Cyprus to relax 'citizenship for investment' program

NICOSIA - Cypriot President Nicos Anastasiades announced measures on Sunday night to partly compensate Russian businessmen who lost large amounts of money because of a haircut imposed by the Eurogroup on bank deposits.

In prepared remarks to a meeting of Russian businessmen in the southern port city of Limassol, Anastasiades said those who suffered a loss of at least 3 million euros ($3.9 million) on their deposits have a right to immediately apply for citizenship.

The haircut was imposed in return for a 10-billion-euro bailout for Cyprus.

Anastasiades said that the "citizenship for investment" program, which is similar to that of other countries, will be revised to make eligible for the Cypriot citizenship those who invest 3 million euros, down from the previous 10 million euros.

He added the Council of Ministers, who will hold a two-day meeting starting on Monday to consider development programs and incentives, will examine further measures to attract foreign investment.

Anastasiades said new tax incentives for existing and new companies will be announced after the cabinet concludes its review.

Bank measures imposed by the Eurogroup aimed at downsizing the Cypriot banking system have nearly wrecked the eastern Mediterranean island's economic model based on a large banking system and offering services to thousands of offshore companies.

Anastasiades said that despite the measures imposed by its European partners, Cyprus still offers attractive opportunities for investment and for setting up business.

He vehemently denied charges that Cyprus has been a place for money laundering and a tax heaven and challenged its European partners to extend an investigation into its anti-money laundering procedures to their own countries.

Anastasiades also accused financial services companies in other European countries of predation upon the Cypriot financial sector.

"What saddens me, and I don't say angers me, deeply is that since the Eurogroup agreement (on a bailout) was reached, some businesses of EU partners in the financial services industry have been preying upon our financial services sector in order to bring about a relocation of funds into their economies," said Anastasiades.

He said it was hypocritical on behalf of businesses of other European countries to employ such methods.

"It is an irony and an absurd paradox that the governments of those businesses claimed those funds were deposited and invested in Cyprus through illicit means," Anastasiades said.

He added he was confident that an ongoing probe into anti-money laundering procedures will prove that Cyprus is not a place for money laundering and called for an extension of the probe in all EU countries.