By Stelios Orphanides
Finance Minister Harris Georgiades said the government is ready to provide information related to its controversial citizenship-by-investment scheme and have it scrutinised together with that of other member European Union member states, Politis reported on Tuesday.
The finance minister, commenting to the daily newspaper, also announced the publication of an independent study which will highlight the economic impact of the scheme and added that reports that the impact, while positive, was in the range of several billion euros were “wrong and misleading”.
The scheme allows foreign investors to acquire Cypriot citizenship within months by investing as little as €2m in assets or companies, including real estate. Until September 2016, when the cabinet modified the scheme relaxing its financial criteria, investors were required to invest as much as €5m or participate in a collective investment with a minimum of €2.5m per person totalling at least €12.5m.
According to official data, the scheme has allowed 1,685 foreign investors and 1,651 family members to acquire Cypriot citizenship from 2008 to 2018. According to press reports, the version of the scheme introduced in 2014 and subsequently repeatedly revised to exclude bank deposits or the acquisition of government bonds as criteria for eligibility generated an investment inflow of up to €4.8bn.
A week ago, a spokesperson for the European Commission said they were planning to carry out a study into these type of schemes, also implemented by several other member states of the EU, dubbed as Golden Visas. The decision came after reports on the websites of the Organised Crime and Corruption Reporting Project (OCCRP.org) and The Guardian, prompted anti-corruption watchdog Transparency International to warn that Golden Visas are vulnerable to abuse. They also undermine the fight against corruption and the increase the risk of money laundering.
In his interview to Politis, Georgiades defended the Cypriot scheme against criticism, which he said was unjustified. Total naturalisations of foreign citizens in Cyprus account for only 0.3 per cent of total naturalisations in the EU, while the Cypriot Golden Visa scheme accounts in turn for only 30 per cent of total naturalisations, he continued.
The minister added that investment (projects) in the real economy remain the focus of the scheme and that they continuously undergo an evaluation process.
On January 9 the council of ministers decided to introduced a “Supervision and Control Committee” comprised of officials from the ministries of interior, finance and from the Cyprus Investment Promotion Agency (CIPA), a government-sponsored body tasked with attracting investment to Cyprus.
The decision also provides for the setting up of a register of “Investors’ Naturalisation Scheme Service Providers” in which individuals and legal entities that offer related services will be registered after meeting certain “entry criteria”. The scheme will also ban advertising the visa programme.
Chairman of CIPA Michalis Michael said a week ago that the body was about to introduce stricter criteria and procedures governing the Cypriot Golden Visa programme, with the inclusion of a registry of related service providers, as instructed by the cabinet on January 9.