Filenews 28 December 2024 - by Vassos Vasileiou
The legislation concerning "strategic development" projects has opened a window for the arrival in Cyprus of foreigners from third countries and employment mainly in the fields of Industry, Tourism, Energy, Research, Development and Technology.
The relevant legislation, the provisions of which are now coming into force, through the accelerated licensing process (within 12 months) of Strategic Development Projects, also mentions the following:
For the cases of developments that were classified as "strategic development" projects... residence permits for third-country nationals may be issued... on the relevant proposal of the Minister (of the Interior).
A relevant reference to the legislation "includes, inter alia, details of the number of staff from third countries for whom residence permits may be issued, per applicant, as well as the categories of positions".
Although theoretically strategic development projects will focus on the sectors of Health, Social Care, Education, Culture, Sports, Environment, Rural Development, Industry, Tourism, Energy, Research, Development and Technology, the door is also left open for activity in the construction sector. In fact, although development in the real estate sector is seemingly excluded, it is cemented with a provision that theoretically excludes it.
Specifically, the legislation provides that:
'' Excluded from their classification as strategic development projects are developments defined in Regulations issued in accordance with the provisions of Article 25 and concerning, inter alia, the following:
(a) Pure real estate development;
(b) Pure financial activities;
(c) Ethically controversial developments or prohibited by applicable law;
(d) Developments that increase the environmental impact and to the greatest extent that impact is not mitigated or compensated''.
In order for the development to be characterized as a strategic development project, the applicant must prove that it concerns productive economic activity, and that its implementation contributes substantially to the sustainable development of the economy, through the satisfaction of the following objective criteria:
(a) Capital investment, with a minimum investment amount specified in Regulations or
(b) creation of new permanent jobs, as defined in Regulations issued or
(c) capital investment and creation of new permanent jobs, as specified in Regulations adopted pursuant to the provisions of Article 25; or
(d) Anchor Company investment.
The investor pays an application management fee of at least €10,000. The amount increases gradually, depending on the size of the total budget and the type of development. It is paid in two instalments, the first of which upon application.
Prospective investors shall also submit the following documents/data:
(a) A business plan, which includes, inter alia, a description of the type and nature of development, with special reference to aspects relating to its specificities, such as, inter alia, the promotion of innovation, the development of new technologies, social welfare and environmental protection;
(b) A preliminary report regarding the ownership and urban characteristics of the immovable property concerned by the proposed development, including a Masterplan, as well as regarding the proposed uses of the development and the activities and services provided, the number and description of permanent and seasonal jobs created, as well as an analysis of the cost and timetable for the implementation of the development.
The project manager and his role
For the implementation of the development, a project manager is appointed, who will essentially cut and sew in order to promote the promoted project. Among other things, it will be in contact with the relevant departments in order to forward the application and in fact the services involved are obliged to handle the various aspects of the application within specified timeframes. Otherwise, their position vis-à-vis development will be considered positive.
According to the legislation, the project manager transmits the application (with all required supporting documents) to the head of each competent administrative authority involved in the permitting process. He is obliged to appoint a person from the department over which he is responsible for issuing the necessary authorisations and/or opinions and/or for the consultation provided for in the relevant legislation in force from time to time and shall ensure that the staff of that department take the necessary action without further delay; in accordance with its prescribed powers.
The legislation also provides that the administrative authorities must provide the project manager with all necessary information, written or oral, about the stage reached in the relevant procedures, any deficiencies in the file and how to complete them, as well as the reasons for the delay or failure to provide the requested permits or approvals.
Any failure of any administrative authority to comply with its obligations shall be notified by the project manager to both the Minister and the competent Minister for further action, unless the Minister of Interior gives consent to an extension of the specified deadline for the completion of the examination of the application.
"Strategic development" projects will also be able to be implemented by people who have been involved in offences concerning their professional conduct and have admitted but have not been convicted of these offences. It is recalled that in the case of the Pafos sewerage scandal, some businessmen admitted that they oiled mayors and municipal councillors but were not convicted by a court because they had been classified as prosecution witnesses.
In general, according to the legislation, an application for the implementation of "strategic developments" cannot be submitted by a legal or natural person who has been convicted of an offense concerning his professional conduct by a decision that has the force of res judicata. Individuals/legal entities that have outstanding issues with their tax returns in their countries of origin or with the relevant legislation of the Republic in force from time to time are also excluded.
Whatever the Minister says
Based on the legislation, the Minister of the Interior recommends to the Council of Ministers, with a fully reasoned proposal, the approval or rejection of an application for the designation of development as a strategic development project, taking into account a report by the Head of the Strategic Development Sector (branch of Urban Planning).
At the same time, the Minister approves, for each development separately, the project manager and is informed about the work carried out by the administrative authorities involved in the licensing process of the strategic development project, in order to ensure compliance with the provisions of this Law.
Furthermore, it recommends to the Council of Ministers the granting of any permit required in the context of the licensing process for a strategic development project or the justified rejection of an application for such a permit.
