Cyprus has formally adopted a national mechanism for the screening of foreign direct investments (FDI), aligning its regulatory framework with European Union standards on security, public order, and transparency.
Approved by the Council of Ministers, the new legislation designates the Ministry of Finance as the competent authority responsible for approving, prohibiting, or reversing qualifying investments in sectors deemed of strategic importance to the Republic of Cyprus. These sectors include, among others, energy, defence, health, financial services, transport, and telecommunications.
The mechanism applies to foreign investors from outside the EU, EEA or Switzerland, and targets transactions that result in a lasting participation and substantial influence over Cypriot entities active in key sectors. Investors are required to notify the authorities when their stake exceeds 25% of a company’s share capital, or when an existing shareholding crosses the 25% or 50% thresholds.
The legislative framework also introduces a dedicated inter-ministerial advisory committee composed of representatives from multiple government ministries, ensuring a coordinated assessment process. The updated legislation reflects best practices across the EU and incorporates feedback from prior consultations with stakeholders.
By introducing a clear and centralised process, Cyprus strengthens the protection of its critical infrastructure, enhances investor confidence, and improves compliance with EU obligations. This development is seen as a step forward in reinforcing Cyprus' reputation as a credible, secure, and well-regulated destination for foreign investment.
