Cyprus has entered a new era of investment governance with the adoption of its first national framework for screening foreign direct investments (FDI). Approved by the House of Representatives on 30 October 2025, the Law on the Establishment of a Framework for Screening Foreign Direct Investments of 2025 (Law 194(I)/2025) will take into effect on 2 April 2026 in line with EU Regulation 2019/452 introducing a structured process to evaluate foreign investments that may influence national security or public order.
Under the new regime, investors from outside the EU, EEA, and Switzerland will need to submit a mandatory notification and obtain the prior approval from the Ministry of Finance before completing certain investments in strategic undertakings.
A notification obligation arises only when all of the following criteria are met cumulatively:
- The foreign direct investment results in the acquisition of a “special participation,” as defined in the Law (i.e., obtaining 25% or more of the voting rights, share capital, or the ability to exercise decisive influence).
- The value of the investment equals or exceeds €2,000,000, either as a single transaction or aggregated with other transactions between the same parties within a twelve (12)-month period from the planned completion date.
- The investment concerns an enterprise of strategic significance, meaning a Cypriot enterprise (i.e. any entity, whether or not it is a legal person, that is not a natural person, including a company incorporated under the provisions of the Companies Law or any entity established in any other manner, and including a partnership, association, foundation, and trust) active in one of the following sensitive or critical sectors designated by the law:
- Energy;
- Transport;
- Water supply;
- Health;
- Education;
- Tourism;
- Communications;
- Media;
- Data processing or storage;
- Aerospace;
- Defence;
- Electoral or financial services—including systemic credit institutions;
- Sensitive facilities;
- Land and real estate that are of critical importance for the use of such infrastructure.
These criteria operate together — meaning that a transaction triggers mandatory notification only when all three requirements are simultaneously satisfied.
The obligation also extends to investments routed through EU-based structures if 25% or more of the ownership or control ultimately rests with third-country investors.
Notification is also required when a participation crosses significant thresholds—moving from below 25% to 25% or above, or from below 50% to 50% or above—regardless of deal value.
Certain investments fall outside the notification scope. The law excludes transactions involving vessels under construction or in sale/purchase, except for floating storage and regasification units (FSRUs) for natural gas, which remain subject to screening.
The Ministry of Finance will act as the competent authority for reviewing notifications. A dedicated seven-member Advisory Committee will support its assessments.
Following review, the competent authority may:
- Approve the transaction,
- Approve with conditions, or
- Prohibit or unwind an investment deemed to pose national security or public-order concerns
Although Cyprus continues to encourage high-quality foreign investment, the new framework adds an important compliance step for deals involving strategic sectors.
From 2 April 2026 onwards, investors should:
- Evaluate early whether their planned acquisition triggers a filing of a notification,
- Incorporate notification timelines into their transaction planning, and
- Submit notice to the Ministry of Finance prior to completing the investment.
Please feel free to contact our Team directly for more information or assistance you may need.