As of 2 April 2026, Cyprus has introduced a Foreign Direct Investment (FDI) Screening Framework under Law 194(I)/2025, requiring certain investments by non-EU investors to obtain approval from the Ministry of Finance before completion.
What is FDI and when is notification required?
FDI generally refers to investments by foreign individuals or companies establishing a lasting interest in a Cyprus business relating to a ‘sensitive sector’, allowing participation in its management or control.
Prior notification is mandatory where all three conditions are met:
- Investment value: €2 million or more, including related transactions within 12 months.
- Ownership: The investor acquires, directly or indirectly, at least 25% of the company's shares or voting rights.
- Sensitive sector: The business operates in a particularly sensitive sector, including critical infrastructure relating to energy, transport, water, healthcare, education, tourism, communications, media, data processing or storage, defence and financial services, as well as land and real estate essential for the use of such infrastructure. Other relevant areas include critical technologies such as artificial intelligence, cybersecurity and biotechnology, and essential supplies such as energy, food and raw materials.
Certain subsequent increases in ownership may also require notification. Failure to obtain the necessary approval before completion may result in penalties up to €100,000, depending on the breach, with additional daily penalties.
How can Totalserve assist?
Totalserve provides comprehensive legal support throughout the FDI screening process, including:
- Preliminary consultation: An initial assessment of whether a proposed investment falls within the FDI framework.
- Legal opinion: A detailed examination of the investment's characteristics and applicable legal requirements, providing a reasoned conclusion on whether notification is necessary.
- Notification and approval: Preparation and submission of the required screening notification to the competent authority and assistance throughout the approval process.
- Post-approval compliance: Ongoing legal support to ensure compliance with applicable requirements and any conditions imposed by the authorities.
For further information or assistance, please contact Advocate Michalis Nikolaou, or your appointed contact at Totalserve.
