New rules non EU buyer buying via company creation

Changes to non-EU citizens acquiring property through companies

Although EU citizens are permitted to buy as much and as many properties as they wish in Cyprus, third country nationals, i.e. citizens of non-EU countries, are limited in what they may purchase (see buying property in Cyprus and visiting post Brexit.)

The restrictions on non-EU citizens buying property in Cyprus date back to the Acquisition of Immovable Property (Aliens) Law, Chapter 109, which has existed in various forms for decades. However, key changes occurred at different times:

Pre-EU Membership (Before 2004): Strict controls were in place for all foreign buyers, including EU citizens.

Post-EU Accession (2004): Cyprus lifted restrictions for EU citizens, but non-EU citizens remained subject to limitations, including the need for government approval and limits on land size and use.

Despite these restrictions Brits and other non-EU citizens wishing to buy more property than permitted under the law may do so by forming a limited company, which may purchase any size and any number of properties.

Non-EU citizens companies purchasing property issues

However, non-EU citizens buying property through companies has resulted in rising property prices, which impact local buyers, particularly young couples looking for homes.

The issue was debated in Parliament yesterday as the House Interior Committee examined proposed legislation by Famagusta DISY MP Nikos Georgiou, aimed at modernising property acquisition rules for foreign buyers.

The proposed amendments would introduce new due diligence requirements, obliging lawyers, accountants, and estate agents to verify the backgrounds of foreign buyers, in line with anti-money laundering regulations.

Senior officials from the Interior Ministry, Land Registry, Ministry of Finance, Law Office, and the Registrar of Companies attended the committee meeting to discuss concerns about the law’s effectiveness.

Recent cases highlight gaps in the current system. The two sons of Simon Mistriel Aykut, who is wanted for property usurpation in occupied Cyprus, had acquired assets worth €1.2 million in the Republic, including several properties in Larnaca and Nicosia, through a company before authorities froze the assets.

While EU countries generally permit foreign property ownership, many impose restrictions.

Foe example, Finland is considering stricter regulations for national security reasons, Greece requires special permits for purchases in border areas, and the UK maintains safeguards relating to taxation and anti-money laundering measures

Source Cyprus Property News and  thanks to Nigel Howarth