The Cyprus Citizenship has emerged as the biggest and most successful citizenship by investment schemes in the World.  The scheme collected some 6.6 billion euros in 5 years granting citizenship to 1,864 a comparatively small number of HNW foreign investors. This figure is almost 6x times than that of Malta

A study conducted by Finance ministry shows the impact of CIP boosting real estate and construction, employment sector, increase in VAT revenues and reducing debt

From 1 June 2013 to 15 August 2018, the study reported

• 1,864 foreign investors granted citizenship
• €6.6 billion total investments received with each investor investing €2 million euros or more
• 30% increased VAT revenues
• Over 2000 jobs created

The following are break-down of CIP investments amounting to €6.6 billion

• Real estate –  € 3.7 billion
• Cypriot Businesses – € 1 billion
• Bank deposit / Credit institution –  € 713.3 million (writing down deposits reached € 519.1 million)
• Government and corporate bonds –  € 579.8 million
• Other Investments – € 133.6 million
• Shares – € 7.9 million

Real Estate

The real estate sector survived the worst cyprus economy crisis in 2013 and now had fully recovered  thanks to the CIP and foreign investment.

Under the Investment citizenship, the break down of real estate investments are as follows

* Revision of investment scheme

According to the findings of the study between 2017-2018 property prices rose from 0.2% to 1.7%.

• Last year, the average increase was 1.3%. The increase is mainly for apartments in Limassol and Paphos. Residences increased from 0.4% to 1.1%, while apartments from 3.1% to 4%.
• Famagusta also had a significant increase in housing.
• Nicosia and Famagusta have a very small number of sales to foreigners and even fewer sales in excess of 500,000 euros. In addition to rising property prices, rent increases were also observed.
• Limassol records the largest increase in rental prices compared to other cities.
• In Limassol, the rise in rental rates is above the average.

• Russians buy apartments in Limassol.
• Larnaca popular with Lebanese buyers for apartments.  In Larnaca, growth is small and is generally due to increased demand,
• In Paphos homes and apartments are purchased by Russians and Chinese nationals, the Chinese mostly prefer residences and the Russians of both.
• Famagusta is Russian, Lebanese and Chinese.
• Nicosia has a small number of transactions and any increase is not due to the program.
• Famagusta also has a small number of transactions and the effect of the program is on the dwellings.

The added value of the construction sector increased by € 110 million in 2016, € 207 million in 2017 and € 150 million in 2018.

Loans

The positive is the reduction of red loans by € 2.3 billion in construction. End-September non-performing construction loans were € 1.4 billion and € 769.3 million in real estate management. 

Other sectors of the economy, such as consumption, professional services, education, tax revenue, have also been positively affected.

Employment

The study clarifies the impact of the investment project on naturalization on employment. In particular, from the naturalization program in 2016 an additional 341 employees were employed, an additional 638 people were employed in 2017 and 1,265 were employed last year. 

The number of employees across the construction sector has increased significantly. In 2016 the total number of employees in the construction sector was 1,970, in 2017 their number reached 3,020 and in the first nine months of 2018 the number was 3,357.

VAT Revenues

State revenue from VAT receipts from the construction sector increased by 30% between 2016 and 2017. In 2018, revenue is expected to exceed 2010 levels of € 273.8 million.

Read more here