A raft of new political and economic measures has been unveiled by Cypriot President Nicos Anastasiades, targeted towards Russia and Russian businesses.
The President announced the new measures at the 2013 Global Russia Business Meeting, sponsored by TMF Group, and they are expected to be approved at a cabinet meeting in the near future. Many savers have been impacted by a bailout deal with the European Union, which has resulted in a one-off haircut being imposed on deposits in Cyprus’ largest lender, the Bank of Cyprus, and the winding down of the island's second largest bank, Cyprus Popular Bank.
Mr Anastasiades said the proposals would “mitigate to some extent the damage” Russian investors had endured. He said foreign investors who held deposits prior to 15 March and who lost at least €3 million would be eligible to apply for Cypriot citizenship. The existing “citizenship by investment” programme would also be re-worked, reducing the amount of investment required to be eligible from €10 million to €3 million.
The President said that he was confident Russian businesses would not leave the country, despite the banking turmoil and losses they may have suffered. To help appease investors, the government will also be dropping the requirements for citizenship applicants to keep €15 million in Cypriot banks for five years, saying they would be allowed immediate access to their money.
“Cyprus is neither a money-laundering hub nor a tax haven,” he said, adding: “What saddens me deeply - and I refrain from using the word angers - is that since the Eurogroup agreement was reached, some EU partners’ businesses and companies involved in the financial services industry have been preying upon our financial services sector, in order to encourage a re-allocation of funds into their economies.
“Ironically, their governments claim that these funds were deposited and invested in Cyprus through money–laundering activities. This is obviously an absurd paradox,” Mr Anastasiades remarked.
TMF Group
We have an office in Nicosia, Cyprus, where our dedicated professionals can help with any concerns you may have about the recent events. We combine our extensive global resources with our unrivalled knowledge of local regulations, cultures and languages to help you achieve your business goals.