Regulation 6(2) offers non-EU nationals four ways to qualify for permanent residence in Cyprus. Category D is the route built for investors who want to hold a position in a regulated fund rather than property or a private company.
How it works
The applicant invests at least €300,000 in units of a Cyprus Investment Organisation of Collective Investments. Three fund types qualify:
› Alternative Investment Funds (AIF)
› Alternative Investment Funds with Limited Number of Persons (AIFLNP)
› Registered Alternative Investment Funds (RAIF)
The fund must be established in Cyprus and its investments must be carried out in Cyprus.
The €300,000 must be transferred to Cyprus from abroad, from a bank account of the applicant or their spouse, or from a company account where the applicant and/or spouse are the sole shareholders, provided the shareholder is included in the application. The application must be supported by a documented financial trail: banking records, transfer confirmations, and evidence of the source of funds.
What the application needs
› Title or other evidence of the purchased units
› Proof of payment, such as remittance records
› CySEC confirmation of the fund’s establishment
› The fund’s memorandum or equivalent constitutional document
Income requirement
Alongside the investment, the applicant must show a secured annual income of at least €50,000, rising by €15,000 for a spouse and €10,000 per minor child. For Category D, all or part of this income may derive from activities within Cyprus.
What it does not allow
Category D does not grant a work permit. The applicant and spouse must confirm that they do not intend to take up employment in Cyprus. They may hold shares in Cyprus companies and receive dividends and they may also hold the position of an unpaid Director.
Maintaining the status
The investment must stay in place. If the investor redeems, sells or transfers the units without immediately replacing them with another qualifying investment of equal or greater value, the permit is cancelled, together with the permits of included family members. This makes the fund’s liquidity terms directly relevant to the investor’s immigration position.
After approval, the holder must:
› Submit evidence each year that the investment is maintained
› Provide clean criminal record certificates for the holder and adult family members every three years
› Show valid health insurance where the holder is not covered by GESY
› Avoid absence from Cyprus for a continuous period of two years, after which the permit ceases to be valid
Considerations for fund managers and regulatory aspects
A fund that accepts Category D subscriptions takes on obligations under two regimes: the Alternative Investment Funds Law of 2018 (Law 124(I)/2018) and the 6(2) criteria.
The main points:
› Investor eligibility. AIFs may accept retail investors. AIFLNPs and RAIFs are limited to professional and well-informed investors.
› Regulatory evidence. AIFs and AIFLNPs are authorised by CySEC; RAIFs are registered. Managers should be ready to provide the authorisation or registry confirmation the application requires.
› Capacity. AIFLNPs are capped at 50 unitholders, which limits how many 6(2) investors they can take.
› Cyprus nexus. The investment policy must keep the fund’s investments in Cyprus for the life of the fund.
› Exit events. Redemption, the end of a fund’s term or liquidation can put the investor’s permit at risk unless the investor reinvests immediately. Offering documents should address this.
› Ongoing evidence and AML. Administrators should issue annual holding confirmations, and source of funds documentation should be consistent with the immigration file.
Who it suits
Category D fits investors who want exposure to a professionally managed, regulated portfolio rather than a direct stake in real estate or an operating company. For fund managers, it is a reason to check that a fund’s investment policy, eligibility terms and redemption provisions are compatible with 6(2) subscriptions before accepting this investor base.