Cyprus’ citizenship by investment scheme is to be mobilised in efforts to generate revenue for the state which according to scenarios prepared by the Finance Ministry will face financing needs of between €3.6b and €5b to deal with the fallout from the coronavirus pandemic.
Citing sources, Phileleftheros said that regulations setting terms and conditions to grant citizenship for reasons of public interest as well as to non-Cypriot businessmen and investors in derogation of the preconditions are to be tabled in parliament after Easter.
The draft regulations have been checked by the three member ad hoc committee responsible for checking the citizenship process which has submitted its own proposals.
The regulations will set out with transparency the conditions under which investors can obtain citizenship. Once these are approved, the vetting process will be accelerated for the hundreds of pending applications.
So far, 100 applications have been approved and there are another 700 pending.
Using the citizenship by investment scheme to boost state finances is also one of the proposals some political parties had included in the various ideas they submitted to Finance Minister Constantinos Petrides.
Phileleftheros said that as soon as the coronavirus crisis broke out, the government decided to accelerate vetting of applications — including it as one of the 27 measures urgent measures to deal with the economic fallout.
Political parties believe that using the citizenship scheme, subject to the necessary tests, will generate about €1 b for the state and will also help restart the construction sector which is also struggling under the lockdown.
According to Finance Ministry figures, since 2013, the citizenship scheme — which required an investment of €2.5 m — has generated a total of €6.6 b for the economy. Finance Ministry figures show that 1.2% of GDP is linked to scheme.
The government had recently decided to revoke 29 citizenships from foreign investors but there are practical difficulties as the law does not cover revocations. It has moreover reinforced the legal framework, setting a ceiling to the number of citizenships by investment and introducing tougher checks.
Phileleftheros reports that at the same time, there are signs of increased pressure from the EU which is asking for a plan to show the gradual reduction and elimination of such schemes.
By Eleftheria Paizanou