months.
What are the benefits?
Once you have citizenship in Cyprus or residency, as long as you spend at least 60 days a year in Cyprus and less than 183 days in any other country, you are eligible to be a tax resident in Cyprus. And this can be extremely tax efficient for most people making the switch.
Cyprus has one of the lowest corporate income tax rates in the EU. Tax rate at 12.5% can be further reduced to as little as 2.5% by applying Notional Interest Deduction (NID). Also, there is no capital gains, inheritance or estate tax, and significantly, there is zero tax on dividends. So it can make a lot of sense financially for Indians.
Family members of the primary applicant can also easily acquire Cyprus residency or citizenship. Spouses and children under 18 years are included. Adult children until the age of 28 are eligible until the age of 28 if they can show that they are financially dependent on the primary applicant.
This makes it especially appealing to wealthy Indians who tend to live with large families and have family-run businesses.
The Cyprus citizenship-via-investment has been popular with millionaires from other countries for several years now. It is understandable why more and more wealthy Indians are keen to avail of it too.
But the Cypriot government announced that it will limit the number of naturalizations of investors to 700 a year.
It will be interesting to see how this policy update will impact the aspirations of high net worth Indians wanting to relocate to Europe. Perhaps it will make citizenship in Cyprus even more desirable.