In a significant regulatory update, Cyprus has introduced a new legal framework to tighten oversight of foreign direct investments (FDI), aiming to protect national security while harmonizing with the European Union’s stringent standards.
On Thursday, the Cypriot Parliament ratified a law that establishes a national screening mechanism focused on foreign investments in areas deemed strategically sensitive. This alignment ensures Cyprus fully complies with the EU’s FDI Screening Regulation, effective since October 2020. The regulation mandates cooperation between EU Member States and the European Commission to review investments that might impact security or public order.
The legislation requires that any foreign direct investment exceeding €2 million undergo screening by a designated national authority. Additionally, acquisitions of land and property will be scrutinized when linked to critical infrastructure projects identified by the government. The Ministry of Finance has issued provisional guidelines to aid investors in understanding these new stipulations.
One notable detail is that individuals holding dual nationality with Cyprus will not be classified as foreign investors, streamlining processes for many buyers. Those falling under the foreign investor category must notify the FDI monitoring authority prior to finalizing deals, with potential penalties for non-compliance.
While some opposition voices, notably from AKEL, proposed adjustments during parliamentary debates, these were ultimately not adopted.
The Cyprus Land and Property Developers Association applauded the new regulations, viewing them as a vital step toward enhancing transparency and reinforcing investor confidence. By blending security safeguards with economic openness, Cyprus positions itself as a resilient and modern investment destination.
Developers emphasize that clear, objective procedures will help stabilize the market, attracting sustainable investments in property sectors, whether you are exploring cheap houses and villas for sale in Cyprus or premium properties.
The Association pledged ongoing cooperation with state authorities to maintain a balanced framework that benefits Cyprus’ economy and society over the long term.
This legislation ushers in greater clarity and security in property transactions with foreign capital. For buyers seeking affordable apartments in Cyprus or those scouting commercial ventures, understanding the new screening process will be crucial.
Ultimately, Cyprus is forging a path that safeguards strategic interests without hindering the appeal of its thriving real estate market.
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