Cyprus has recently enacted new legislation establishing a formal framework for the screening of foreign direct investments, aligning its legal system with Regulation (EU) 2019/452. The new law (Law 194(I)/2025), which comes into force on 2 April 2026, introduces a mechanism allowing the State to review certain investments on grounds of security and public order.
The regime is designed to address investments that create lasting economic links and enable influence or control over businesses operating in Cyprus. In particular, it focuses on transactions involving critical sectors such as energy, transport, telecommunications, financial services, data infrastructure, and other areas considered strategically important.
Under the new framework, prior notification and approval may be required where a foreign investor acquires a significant participation (typically 25% or more) in a Cypriot undertaking operating in a strategic sector, and where the investment meets specified financial thresholds. The Ministry of Finance has been designated as the competent authority, with powers to approve, impose conditions on, or prohibit transactions falling within the scope of the law.
Importantly, the legislation targets investors from outside the European Union, the European Economic Area, and Switzerland. As such, EU nationals are generally not captured by the definition of “foreign investor” for the purposes of this regime.
From a real estate perspective, the law does not introduce general restrictions on the acquisition of property. While it refers to land and real estate connected to critical infrastructure, this is relevant only in the context of strategic investments by non-EU investors. Ordinary property purchases, including those made by EU citizens for personal or investment purposes, remain unaffected.
The introduction of this framework reflects a broader European trend towards enhanced scrutiny of foreign investments in sensitive sectors, while maintaining the principles of the internal market.
Note: This publication reflects the legal position as at the time of writing and is provided for general informational purposes only. It should not be relied upon as legal advice. Specific advice should be sought in relation to individual circumstances. For further information, please contact Andreas Hadjidemetriou, Partner, or email [email protected]
