The Cypriot Parliament has delayed the vote on a critical bill designed to regulate foreign direct investments (FDI) in the country. The decision to push the vote back by one week came after AKEL MP Aristos Damianou requested more time to scrutinize key elements of the legislation before it proceeds to a final parliamentary session.
The Chair of the House Finance Committee, DIKO MP Christiana Erotokritou, supported the postponement but stipulated that the bill should not revert to the committee stage for further amendments.
The bill aims to establish a clear and rigorous framework for screening incoming foreign investments, particularly focusing on Cyprus’s property market—a sector that has attracted intense attention over the past three years. Alongside the bill, AKEL introduced three specific amendments addressing foreign participation in real estate.
One amendment mandates the authority assessing these investments to evaluate whether they might disrupt market equilibrium or negatively affect housing availability. This comes against a backdrop of proponents in the real estate industry advocating for exemptions on certain property categories, which the government has firmly dismissed, citing EU regulations.
Additional amendments propose in-depth checks on foreign entities involved in property management due to potential impacts on public order or national security. Moreover, there is a call to factor in the consequences of investments on labor rights and environmental protections—factors often overlooked in such legislation.
AKEL emphasizes that these measures are necessary to prevent unchecked acquisition of Cypriot land and property by international investors, a concern echoed by many local stakeholders.
First introduced in September 2022 during interest shown by the US-based Lone Star fund in acquiring the Bank of Cyprus, the bill initially gained momentum but stalled after the acquisition attempt faltered. Earlier this year, the legislation was revived in an updated form. Currently, Cyprus and Croatia remain the only EU countries without formal FDI screening mechanisms, aligning the bill with a broader European directive on investment oversight.
The law sets a threshold, requiring any foreign investment worth €2 million or more in strategic sectors or with implications for national security and public order to notify Cypriot authorities. While pre-investment notifications within a 10-day period were not adopted, the government retains the right to review any transaction retrospectively for up to five years if initially undisclosed.
Penalties and conditional approvals are part of the enforcement toolbox to ensure compliance. The bill is slated to come into effect on 2 April 2026, allowing some time for investors and businesses to prepare.
For those eyeing the Cypriot real estate market, whether exploring cheap houses and villas for sale or considering other property types, this new legislation adds an additional layer of oversight. While it aims to protect the local market and national interests, it also signals that due diligence and transparency will be more critical than ever before for foreign buyers.
As Cyprus continues to attract global investors, balancing openness with strategic protections is a challenging but necessary path. Keeping up to date with such regulatory changes can give property seekers and investors a clear advantage in navigating Cyprus’s dynamic market.
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