1. General Information about: 1)Obtaining Permanent Residence Permit in Cyprus and 2) Schemes of Naturalisation for foreign Investors

2. Permanent Residence in Cyprus The holder of a P.R. permit is automatically allowed to move to Cyprus permanently, stay in Cyprus for an indefinite period of time and travel in and out of Cyprus any time he/she wishes with no restrictions. Dependants of the P.R. applicant may also be included to the P.R. application of the applicant. Access to Europe: Depends on the tactic that each Member State follows so the best thing will be to contact the Embassy of the State that the holder of a P.R. permit wants to visit A holder of the P.R. permit and his/her family are not allowed to work or to be engaged in any form of business in Cyprus. If a Non-European decides to live with his family, if any, in Cyprus permanently, before acquiring a P.R., he/she has to apply for a Temporary Residence Permit.

3. Procedures for obtaining a P.R. Permit The Fast –Track procedure – Regulation 6(2) The Fast –Track procedure according to the decision of the Minister of Interior of Cyprus at 22/08/2012 is much easier, quicker and it addresses to applicants with specific financial criteria. CRITERIA  Fixed Deposit of €30.000 lodged for three (3) years in a Cypriot Bank.  The total annual income of the applicant and his/her spouse needs to be at least €30.000. This annual income should increase by €5.000 for each dependant of the applicant. It is important to prove that the income derives from abroad.  The applicant has to purchase a dwelling or other building of a minimum market value of €300.000 plus VAT. By the date of the submission of the P.R. Application the Applicant has to prove that he/she has already paid at least the amount of €200.000 plus VAT that must also be proven to have been transferred from abroad.  It is acceptable for the applicant to purchase up to two housing units (apartments or houses) which might be independent, or one housing unit and a shop of a surface of up to 100 sq.m. or a house unit and an office of a surface of up to 250 sq.m. provided that the total market value is at least €300.000 plus VAT. THE SAID PURCHASE MUST BE IN RELATION TO A DWELLING SOLD FOR THE FIRST TIME BY A DEVELOPMENT COMPANY.

4.  “Dependant” means the spouse of the Applicant and children under the age of 18.  Unmarried children aged between 18 and 25, who may prove that they are students or undergraduates and are financially dependent on the applicant may submit a separate application for P.R.. The said permit is still valid even if the holder has exceeded the age of 25 years old for as long that he/she is a student.  A P.R. PERMIT MAY ALSO BE GRANTED TO CHILDREN OF THE APPLICANT OVER THE AGE OF 18 WHO ARE NOT FINANCIALLY DEPENDENT OF THE APPLICANT PROVIDED THAT THE MARKET VALUE OF THE AQUIRED PROPERTY ATTRIBUTED TO EACH SUCH CHILD IS AT LEAST €300.000 PLUS VAT.  The applicant and his/her spouse shall confirm that they do not intend to be employed in Cyprus in any direct or indirect manner. It is noted that the applicant and his/her spouse may be shareholder/s in a company registered in Cyprus and the income from the dividends of such a company in Cyprus are not deemed an impediment for the purpose of obtaining a P.R. permit.

5. CRITERIA  The total annual income of the applicant and his/her spouse needs to be at least €30.000. This annual income should increase by €5.000 for each dependant of the applicant. It is important to prove that the income derives from abroad.  The applicant has to purchase a property in Cyprus of any market value. At the time of the submission of the application the purchased price has to be paid in full.  Under Category F the applicant can purchase a resale property of any market value.  The applicant needs to show his/her intention to emigrate in Cyprus.  “Dependant” means the spouse of the applicant and the children up to the age of 18.  The adult children of the applicant need to file their own application under Category F. The Standard Procedure This kind of application has no certain financial criteria. All the factors and circumstances of the applicant are taken into consideration for its acceptance or rejection. The entire financial status of the applicant and family, is the key for a successful application.

6. . COMPARISON OF THE TWO PROCEDURES REQUIREMENTSREGULATION 6(2)CATEGORY F Property of market value €300.000 plus VAT at least X Fixed Deposit of €30.000 lodged for three years X Resale Property of any market value X Dependants (Spouse and Children up to the age of 18) XX Dependants (Adult Children) X Approved QuicklyX

7. FREQUENTLY ASKED QUESTIONS 1.Is it possible for relatives (i.e. two siblings) to purchase a property of a market value of €600.000 and both apply under Regulation 6(2) for a P.R. Permit? No. This is not possible as the policy specifies that a P.R. Permit may also be granted to children of the applicant over the age of 18 who are not financially dependent of the applicant. Also, please note that this opportunity is given only under Regulation 6(2) and it cannot be used under Category F. 2. Can an applicant purchase a resale property of a market value of €300.000 and apply under Regulation 6(2)? No. In order to apply under Regulation 6(2) the property has to be sold for first time. 3. What is the difference between the permit issued under Regulation 6(2) and Category F? There is no difference between the permit issued under the two procedures. It has exactly the same effect. What differs are the criteria of each procedure and the examination period under each procedure and the fact that the applicants that obtain a P.R Permit under Category F cannot even be shareholders in a Cyprus company. 4. What is the timeframe for the approval under both procedures? Category F  6 to 9 months Regulation 6(2)  up to 2 months

8. 5. How much is the fee for the submission of an application? The fee payable to the government for each application submitted is €500,00. After the approval of the application the amount of €70,00 is payable for each member of the family in order to issue an alien book. 6. Does the applicant need to show at any time that he/she took actual possession of the property? It is not necessary for the applicant to show that actually took possession of the property as after the approval of the P.R. the Ministry does not require any further information regarding the applicant. 7. Is it possible for an applicant to purchase an of plan property and apply for a P.R. Permit? Of course it is possible. The necessary documents that we need to provide to the Migration are the stamped contract and receipts that the applicant has paid at least €200.000 by the time of submission of the application. 8. How much does the applicant need to pay for the property before we submit the application? Under Category F  the full amount of the purchase price has to be paid by the time of submission Regulation 6(2)  at least €200.000 plus VAT

9. REDUCED 5% VAT POLICY If the application for the town planning permit of the property purchased by the client was submitted after the 1 st of May 2004, the date when Cyprus entered the European Union, then the property is subject to VAT payment which currently is 19%. However, due to an amendment in the VAT legislation, a non- EU national can now apply for payment of the reduced 5% VAT instead of 19% on the purchase price of the property, provided that he/she will use the property as his/her permanent residence in Cyprus. The criteria for applying for the reduced 5% VAT are as follows: -Property cannot exceed 275 sq.m. of total covered areas. -Total covered areas includes the following: (a) 5 sq.m. for mechanical installations rooms, (b) 7 sq.m. of storage rooms, (c)36 sq.m. of covered car parking spaces, and (d)40 sq.m. of covered verandas. If the property meets the above criteria then the first 200sq.m. of total covered areas can qualify for the reduced rate. -Furniture, white goods, the garden etc cannot be included in the purchase price.

10. In case the client will take advantage of the VAT Regulation then the following restrictions are in effect: (a)Cannot rent the property for a period of ten (10) years; and (b)Cannot sell the property for a period of ten (10) years. It is noted that if he/she wishes to sell the property before the lapse of ten years then a proportion of the VAT saved initially will have to be paid.

11. According to sub-paragraph (2) of Clause 111A of the Civil Registry Laws of 2002-2013 the Council of Ministers has the power to enforce the naturalization of foreign investors, under any terms and conditions it imposes from time to time. As a result the Council of Ministers, on the 19 th of March 2014 revised its previous decision dated 24 th of May 2013 concerning the criteria and conditions for the Naturalisation by exception of non-Cypriot entrepreneurs investing in Cyprus. Additionally, the aforementioned decision of the Council of ministers provides for the grant of the Cypriot citizenship to the spouse, the minor children as well as the financially dependent adult children (18 years old or above) of the investor, provided that they are students up to the age of 28 and are attending an institution of higher education in order to obtain a diploma or an undergraduate or a masters degree. Neither the spouse nor the children are obliged to meet any financial criteria. The Announcement of the Council of Ministers defines that a non-Cypriot citizen, who meets one of certain economic criteria, either personally or through a company or companies in which he/she participates as a shareholder, proportionally based on the percentage of participation, or even as a high ranking senior manager of a company or companies that meets one of the financial criteria, may apply for the acquisition of Cypriot citizenship through the Naturalization by exception scheme. NOTE: For the purpose of this presentation we will refer only to the criteria regarding investment through real estate either solely or through a major collective investment scheme. Schemes of Naturalisation for foreign investors

12. The Applicant must have made an investment of at least €5,0 million for the purchase or construction of buildings or for the construction of other land development projects (residential or commercial developments, development in the tourism sector or other infrastructure projects). It is noted that the VAT is neither included in the amount of €5,0 million for the “Direct Investments”, nor in the amount of €500.000,00 required as a minimum purchase value of the privately owned residence. Also, according to the contents of the Council of Minister’s Decision, the eligible investment is not limited to properties purchased for the first time. Criteria A.3. Investment in real estate, land development and infrastructure projects

13. The Applicant must have made an investment of at least €5,0 million in the purchase, creation or participation in businesses or companies, that are based and operating in the Republic. These businesses or companies should evidently have a tangible presence in Cyprus (i.e. maintain their offices in Cyprus) and employ at least five (5) Cypriot citizens. A.4. Purchase or creation or participation in Cypriot businesses or companies

14. The Council of Ministers shall have the right on special occasions, to reduce the above criteria to €2,5 million for investors, who demonstrably participate in a special collective investment scheme, provided that the total value of the investment is at least €12,5 millions. As “Major Collective Investment” is considered any investment made by a group of at least 5 people depositing their applications for naturalization simultaneously. Due to the fact that most of the clients are interested in investing through a major collective investment scheme we will present a number of options that can be suggested to potential clients of the company. A.8. Major Collective Investments

15. Option A Purchase of a privately – owned residence of at least €2.5 million plus VAT (if any) In this case the client is not obliged to buy a further privately owned residence of purchase value of €500.000. However, the client is not entitled to sell the privately owned residence for a period of three (3) years after the approval of his/her application. In case, he/she wishes to dispose the property after the lapse of the three year period, he/she will have to replace the investment with a property of at least €500.000 plus VAT (if any). An advantage of this option is that possibly the client will be able to claim reduced VAT of 5% on the purchase price of the residence provided that the VAT requirements are met (i.e. the square meters of the residence do not exceed the 275 sq.m. etc). However, in this case he/she will not be able to rent the property for ten years after the VAT approval. Investment Options Through Major Collective Scheme

16. Option B Purchase of several residential properties of purchase price at least €2.5 million plus VAT (if any). The client has the option to purchase as many properties as he/she wishes irrelevant of the purchase price of each unit as long as they are all residences and the total purchase price of all properties is at least €2.5 million plus VAT (if any). In this case the client may dispose the properties after the lapse of a three (3) year period with exception of one or more units of a total value of €500.000 plus VAT (if any), which he/she must maintain as their permanent residence/s in Cyprus. The advantages are: - Can claim reduced VAT of 5% on the purchase price of one of the residences provided that the VAT requirements are met. - Can rent all the properties except the one that he/she claimed VAT for.

17. Option C Purchase of several property units (residential and commercial) of a total value of at least €3.0 million plus VAT (if any). In this case the client can claim reduced VAT of 5% on the purchase price of one of the residences provided that the VAT requirements are met. Further, he/she can rent all the properties except the one that he/she claimed VAT for. The difference of Option C in comparison to Options A & B is that it is mandatory to purchase a privately-owned residence/s of a purchase price of at least €500.000 plus VAT (if any) in case the client wishes to invest in commercial units of a total market value of at least €2.5 million plus VAT (if any).

18. Option D Investment of €2.5 million plus VAT in real estate through a company incorporated in Cyprus in which the client is a shareholder, plus a privately- owned residence/s of at least €500.000 plus VAT (if any). The main advantage of this option is that the company has the right to sell immediately the purchased properties before the lapse of the three year limitation period. However, the company must maintain its tangible presence in Cyprus (buy or rent offices) for three years after the approval of the application and must also actually employ five (5) Cypriot citizens in the Company for a period of three (3) years and pay all arising expenses, taxes, salaries, social insurance contributions, etc. Properties purchased by the company are subject to VAT (if any) except from the privately-owned residence, for which the client has the right to apply for the reduced rate of 5% VAT (provided that the requirements are met). Also, an important advantage of this option is that the company of which the client is a shareholder may registered at the VAT authorities as a property trader and therefore recover the VAT paid on the properties the Company purchased, upon selling these and charging VAT to its clients.

19. CONCLUSION The choice of the best option depends on the certain case, needs, circumstances and financial ability of each individual client. Eventually, it is in the power of the sales person to discuss with each potential investor and help him make the right decision with respect to the properties that he/she will purchase. However, it is of paramount importance that each potential investor also seeks the advise of his/her legal advisor who will be in a position to demonstrate in detail the most effective and legally correct way to proceed with the investment.

20. TOUREDIMA Business Consultancy Tourism @ Real Estate @ Digital Marketing Cellphones : GR 0030-6977483408 - CY 0035797892008 ttouredima@gmail.com www.touredima.com Skype : theodoulosth touredima@gmail.comwww.touredima.com