Exodus of Russian oligarchs to Cyprus accelerates
The demand among Russians for property in European offshore havens with the consequent acquisition of citizenship is growing, finanz.ru reports.
Between January and August 2018, the number of applications by Russian citizens to purchase residential and commercial property in order to acquire Maltese or Cypriot citizenship rose by 40%, according to the consulting company Knight Frank.
Cyprus’s passport program requires applicants to invest at least €2 million in the economy, of which €500,000 must be used to buy property.
By the end of July, the number of such transactions had grown by 25% year on year: Knight Frank estimates that 5,400 facilities were purchased.
The Maltese program grants citizenship acquisition rights to persons investing € 650,000 in the country’s National Fund and € 150,000 in approved financial instruments for a period of at least five years. Applicants must also purchase property to the value of at least € 350,000 or rent for a minimum of €16,000 per year.
1,600 out of a possible 1,800 applications have been submitted in the Maltese passport program.
The mass sale of European passports to ethnic Russians and citizens of former Soviet states is causing concern in the EU, said EU Justice Commissioner Věra Jourová at the start of August. She emphasized that the practice of issuing “golden” visas and passports in exchange for investments needs to be curtailed. New rules restricting the inflow into the EU of migrants with dubious capital origins will be drafted and published in September, she promised. “The EU must not become a haven for corruption and dirty money… several member states should do more to avoid providing citizenship,” she added.
According to Der Spiegel, the European Commission has its sighs set on Greece, Cyprus and Malta, which actively trade in passports, whose primary buyers are Russians and citizens of former Soviet republics.
Maltese government data indicates that every second participant in the “Citizenship for investment” program, which has been active since 2013, is presumably an ethnic Russian. These include Yandex founder and co-owner Arkady Volozh and his family, owner of the 01 Group investment company Boris Mints, and ICT Holding co-owner Alexander Nesis. All three feature on the Forbes list of wealthiest Russians with $1.1, $1.3 and $2.4 billion respectively.
Among the new Maltese citizens are also namesakes of Russia’s largest vodka producer, Beluga Group co-owner Alexander Mechetin, major Russian land owner Igor Khudokormov and Alexei Marey – CEO and vice chairman of Alfa-Bank, who resigned in November 2017 in connection with his family moving to London.
The list also includes the presumed family of Vladimir Voronin, owner of the development company FSK Leader, the namesake of a Kaspersky Lab senior manager, the CEO of the Polyus gold mining company Pavel Grachev, one of the 25 highest paid managers according to Forbes; Dmitry Doykhen and Nikolay Fartushnyak – founders of the Sportsmaster store chain; Igor Levitin, brother of former Russian transport minister and current presidential aide Igor, and many others.