CYPRUS Trends and Developments Contributed by: Christina Ioannidou, Zoe Christou and Niovie Constantinou, Ioannides Demetriou LLC
contributes to housing and labour demand, reinforc - ing the local tech ecosystem with specialised talent. This trend aligns with broader efforts by government agencies to promote Cyprus as a destination for tech - nology investment and skilled professionals, support - ed by digital nomad visas and simplified residence and employment permit procedures for third-country nationals. From a mergers and acquisitions perspec - tive, technology transactions in Cyprus increasingly require careful review of intellectual property frame - works, employment and incentive arrangements, data protection considerations and cross-border opera - tional structures. The education sector has attracted investor interest particularly in private international schools and ter - tiary education providers. Transaction activity in this segment is driven by demographic demand for high- quality education offerings and opportunities to scale through multi-campus platforms or specialised cur - ricula. Due diligence in this sector typically focuses on licensing and accreditation compliance, safeguarding policies, student enrolment trends and real estate or long-term lease structures. Strategic investors and operators are increasingly assessing how institu - tional frameworks, student mobility and capital com - mitments intersect in platform-building opportunities across Cyprus’s education landscape. In parallel, investment in premium media and creative businesses similarly demonstrated sustained interest in scalable, talent-driven sectors. Taken together, these developments point to a grad - ual broadening of Cyprus’s M&A landscape beyond traditional sectors, with growth increasingly linked to knowledge-intensive activities and regional service delivery. Key Regulatory Developments Impacting M&A Competition and merger control developments Competition law remained a key consideration for M&A activity in Cyprus in 2025, particularly in sec - tors characterised by high concentration or regulatory sensitivity. A number of transactions required prior approval from the Commission for the Protection of Competition, in some cases involving extended review periods and the imposition of remedies, reinforcing
the need for early competition analysis and proactive engagement with the authority as part of transaction planning. In parallel, draft legislation was published proposing a substantial overhaul of the Cyprus merger control regime, aimed at closer alignment with EU standards and enhanced enforcement powers for the Commis - sion. The draft legislation also introduces procedural modernisation, including electronic filings, clearer investigation timelines and strengthened powers to address incomplete notifications and impose reme - dies. While the proposed reforms have not yet entered into force, they signal a clear policy direction and are developments that deal makers and advisers should monitor closely when assessing future transaction risk and timelines. Foreign direct investment screening A major regulatory development shaping cross-border M&A in Cyprus is the introduction of a formal foreign direct investment (FDI) screening regime, enacted under Law 194 (I)/2025 and entering into force on 2 April 2026. The regime aligns Cyprus with the EU’s FDI screening framework under Regulation (EU) 2019/452 and establishes a mandatory process for certain non- EU investors to notify and obtain approval before completing qualifying investments. Under the new framework, a foreign investor must file an FDI notification when all three cumulative condi - tions are met: • the investor acquires at least 25% of the share capital or voting rights, or decisive influence over the target; • the value of the investment, alone or in combina - tion with related transactions within 12 months, equals or exceeds EUR2 million; and • the investment concerns an undertaking of stra - tegic importance active in particularly sensitive sectors such as energy, transport, healthcare, telecommunications, digital infrastructure, defence, financial services, education, tourism, or land and real estate of critical importance. The competent authority for FDI filings is the Ministry of Finance, assisted by an inter-ministerial advisory
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