Foreigners can own property and land in Cyprus, but there is a maximum area limit of 3 donums (4,014 sq. M.). At the same time, a permit for registration issued by the Government of Cyprus is required, which (in fairness) can be obtained without any problems with the help of a lawyer.

The costs of a real estate transaction are:

• real estate transfer tax from 3.00% to 8.00% - paid by the buyer; 3% - at a cost of up to 85,500 euro, 5% - at a cost ranging from 85,500 to 171,000 euro; 8% - at a cost of over 171,000 euro,
• buyers of new real estate pay 19% VAT; 5% VAT is paid upon the acquisition of the first residence, if its area does not exceed 250 square meters,
• legal services in the amount of 0.10% - 1.00% - paid by the buyer,
• stamp duty in the amount of 0.15% - 0.20% - paid by the buyer,
• broker's commission 3,00% - 5,00% paid by the seller.

On the issue of acquiring & running a business in Cyprus. Until November 2018, shell companies were widely used in Cyprus, and local firms actively cooperated with them.

In November 2018, the Central Bank of Cyprus issued a circular in which it revised the definitions of shell companies. Now it is:

• a company that does not have a physical presence or does not conduct business in the country of registration (except for the contents of the mailing address). The physical presence of a company is understood as having a place of business (for example, own or leased premises). In addition, the absence of a company's management can also be interpreted as a lack of physical presence.

The provision by a third party of exclusively nominal services, including the duties of a company secretary, does not mean the physical presence of the company and is not equivalent to its economic activity.

Notwithstanding the foregoing, the following circumstances may indicate economic activity:

I. a company is inherited for the purpose of owning shares or shares of other equity instruments of another business entity engaged in legitimate activities with the definition of the ultimate beneficial owner (s);

Ii. a company / legal entity is created for the purpose of owning intangible or other assets, including real estate, ships, airplanes, a portfolio of investments, assets and financial instruments;

Iii. a company is created to facilitate currency trading and asset transfer, mergers, and asset management and equity trading;

Iv. any other case where there is compelling evidence that the company / organization has a legitimate business with the ultimate beneficial owner (s).

If the subject falls under the above definition of a company's “shell” or 

1. the entity is registered in a jurisdiction in which companies / organizations are not required to submit independent financial statements to the authorities,
2. the subject has tax residency in the jurisdiction included in the list of unfavorable for EU countries (in terms of taxation),

then business relationships with such a legal entity should be avoided.

In all other cases, the Cyprus institution must decide whether to maintain business relations with such companies or not, providing a justification for such a decision, which must be properly documented and registered.

The above-mentioned circular significantly changes the attitude towards the existing practice of doing business in Cyprus, especially when it comes to banks and other financial institutions.