Marios Tannousis: The National FDI Control Mechanism is a very important and positive step

Cyprus is taking another step closer to substantially strengthening its image abroad with the establishment of a National Mechanism for the Control of Foreign Direct Investments, as, following the Cabinet's approval of the relevant bill, per the EU regulation for the protection of national security and public order, all that remains is the passage of the relevant bill by Parliament.

In this way, Cyprus will safeguard its national security and critical infrastructure, harmonise with the European Union and align with the relevant regulation, which promotes cooperation and transparency between member states and, at the same time, improve the country's position as a responsible and mature investment destination and strengthen the confidence of foreign investors.

Marios Tannousis: a very important and positive step for Cyprus

"We welcome the government's decision, which we consider a very important and positive step for Cyprus," Invest Cyprus CEO Marios Tannousis told InBusinessNews , noting that the organisation participated in the consultation on the bill and expressed its agreement on the country's harmonisation with the European regulation.

Asked whether the establishment of a National Mechanism for the Control of Foreign Direct Investments can be associated with an increase in foreign investments in Cyprus, Tannousis indicated that "it shows foreign investors that Cyprus is taking care of issues of foreign investment control, which enter the European framework, as requested by Europe itself."

"This in itself creates a framework of trust. The benefit is that Cyprus is harmonised and shielded alongside the entire EU and the other member states," the CEO of Invest Cyprus pointed out.

• What does the bill provide for?

The new proposed legislation gives the Finance Ministry the authority to approve, prohibit or reverse foreign investments that affect critical sectors of the economy, such as energy, tourism, defence, health, communications and financial services.

In accordance with the bill, a foreign investor is defined as any natural or legal person from a country of the European Union, the European Economic Area or Switzerland, and a foreign direct investment is considered any investment by a foreign investor aimed at stable participation and substantial influence in the management of a business of strategic importance in the Republic of Cyprus.

It is noted that there is a notification obligation for foreign investors and this is required from investors whose investment exceeds 25% or if there is a variation from 25% to 50% or more.

Exceptions are provided for foreign direct investments concerning ships, under construction or ships that are the subject of purchase and sale, except for floating natural gas storage and regasification units.

(Source: InBusinessNews)