Cyprus vs Bulgaria. How the two countries’ “Citizenship by Investment” programs compare?
Cyprus and Bulgaria – two countries with great seaside beaches and somewhat similar history. How do their investment citizenship programs compare though?
Undoubtedly Bulgaria and Cyprus are the leading two EU countries that provide the best conditions for obtaining citizenship by investment. Therefore we are often being confronted by our customers to explain them the benefits of the Bulgarian and the Cypriot “Citizenship by Investment” programs. Which of the two citizenship programs is easier to comply with and of course, holding passport of which country provides greater flexibility and visa-free travel possibilities? These are definitely the two most important questions to answer: the ease and cost (very important) of the naturalization process and the advantages that are being offered to the naturalized citizen after the citizenship procedure has been completed. As usual, we have evaluated both programs and have applied assessment points from 1 to 10 (1 being the worst and 10 the best). We have divided the criteria into three groups: “General criteria”, “The ease and the cost of the naturalization process” and “The advantages for the new citizen”. For the end result, we have applied a multiplication factor of one for the first group and a factor of three for the second and the third groups (as we consider them as being much more important) and have expressed them in “%” in the above “donut” charts (100% would represent the ideal citizenship by investment program).
The outcome favors Bulgaria with 84% against 71% for Cyprus, mainly due to the higher investment requirement and associated cost of the Cyprus citizenship program. Still, we consider the current “Citizenship by Investment” program in Cyprus (taking into consideration the amendment from September 2016) for being competitive with the Bulgarian program, at least to a certain degree. For another naturalization programs comparison, please read our article about “Bulgarian vs Maltese Citizenship by Investment Programs“. If you are interested in either the Bulgarian or the Cypriot Citizenship by Investment programs, we will be happy to assist you in order to arrange your application to be processed in swift and professional manner.
Below is our analysis of both programs. For any questions you might have, please don’t hesitate to contact us.
1. General criteria (climate, location, taxes, international memberships and treaties, etc.).
Bulgaria and Cyprus are both EU member states, Cyprus from 2004 and Bulgaria from 2007. Bulgaria has joined NATO in 2004 while Cyprus has decided to stay away from any military alliances. Both countries share very similar history, mainly due to the presence of the Ottoman Empire in the past centuries. Bulgaria and Cyprus are Christian Orthodox countries and although they don’t share common border (Cyprus is an island), there are many business and personal connections established between the two countries. The turmoil in recent years with the collapse of the financial system in Cyprus has led to the government being more flexible towards foreign investments, while the economic stability in Bulgaria provides the so much needed peace of mind to any prospective applicant (and investor). Taxation in Bulgaria is the lowest in the EU with flat rate of 10% being implied for both personal and business profits, while Cyprus is taxing at higher rates, however still very competitive in comparison with the other EU countries. Both countries have magnificent sea resorts with Bulgaria being able to offer spectacular ski slopes as well. Having in mind that both Bulgaria and Cyprus are fully fledged EU member states, meaning that having the nationality of either of them, provides the unrestricted right to live (work, study, etc.) in the other country (as well as all other EU countries), we award both Bulgaria and Cyprus with 8 points.
2. The ease and the cost of the naturalization process (obtaining the citizenship).
Cyprus offers the fastest naturalization program with Bulgaria being the second. By law, the Cypriot passport (in an idealized scenario) will be obtained in 3 months while the Bulgarian citizenship will be granted in 12 months. In the real world, these terms are only theoretical, with the Cypriot citizenship usually being granted in 12 to 16 months (bearing in mind that there are property purchases to be completed in Cyprus) while the Bulgarian procedure takes about 18 months (as the investment is usually only in monetary form). Still, we give a slight prevalence to Cyprus in terms of speed of the naturalization process.
As to the required investment, the Bulgarian Citizenship by Investment program requires a total investment of minimum 1 024 000 EUR (equal to 2 million BGN). This can be done in variety of financial instruments – shares on the Bulgarian Stock Exchange, government and municipality bonds, even current bank account under the “trust” management option where the applicant can also instruct the bank to buy any financial or other instruments in all markets worldwide – LSE, Euronext, NYSE, etc. Bearing in mind the financial stability in Bulgaria and the options provided by the naturalization law to invest in worldwide markets (under the “trust agreement” choice), combined with the low investment threshold of just above the 1 million EUR mark, we consider the Bulgarian investment criteria and cost for obtaining citizenship to be close to ideal.
In Cyprus, the required investment is set to be at least 2 000 000 EUR, invested in residential real estate on the island. The associated costs with the program are in general much higher than the costs associated with the Bulgarian program. Namely, the investor will have to pay 7% real estate brokerage fee and eventually 5% VAT on the transaction. This means that, not counting the attorney legal fees, the Cypriot residence procedure can attract about 240 000 EUR on fees and taxes, while in Bulgaria the corresponding charges will be significantly lower. Additional factor for consideration is that in the case of Cyprus, the investment in real estate is not as liquid as the monetary investment in the case of Bulgaria. At the same time, real estate investment can provide stability on the long term, even though it can attract much higher initial charges.
Having in mind the slightly faster processing time in Cyprus against the cheaper cost and lower investment requirement in Bulgaria, we award the Bulgarian program with 9 points while the Cypriot citizenship program receives our 6 points.
3. The advantages for the new citizen (right to reside in EU, access to education, healthcare, visa free travel, etc.).
Cyprus and Bulgaria are both members of the European Union, which means that the citizen of either country enjoys the same rights – EU wide – the right to travel freely, reside, work, the right of education, the right to buy real estate that is not available to citizens outside of the EU, access to state health facilities, EU consular assistance, etc. Within the whole area of the EU, it is of no importance whether someone is holding Bulgarian, Cypriot, French or Italian passport – all EU citizens have the same rights everywhere in the EU. The only theoretical exception is the right to vote, which is granted for the elections in the country of citizenship. For the purposes of our current comparison, this means, that the Bulgarian citizen will have the right to vote in Bulgaria while the Cypriot citizen will be voting in Cyprus.
When it comes to visa free travel outside of the EU, the EU has a directive for visa reciprocity that will ensure that all non-EU countries should in apply the same visa conditions to all EU member states. This directive is not yet fully enforced, however it is expected to be in the years to come. In total, Cyprus and Bulgaria passport holders can travel to approximately the same number of countries worldwide visa-free. The number of countries that can be visited visa-free is expected to rise even further under the said EU directive.
In conclusion, both the Cypriot and the Bulgarian passports are almost the perfect travel document for use worldwide so we give 8 points to both countries.