Cyprus Developers Applaud New Law on Foreign Investment Oversight

The Cyprus Real Estate Development Association has expressed strong approval for the unanimous decision by the House of Representatives to pass new legislation establishing a framework for the regulation of foreign direct investments (FDI).

The law signifies Cyprus’ full alignment with the European Union’s screening regulation, aimed at enhancing oversight of foreign investments that may impact national security.

Under the new legal framework, Cyprus will introduce stricter controls on investments in “sensitive strategic areas” and create a national mechanism to monitor such activities. This move brings the country into full compliance with the EU’s FDI Screening Regulation, which has been in effect across the bloc since October 2020.

According to the legislation, any foreign investment exceeding €2 million will be subject to a review process. Property acquisitions, however, will only face scrutiny when they are connected to “vital infrastructures,” a list that the government is expected to finalise in the coming months. In the meantime, the Finance Ministry will provide interim guidelines to assist investors navigating the new system.

The law also specifies that dual nationals will not be classified as foreign investors. Those who do fall under the foreign investor designation will be required to notify the national authority before proceeding with their investments. The newly established authority will also have the power to impose conditions or financial penalties where necessary.

In its official statement, the Cyprus Real Estate Development Association described the legislation as a major advancement toward “greater transparency and credibility,” adding that it reinforces Cyprus’ standing as “a reliable and modern investment destination within the EU.” The association further emphasized that “the introduction of clear and consistent rules will strengthen market stability and investor confidence.”

The group also highlighted that the new framework “strikes the right balance between safeguarding national security and keeping Cyprus open and competitive for foreign investment.”

Concluding its statement, the association affirmed its commitment to monitoring the law’s rollout and participating in ongoing discussions. It noted that it “will continue to follow the law’s implementation and contribute to public dialogue aimed at maintaining a stable and sustainable investment environment for the benefit of the Cypriot economy and society.” 

By fLEXI tEAM