Recent developments continue to shape the implementation of the Republic of Cyprus’ foreign direct investment screening framework under the Establishment of a Framework for the Foreign Direct Investment Screening Law of 2025 (Law 194(I)/2025).

Following a joint announcement by the Ministry of Finance of Cyprus and the Deputy Ministry of Research, Innovation and Digital Policy a dedicated electronic service has been introduced for the submission and review of Applications.

The platform that was set up for this purpose enables foreign investors and their authorised representatives in Cyprus to:

• Submit FDI screening Applications electronically, and,
• Upload supporting documentation in accordance with the Law.

This establishment of the electronic service is complemented by the issuance of a detailed official Guidance on the practical application of the FDI screening framework and the application submission process, which provide important clarifications on the scope and notification requirements of the regime and the practical steps involved in submitting an application.

Entry into force and Notification Requirement

The Cypriot FDI regime entered into force on 2 April 2026. As of 2 April 2026 any foreign direct investment falling within the scope of the legislation must be notified to the Ministry of Finance prior to completion.  

The Guidance confirms that notification is mandatory where the relevant criteria are met including (among others):

• the acquisition of a qualifying holding (generally 25% or more in shareholdings or decisive influence),
• a transaction value of €2 million or more, and
• undertaking operating in a sector of “strategic importance” as defined in the Law and the Annex to it.

The submission of a complete application does not automatically result in a full screening; after the submission of a Notification, the competent authority will determine whether the investment will undergo screening.

As the Guidance clarifies, whether a particular business falls within the scope of the Law must be assessed by reference to the actual activities carried out in Cyprus. The assessment is fact specific. As further noted in the Guidnace, the focus is on the nature and scope of the activities conducted by the target undertaking and on whether those activities are capable of giving rise to risks to the security or public order of the Republic of Cyprus.

The Guidance also helpfully clarifies that:

• Greenfield investments do not fall within the scope of the Law.
• Transactions in which both the foreign investor and the EU target are owned or controlled by the same parent company do not require mandatory notification. If ultimate control does not change, no notification will be required.

Application process – Key practical points

The newly introduced electronic platform formalises the application process, which includes:

• Completion of online fields and submission of a Notification Form in English
• Upload of detailed supporting documentation (including ownership structures, transaction documents and investor information)
• Ongoing interaction with the authority for clarifications, where required.

Practical implications for Investors

Investors planning transactions with potential relevance to Cyprus should:

• Assess at an early stage whether their investment falls within the scope of the FDI regime
• Carefully evaluate whether the mandatory notification thresholds and sectoral criteria are triggered
• Ensure timely and accurate preparation of the application and supporting documentation
• Factor in review timelines (which may extend depending on information requests and potential screening) when structuring transactions.

Future Outlook

At the EU level, the Council of the European Union on 8 June 2026, under the Cyprus Presidency, adopted a regulation revising the EU framework for screening foreign direct investments (FDI), strengthening the EU’s ability to identify, assess and address risks to security and public order linked to certain foreign investments.

The revised EU Regulation introduces a more harmonised framework with mandatory screening mechanisms in all Member States covering a common minimum scope of sensitive sectors, technologies and infrastructure (such as dual-use items and military equipment, critical raw materials, artificial intelligence, energy, transport and digital infrastructure), including foreign investments made through EU-based subsidiaries, while maintaining sole national responsibility for screening decisions.

This will likely trigger amendments to the national legislation of the EU Member States in the near future. Since Cyprus is one of the last Member States to enact an FDI regime, its FDI regime to an extent reflects the approach that is followed in the revised EU Regulation..

How we can assist

The Cyprus FDI regime introduces a substantive and procedural layer of regulatory complexity, particularly in assessing whether an investment falls within its scope and in preparing the detailed notification Form.

Our team has been closely following the developments and implementation of the newly enacted framework and has already been active in advising on the application of the new regime and preparation of notifications. Through our extensive experience advising on the merger control review of foreign investment, regulatory approvals and cross-border transactions we are well placed to:

• Assess whether a transaction triggers a notification obligation
• Advise on structuring considerations and timing implications
• Prepare and coordinate the submission of an FDI Application
• Liaise with the competent authority throughout the process.

Further information

For a further overview of the Cypriot FDI regime and its scope of application, please also refer to our previous article on this topic (https://demetriades.com/foreign-direct-investment-fdi-cyprus-screening-framework-qa-2/). For further information or assistance, please contact Polyvios Panayides (polyvios.panayides@demetriades.com) or your usual contact at Chrysses Demetriades & Co LLC.