In a bid to rebuild the dwindling economy in Cyprus shortly after the financial crisis four years ago, the government launched a passport-by-investment program to temp wealthy foreigners with citizenship in exchange for an investment of no less than €2 million into the Cyprus economy.
How has it been going?
Over the last four years, the scheme is being widely reported to have generated over €4bn euros (US $4.5Bn) for the country, having been particularly popular with Russians, which account for reportedly half of the investors that signed up for the program.
Limassol has even been coined “Little Russia” as Russians and their families take full advantage of their investments under the scheme. With many Cyprus residents noting that shop signs have become abundantly written in Cyrillic with no Greek translations in certain districts of Limassol, while yachts with Russian flags slowly outnumber the others in the harbours.
Over 2,000 issued EU passports have generated revenue which reportedly accounts for approximately 26% of the islands annual GDP, with figures showing the Cyprus scheme has been extensively more popular than a similar concept in Greece by a huge margin. This extra injection of revenue has led experts to acclaim the scheme has saved the Cyprus property market dip which, if continued could have led to collapse during these tentative economic stretches.
The Greek scheme mirrors a visa-for-investment structure, which has been ongoing since 2014 and offers investors a 5-year residency permit for spending €250,000 or more on property or land. It said the Greek Government has issued 1,583 residence permits so far to foreign investors in the Greek property market, with many of the visas issued in order of popularity to the following nationalities:
- China (665 applications).
- Russia (349 applications).
- Egypt (78 applications).
- Lebanon (74 applications).
- Ukraine (68 applications).
Passport and visa schemes such as these have undoubtedly helped wavering economies such as Cyprus and Greece; however have not been without their criticisms. Many are concerned about the high level of publicity which may allow wealthy yet lawfully undesirable inhabitants. Such passport- and visa-for-investment schemes have attracted some unwelcome publicity in recent years.
Especially within the EU, experts have criticised how the schemes have been conveniently launched and expanded exponentially in the wake of a financial crisis in the Eurozone, so it appears that the answer comes in the form of exchanging liquidity for security. Others also disapprove, stating that such programmes give the rich an unfair advantage over ordinary and local people.