CYPRUS’ citizenship-by-investment programme has yielded €2.5bn in revenues for the government since 2013, Interior minister Socratis Hasikos told lawmakers on Friday.
Presenting the ministry’s 2016 budget, Hasikos told the House Finance committee that the programme, which affords wealthy foreigners the Cypriot nationality if they park €5m of deposits into a local bank or invest an equal amount in shares or bonds in Cyprus, or if they buy property worth at least €300,000, has exceeded expectations, but declined to reveal the number of investors who took advantage of the scheme.
Necessary conditions for eligibility to the programme is that the money invested was previously kept abroad, and that the applicant does not work in Cyprus.
The Interior minister said this income has helped Cyprus weather the tough times of crisis in previous years, and noted that naturalisation is linked to investments, property sales, deposits, and the trading of shares.
However, Hasikos said, considerable pressure is being applied by the European Union on Cyprus to amend the scheme’s eligibility criteria, which the government is resisting.
“We had told the EU that we instituted the programme as a temporary measure to combat the effects of the financial crisis,” Hasikos said.
But, he said, the programme is not being abandoned, and a struggle is underway to keep it going.
Hasikos assured lawmakers that applicants are screened extensively before being granted citizenship.
“We don’t approve terrorists or drug dealers – there are thorough checks before a foreigner is naturalised,” he noted.
Meanwhile, the Interior minister also told the committee that the government will offer municipalities assistance in dealing with their debt burdens, provided they cut back on their payroll by 30 per cent.
The government, Hasikos said, will undertake repayment of approximately half of municipalities’ accrued debts, which total €500m.
Additionally, municipalities and local councils will be given the means to collect €120m annually through fees and taxes – an increase on the €93m per year they receive under the current regime – but only if they undertake to consolidate their payroll, which accounts for roughly 60 per cent of their total expenditure, by about a third.
Hasikos clarified that not a single municipal employee will be fired. Instead, cutbacks will be effected via “interchangeability” – meaning staff will be moved to other departments as needed – and retirement schemes.