Following two conferences on business immigration we participated in February which took place in Dubai and Mumbai, we’d like to share certain takeaways and observations.
Dubai conference was a quite lively one with many professionals from MENA region present. Mumbai held a first conference of the kind, so it was an exploratory expedition in a sense, anyway quite useful. There is a strong interest in the region for EB-5 program in US, options offered by UK and citizenship by investment programs run by Malta and Cyprus.
Interestingly, there is no direct competition between those.
Those who decided to move into US are generally already ruled out opportunities offered by EU, including UK, due to personal reasons.
Those who want to move to Britain made this decision notwithstanding the complications Brexit will bring as for them the advantages outweigh troublesome issues.
Those who want to move to EU need to choose between Malta and Cyprus, and the distinction is quite clear – if you are content with parting with about €1M in exchange for citizenship, Malta is your choice. If you want to invest more, about €2,5M, but recover your investment, hopefully with a profit, go for Cyprus.
Until recently, the only viable option to invest in Cyprus was to buy real estate directly. Today, following changes in the law late in 2016, which allowed investments into eligible alternative investment funds, Taurus Aurum Global Property Fund offers the market this new product.
We discussed with immigration agencies, lawyers and wealth managers this new option – investment into the fund instead of buying the properties directly. When they asked us why is it a better choice for their clients when it comes to citizenship by investment, we explained the advantages:
1) We are better suited to make right investment decisions – the fund is on the market for more than 10 years and we know it inside out. The client who comes to Cyprus without such local expertise is bound to make inefficient choices which will result in overpaying, lower liquidity or both;
2) No need to hurry with investment decision – when investor acquires the property eligible for Citizenship by Exception program, one needs to move fast. Until the purchase is registered at one’s name, it is impossible to file the application. The product we offer makes it necessary to invest into real estate only €500K, excluding VAT, to buy one’s prime residence; the rest can be invested into the Fund.
So, while the property is being registered, the investor will already receive a statement of one’s investment into the Fund, which would allow to file the application for citizenship as soon as prime residence changes hands. And the Fund can subsequently invest when the proper target is identified, and the time is right;
3) The Fund is independent from any property developer and other market players and so free from any conflict of interests – we take decisions based on economic rationale and best interests of the investors;
4) As a collective investment scheme, the Fund can invest into more expensive properties exceeding single investor ticket, expanding the range of opportunities;
5) As a legal entity, the Fund will pay VAT only on difference between price of purchase and sale, while for individual investor VAT at acquisition is in effect a surcharge which one will never recover;
6) When it is time to divest, investor has just one exit strategy – to sell one’s property. When it comes to redemption of participating shares, the Fund has more options to obtain liquidity and pay investor back – it can either choose the most appropriate asset from the portfolio to sell or use fresh funds from new investors or take a loan using assets in the Fund as collateral.
With all those differentiating points explained we’d seen quite a strong interest from professional community which resulted in building quite a few promising relationships. At the same time, almost everyone pointed out that market needs education not only on what Cyprus offers as citizenship program, but as a place to live and work – education, healthcare, business opportunities, cultural diversity. This was a good takeaway for us.
So, we continue our work to promote Cyprus and our proprietary investment products with all new inputs considered to the best of our abilities.
