CYPRUS Law and Practice Contributed by: Marios Pelides, Dominique Pelides and Konstantinos Efthymiadis, Georgiades & Pelides
9. Foreign Direct Investment/Subsidies Review 9.1 Legislation and Filing Requirements The Cypriot parliament has approved legislation implementing a foreign direct investment (FDI) regime in Cyprus. The Establishment of a Framework for the Screening of Foreign Direct Investments Law of 2025 (Law No 194 (I)/2025) was published in the Official Gazette of the Republic of Cyprus on 14 November 2025 and its effective date was set at 2 April 2026. A foreign direct investment (the law adopts the defini - tion used in Regulation 2019/452) must be notified to the Ministry of Finance where the following criteria are cumulatively met: • the FDI results in the acquisition of a “qualifying holding”; • the value of the FDI, either individually or in com - bination with other transactions between the same parties within 12 months from the date the FDI is scheduled to be implemented, is equal to or exceeds EUR2 million; and • the FDI concerns an “undertaking of strategic importance”. Qualifying Holding A “qualifying holding” is defined as the acquisition, directly or indirectly and either individually or in con - cert with other persons, of at least 25% of the share capital and/or voting rights, or equivalent ability to exercise decisive influence over the activities of an undertaking. A further increase of a qualifying holding, resulting in the foreign investor’s percentage interest in the share capital and/or voting rights increasing (i) from less than 25% to 25% or more; or (ii) from less than 50% to 50% or more, is also notifiable, regardless of the value of the FDI. Undertaking of Strategic Importance An “undertaking of strategic importance” is defined as any undertaking conducting activities in particularly sensitive sectors, which are the following:
• critical infrastructure, whether physical or virtual, including energy, transport, water, health, educa - tion, tourism, communications, media, data pro - cessing or storage, aerospace, defence, electoral or financial infrastructure, including systemically important credit institutions, as well as sensitive facilities and land and real estate crucial for the use of such infrastructure; • critical technologies and dual-use items, includ - ing artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy stor - age, quantum and nuclear technologies, as well as nanotechnologies and biotechnologies; and • the supply of critical inputs, including energy or raw materials, as well as food security; access to sensitive information, including personal data, or the ability to control such information; and the freedom and pluralism of the media. The term “undertaking” is given a wide meaning and is defined as: (i) any entity (whether or not it is a legal person, but which is not a natural person), including companies, partnerships, trusts and others; and (ii) an entity recognised or established under the laws of a jurisdiction other than Cyprus, provided it either conducts activities in Cyprus or provides goods or services in Cyprus. Role of the Ministry of Finance Upon receiving a notification, the Ministry of Finance must decide (within 20 working days of receiving a complete notification) whether it needs to examine the investment further. If the Ministry of Finance decides it does not need to examine the investment, it must notify the foreign investor within five working days from the date of its decision. If the Ministry decides to further examine the investment, it must (i) notify the foreign investor within five working days of its deci - sion; and (ii) determine, within a further 65 working days, whether the investment may be prejudicial to the safety or public order of the Republic of Cyprus. If the Ministry of Finance concludes that the invest - ment may be prejudicial, it may impose conditions on implementation of the investment or may forbid it entirely (or, to the extent the investment has already been implemented, unwind it).
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