The Ministry of Finance has remined companies and investors that the new law for the establishment of a framework for the screening of Foreign Direct Investments in the Republic of Cyprus, entitled 'Establishment of a Framework for the Screening of Foreign Direct Investments Law of 2025', is coming into force on 2 April, 2026.
The law introduces, for the first time in the Republic of Cyprus, a comprehensive mechanism for screening foreign direct investments and which aims to ensure the national security and public order of the Republic, aligning Cyprus with the European regulatory framework and in particular with Regulation (EU) 2019/452.
The implementation of legislation also contributes to the formation of a stable institutional environment aimed at encouraging investment activity.
The law sets out the conditions under which notification is required for a proposed foreign direct investment, taking into account the percentage of participation of a third-country investor in an enterprise of strategic importance, in relation to a specified investment threshold, or the increase of an existing participation beyond the predetermined percentage or for transactions that may have a significant influence on enterprises operating in critical or sensitive sectors.
Under the legislative framework, a foreign investor intending to carry out a foreign direct investment falling within the scope of the Law is required to submit a prior written application (notification) to the competent authority in order to obtain the relevant approval. The investment may not be completed before a decision has been issued by the competent authority.
The law also specifies the areas of activity related to national security and public order, establishes the notification procedure and investment control schedules, as well as the factors taken into account for the assessment, the information required for the control of foreign direct investment and the executive powers of the competent authority, which is the Ministry of Finance.
In its announcement, the Ministry of Finance calls on interested investors and economic operators to inform themselves about the provisions of the law and to take the necessary steps to comply with the provisions of the legislation.
Foreign direct investments that fall within the scope of the legislation and will be carried out from 2 April, 2026 onwards must be notified to the Ministry of Finance for review prior to the completion of the investment.
For more information, interested parties can visit the official website of the Ministry of Finance.
(Source: InBusinessNews)
