FOREIGN DIRECT INVESTMENT - WHEN WILL THE NEW LAW BE IMPLEMENTED IN CYPRUS? - Filenews 27/3
The Ministry of Finance announces that on 2 April 2026, the Law on the Establishment of a Framework for the Control of Foreign Direct Investments in the Republic of Cyprus, entitled "The Establishment of a Framework for the Control of Foreign Direct Investments Law of 2025" [Law 194(I)/2025], enters into force.
The Law introduces for the first time in the Republic of Cyprus an integrated mechanism for the control of foreign direct investments, which aims to ensure the national security and public order of the Republic, aligning Cyprus with the European regulatory framework and in particular with Regulation (EU) 2019/452. The implementation of the legislation also contributes to the formation of a stable institutional environment aimed at encouraging investment activity.
The Law sets out the conditions under which notification is required for an intended foreign direct investment, taking into account the percentage of participation of a third-country investor in a strategic undertaking, in relation to a defined investment threshold, or the increase of an existing participation beyond the predetermined percentage or for transactions that are likely to have a material impact on undertakings operating in critical or sensitive sectors.
The Law specifies the areas of activity related to national security and public order, defines the notification procedure and the timing of investment screening, as well as the factors to be taken into account for the assessment, the information required for the screening of foreign direct investment and the executive powers of the competent authority, which is the Ministry of Finance.
The Ministry of Finance invites interested investors and economic operators to be informed about the provisions of the law and to take the necessary actions to comply with the provisions of the legislation. Foreign direct investments that fall within the scope of the legislation and will take place from April 2, 2026 onwards, must be notified to the Ministry of Finance for review before the completion of the investment.
