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Cyprus’ Golden Visa Furor Undercuts Real Estate Pitch to Foreign Buyers

August 31, 2020

An investigative report by the news site Al Jazeera claiming Cyprus sold Golden Visa residency permits and European Union passports to criminals and the corrupt is cutting into the real estate market's hopes of getting foreign buyers.

Construction will also be hurt, George Mouskides,  Chairman of the Cyprus Property Owners Association, told The Financial Mirror as the government tries to refute the claims.

The report came at the worst possible time, he said, with the economy in a big downturn because of the COVID-19 pandemic, a lockdown and tourists shying away from the island and interest in purchasing properties way down.

“The program was hit hard after the lockdown, and the government estimates that the number of naturalizations will shrink to 200 per year from about 800 in the previous two year,” he said of the real estate and construction sectors.

He said the Golden Visa scheme, which had been criticized by the European Union as being open to money laundering, had brought in critical revenues that

“We are talking about the scheme that pulled the Cyprus economy out of recession in 2013, breathing new life into the construction industry, and by default into the country’s economy,” he said.

“The scheme had a trickle-down effect on the majority of economic sectors,” argued Mouskides.

“What we in the real estate industry are hoping for, is that politicians will not turn the issue of unflattering reports on Cyprus’ CIS to kill the program that has given so much to the country,” without giving his sense of what should be done to prevent visas from being sold to criminals.

“Parties will need to pull together if they want to save the scheme, allowing it to give more to the economy at a time of yet another crisis,” he said.

Antonis Loizou, CEO of Antonis Loizou and Associates told the Financial Mirror that discrediting the scheme will have a series of consequences as names were leaked to the media after the government was keeping them secret.

“While we should acknowledge that a large number of these investors are in it solely for the passport, a number of them, however, eventually stay in Cyprus making further investments,” he said, although critics said Cyprus is selling its passports to some people who couldn't find the country on a map.

“We know of cases of Chinese investors who had originally invested in Cyprus to obtain a passport but are now building hotels in Larnaca and Paralimni,” said Loizou. Chinese, after Russians, are the biggest buyers of Golden Visas sold to rich foreigners.

The real estate agent argued that Al Jazeera’s accusations will bring about further damage as Cyprus will lose possible investors, leaving projects built or in the planning as unviable now.

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