At this time, hundreds of high net worth individuals have secured the citizenship of Cyprus under the country’s citizenship by investment program. Unfortunately their experiences have varied: some experienced a pleasant and seamless process, while others managed to entangle themselves with people they wish they hadn’t.
As such, we would like to examine here how one avoids pain and secures a reliable citizenship by investment service.
Simply put, one must select a service provider who will prepare the file for submission, help the applicant select the least cost route, advise them on the investments to be made and provide a smooth process leading to citizenship. Few can provide an A-Z service while taking dependable responsibility for each and every step. Even fewer are ready to put the advice they give in relation to property investments to the test. Most service providers will refer clients to property sellers but will steer clear of advising the clients on what to choose. Moreover, service providers willing to put the advice given to the test of independent valuations are a rare breed.
The service provider must be fully independent. He or she should not be a referral from the sellers of properties. Also, the provider needs to be a specialist in this field. Believe it or not, there have been cases where clients used an architect for the job! The results were as expected: rejection. The use of friends who know someone who knows someone and who can show you golden opportunities in property is ill advised.
A provider who does not mention that the applicant must pass a due diligence process is to be avoided. Also to be avoided is a provider who makes the due diligence process a mountain to be climbed. That person is high on formalities and low on substance.
A specialist and his or her team of associates should be able to advise applicants on the following:
In the case of property investments, the service provider should also be able to advise on the following:
The service provider should also be able to compile the client’s file and steer the application through the Ministries of Interior and Finance, ensuring the timely securing of residency and citizenship.
One can use the following indicators in trying to understand whether one is making the right choices:
The Cyprus program has a very strong property element. This means that, almost always, the service provider will be receiving a fee from the vendor. This is also the case with providers who claim that they do not receive such fees: the company may not but the person handling your case does. Whether this fee is paid or not is irrelevant. What is important is whether the property invested in is bought at its market value. Hence our strong recommendation for an independent valuation.
Many come to Cyprus expecting to find opportunities in distressed properties. Although one could perhaps find such options in the midst of the crisis in 2013, this is unrealistic today. If a property is still distressed this means, almost certainly, that there is something wrong with it. If it were good it would have sold already. What one can hope for is to buy property at pre-launch prices provided all other criteria, such as type, location and the dependability of the vendor, are satisfied. Applicants have made €400,000 to €500,000 profit over two years in this way.
Property management costs are another factor one should take into consideration. Buyers at a high-profile project in Limassol found out upon delivery of their units that the management cost was nearly equal to their property’s rental value.
As a final note, one should avoid using a friend of a friend who knows people. This is what led an aspiring applicant to buy (what he was told to be) an excellent piece of land at a very attractive price. Unfortunately, land investments do not qualify as he later found out!