limassol sea

9 March, 2020

Cyprus Workshop: The Present and Future of the Cyprus Investment Programme

On 5 March 2020, Henley & Partners participated in the first Cyprus Workshop, which was organised in Limassol by the Investment Migration Council (IMC) under the title of ‘Looking Ahead – the Future of the Cyprus Investment Programme’. With a base in Geneva, the IMC is the worldwide associate representing stakeholders in the field of investor migration and citizenship-by-investment.

Given that the Cyprus Investment Programme (CIP) injected new life into a construction and real estate sector that was on life support in 2013-2014, the Cyprus government is keen to protect the CIP, in particular against – sometimes valid – attacks. A few years into the programme it has become clear that the health and reputation of the CIP are contingent upon the professionalism of service providers and their ability to convincingly exercise due diligence. Furthermore, the importance of eliminating misconceptions among the public cannot be overrated. Only by presenting the facts and debunking a few stubborn myths, by pinpointing the concrete benefits that trickle down to almost every family, will the public truly understand the value of such a programme.

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A number of key points that were discussed during the event need to be underlined:

1. Investment migration, a growing industry

The investment migration industry was to a great extent stimulated by the globalized economy, which opened up the world and brought countries and businesses together across geographical distances. Currently there are almost 100 investment programmes being offered by different countries around the world, more than half of which were launched only in the last 20 years. The reason this industry continues to grow is because it generates billions of euros that benefit the wider public, either directly or indirectly. According to the IMC’s Chief Executive, Bruno L’ecuyer, the industry is destined to grow.

2. For the many or the few?

The CIP and similar programmes are often criticized as being the privilege of wealthy individuals, contrary to claims that investment migration benefits everyone. The first point worth mentioning is that in most cases (and this is where due diligence comes into play) wealthy people are successful business people who are always seeking new enterprises and often actively engage in the local economy of their second home – something which is always welcome.

The second thing to point out is that the minimum required investment varies significantly from country to country. Obviously the more desirable destinations set a higher minimum investment. While the investors who can afford to apply for second citizenship may be privileged, the country granting citizenship stands to gain the most. Each country can design its programme individually, in order to channel foreign direct investment toward sectors where it is needed the most and will benefit the greatest number of people. Often that could be through demand for supporting services, new businesses and of course jobs – not to mention the public revenue from taxes, which reduce the national debt and ultimately benefit the broader population.

3. Establishing high standards

Another misconception among the public, especially in Cyprus, is that “anyone can become an investment migration professional”. The IMC’s Bruno L’ecuyer flatly rejected that assertion. In fact, investment migration service providers harnass the collective experience and expertise of lawyers, due diligence providers, accountants, financial advisors, real estate and asset acquisition consultants.

Furthermore, what the IMC aims to do is to establish high standards across the field. To that end it offers specialized training courses which not only set solid foundations but keep professionals up to date on the latest developments and new programmes. Completion of the IMC’s programme leads to ‘Certification in Investment Migration’.

The European Commission’s role

One argument that is often leveled against the Cyprus Investment Programme is that the European Commission itself objects to it and will ultimately put an end to it. Sweeping and vague statements such as these are vastly misleading. To begin with, citizenship matters are not governed by the EU institutions, but solely by each EU member state individually. What the EU is concerned about, quite rightly, is the exercise of due diligence. One of the main messages to come out of the Cyprus Workshop is that the European Commission should work closely with the stakeholders and national policymakers in Cyprus – and all European member states – to define solid industry standards and create a strong regulatory framework in order to eliminate misuse of investment programmes, without sacrificing the substantial benefits they offer.

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Yiannos Trisokkas

Yiannos Trisokkas is the Director of Casamont Cyprus Ltd overseeing operations in Cyprus and Greece. He has also been the Managing Partner of Henley & Partners Cyprus Ltd since 2013, with Greece’s Golden Visa Program within his ambit. He serves as the Chairman of the Real Estate Committee and Member of the Management Board of Henley & Partners.