For international investors and legal deal teams, understanding these regulations is no longer optional—it is a critical component of transaction planning. The new law introduces a suspensory obligation, meaning qualifying investments cannot be lawfully completed without prior clearance from the Ministry of Finance. Failure to comply can result in administrative fines or the reversal of the transaction.

Below is a quick-reference summary of the jurisdictional thresholds, followed by a comprehensive Q&A to help you navigate the new compliance landscape.

At a Glance: Cyprus FDI Screening Requirements

Frequently Asked Questions: Law 194(I)/2025

1. What is the applicable legal framework?

The screening of foreign direct investments in Cyprus is governed by the Establishment of a Framework for the Screening of Foreign Direct Investments Law of 2025 (Law 194(I)/2025). This law was published in the Official Gazette of the Republic on 14 November 2025 and entered into force on 2 April 2026. The Cypriot regime is based on Regulation (EU) 2019/452, which establishes the general European framework for the screening of foreign direct investments on grounds of security or public order.

2. What is the competent authority for the screening of foreign direct investments?

The competent authority for the purposes of Law 194(I)/2025 is the Ministry of Finance. The Ministry of Finance examines whether an investment falls within the scope of the law and conducts a substantive assessment in light of public security and public order considerations. Before reaching a decision, it consults the Advisory Committee, which assists in formulating the final administrative determination.

3. What is considered a “foreign direct investment”?

Α foreign direct investment is any investment by a foreign investor aimed at establishing or maintaining lasting and direct links between the investor and the undertaking to which the relevant capital is provided, for the purpose of carrying out an economic activity in the Republic of Cyprus. This concept covers, in particular, investments that enable effective participation in the management or control of the target undertaking.

4. Which investments fall within the scope of Law 194(I)/2025?

The law applies to foreign direct investments carried out in the Republic of Cyprus which cumulatively satisfy certain core criteria. In particular, the investment must be made by a foreign investor, result in the acquisition or increase of a participation exceeding the statutory thresholds, have a minimum value of two million euros, and concern an undertaking operating in a strategic or sensitive sector. The law does not cover every form of investment activity, but only those that can materially affect public security or public order.

5. Who is considered a “foreign investor” for the purposes of the law?

A foreign investor is any natural person who is not a national of a Member State of the European Union, the European Economic Area or Switzerland, as well as any legal person or undertaking established outside those territories. In addition, an entity may be regarded as a foreign investor where, although established within the EU, EEA or Switzerland, it is directly or indirectly controlled by persons from a third country. Accordingly, what is decisive is not merely the formal seat of the investing entity, but also the actual control structure and the ultimate beneficial owner.

6. Do investments from EU, EEA or Swiss investors fall within the scope of the law?

As a general rule, no. Investors originating from Member States of the European Union, the European Economic Area, or Switzerland are not regarded as foreign investors for the purposes of Law 194(I)/2025 and, accordingly, their investments are not subject to notification and approval requirements. However, where the relevant entity is directly or indirectly controlled by persons from a third country, the investment may still be examined under the law, provided that the remaining jurisdictional criteria are also met.

7. When exactly is notification to the competent authority required?

Notification is required when the proposed investment, cumulatively, satisfies the material criteria laid down by law. More specifically, the obligation is triggered when a foreign investor makes an investment that results in the acquisition or increase of a qualifying holding with an aggregate value of at least €2.000.000 and concerns an undertaking operating in a strategic or sensitive sector. Notification is preventive in nature and constitutes a necessary precondition for the lawful completion of the investment.

However, foreign direct investments concerning ships under construction or ships being bought or sold, with the exception of floating storage and regasification units (FSRUs), are exempt from the notification requirement.

8. What happens if a foreign investor, while meeting the criteria, fails to send a request for approval of foreign direct investment to the competent authority?

If a person involved in a foreign direct investment fails to submit the required notification, the foreign direct investment is automatically deemed in breach of the provisions of Law 194(I)/2025, and the competent authority may, where it deems circumstances warrant, take any measures it considers appropriate to prohibit, terminate, or reverse the investment.

9. Can the competent authority examine foreign direct investments ex officio?

Yes. The competent authority retains the right to examine any foreign direct investment, regardless of whether it falls within the mandatory notification framework, in cases where there are reasonable grounds to believe that the foreign direct investment may affect the security or public order of the Republic of Cyprus.

10. What are the main jurisdictional criteria for an investment to be subject to screening?

For an investment to fall within the screening regime under Law 194(I)/2025, four principal criteria must be met cumulatively. First, the investment must be made by a foreign investor. Secondly, it must result in the acquisition of a qualifying holding or in an increase in participation to levels that the law considers material for screening purposes. Thirdly, the aggregate value of the investment must be at least €2.000.000, whether through a single transaction or through multiple transactions between the same parties within a twelve-month period. Fourthly, the target undertaking must operate in a strategic or sensitive sector. If any one of these criteria is not satisfied, the investment does not fall within the mandatory screening regime.

11. What is the significance of the participation threshold for the purposes of the law?

The level of participation is critical because the law links the notification requirement to the acquisition of a qualifying holding and, by extension, to the ability to exercise material influence or control over the target undertaking. The obligation to notify is triggered when a foreign investor acquires, directly or indirectly, at least 25% of the share capital or voting rights. The same obligation also arises when the participation increases from below 25% to 25% or more, or from below 50% to 50% or more. These thresholds are considered sufficient to give rise to a presumption of decisive influence and trigger the notification requirement regardless of the value of the foreign direct investment.

12. How is the value of the investment calculated?

The value of the investment must be at least €2.000.000. This threshold is assessed not only in relation to a single transaction, but also cumulatively across multiple transactions between the same parties within a twelve-month period from the date the foreign direct investment is intended to be carried out. This approach is intended to prevent circumvention of the law by artificially fragmenting a broader investment into smaller steps to avoid review by the competent authority.

13. Which sectors are considered strategic or sensitive?

Strategic or sensitive sectors are those whose operations are directly linked to public security, public order, and the overall resilience of the economy and the State. These include, among others, critical infrastructure such as energy, transport, communications, water supply, health, education, tourism, financial services, digital infrastructure and the media. They also include undertakings that process or control sensitive information, particularly personal data, as well as activities relating to strategic technologies, including artificial intelligence, robotics, cybersecurity, semiconductors, biotechnology, nanotechnology, quantum technologies, and nuclear technologies. In addition, the regime covers activities related to the supply of critical inputs, such as energy, raw materials, and food.

14. What is the relevance of the target undertaking’s sector of activity?

The target undertaking’s area of activity is a decisive element of the analysis because the law focuses not only on who is investing and at what level, but also on where the investment is directed. Even if the investor is foreign and acquires a significant participation, screening is triggered only if the target undertaking operates in a strategic or sensitive sector. The assessment is substantive and based on the potential impact of the investment on the Republic of Cyprus’s critical interests.

15. Is it sufficient for only one criterion to be met for the law to apply?

No. The law applies only when all principal jurisdictional criteria are cumulatively satisfied. Accordingly, an investment will not fall within the screening regime if, for example, it exceeds the monetary threshold but does not concern a strategic sector, or if it concerns a strategic sector but the investor is not regarded as foreign under the law. This cumulative approach ensures that the screening mechanism is applied in a targeted and proportionate manner.

16. Who is required to submit the application for approval?

The obligation to submit a written application lies with the foreign investor. This means that the investor itself must, prior to carrying out the investment, initiate the relevant administrative procedure before the competent authority and provide all required information and documentation.

17. Is approval mandatory before completion of the transaction?

Yes. The Cypriot regime is suspensory, meaning that the investment may not lawfully proceed without express approval from the competent authority. The parties may proceed to sign the relevant agreements; however, such agreements remain subject to a condition precedent. Consequently, their full legal effects arise only once the required approval has been obtained.

18. Can the transaction be signed before approval is granted?

Yes. As a matter of principle, the signing of the transaction is not prohibited before obtaining administrative approval, so the relevant agreements may be entered into. However, such acts remain subject to the condition precedent of approval, which means that completion and the full activation of the parties’ rights and obligations cannot occur until the investment is formally cleared.

19. What is the screening procedure?

The procedure begins with the foreign investor submitting a fully documented written application to the Ministry of Finance before carrying out the investment. The application must include information on the transaction, the parties, the ownership structure, the ultimate beneficial owner, the value of the investment, the source of financing, and the nature of the business activities involved. Once the file has been submitted, the competent authority examines whether the investment falls within the scope of the law and conducts a substantive assessment of its potential effects. Prior to issuing a decision, it consults the Advisory Committee and subsequently grants approval or a rejection.

20. What key information must the application include?

The application must provide an adequate picture of the proposed investment and the parties involved. In particular, it should include a description of the investment, details of the parties, their ownership structure, information on the ultimate investor or beneficial owner, the value and financing of the transaction, the products and services of the parties, the nature of their activities in the Republic of Cyprus, the countries in which they operate, their turnover and number of employees, as well as information on any sanctions or criminal proceedings. The competent authority retains the discretion to request any additional information deemed necessary for its assessment.

21. Can the competent authority request additional information or clarifications?

Yes. The competent authority has the power to request supplementary information or clarifications where it considers this necessary for the proper assessment of the investment. This is of practical importance because the completeness and quality of the initial submission directly affect both the speed of the review process and the risk of delays.

22. What are the applicable timelines for the review of the investment?

The competent authority is required to reach a decision within twenty working days of the submission of a complete application. This period starts only once the file is considered complete. Any deficiencies or requests for additional information may therefore extend the review period.

23. What is the practical timeline of the procedure?

In practical terms, the duration of the procedure depends significantly on the preparation and quality of the filing. If the application is submitted with full and clear supporting material, the competent authority must decide within 20 working days. If, however, additional information is required or there are uncertainties as to whether the investment falls within the scope of the law, the overall timeline may be extended. For that reason, the early identification of filing risks and careful preparation of the file are particularly important from a transaction-planning perspective.

24. Is there a filing fee?

The law does not expressly impose any administrative fee for submitting an approval application. Accordingly, based on the current legislative text, there is no mandatory payment; future administrative or regulatory measures may introduce such a fee.

25. How is the confidentiality of submitted information dealt with?

Ιnformation provided by a foreign investor to the competent authority shall be used solely for the purpose for which it was requested and shall be governed by the provisions of the Protection of Know-How and Undisclosed Business Information (Trade Secrets) from Unlawful Acquisition, Use and Disclosure Law.

A foreign investor and/or any person related to the foreign direct investment may, when submitting information to the competent authority, designate any statements or material that they consider to contain confidential information as confidential documents.

The competent authority, the Advisory Committee, and their members, by virtue of their position or in the exercise of their official duties, shall be bound by a duty of confidentiality and shall not disclose and/or publish trade secrets and confidential information, unless such disclosure is deemed necessary either for establishing any infringement of this Law or for the implementation of its provisions.

26. What does the competent authority assess in substance when examining an investment?

The competent authority examines whether the investment is likely to affect public security or public order in the Republic of Cyprus. In this context, it considers both the nature of the target undertaking’s activities and the characteristics of the investor, including its origin, ownership structure, ultimate beneficial ownership, and any links to third countries. The assessment is not purely formalistic but rather an overall appraisal of whether the proposed investment may pose a risk to strategic or sensitive sectors.

27. What happens if the required approval is not sought?

Carrying out an investment that falls within the scope of the law without prior approval from the competent authority constitutes a violation of Law 194(I)/2025. In such cases, the competent authority may impose administrative sanctions and/or fines, depending on the nature and seriousness of the infringement. Furthermore, the relevant agreements and legal acts are deemed subject to a condition precedent, meaning they do not produce full legal effect until the required approval has been granted.

28. Is there any possibility of pre-consultation with the competent authority?

The Cypriot law does not expressly provide for a formal pre-consultation or advance ruling procedure as to whether a given investment falls within the scope of the screening regime. Unlike in certain other jurisdictions, such as Spain, there is no formal pre-clearance consultation mechanism. That said, informal engagement with the competent authorities cannot be excluded in practice where genuine uncertainty exists as to the jurisdictional treatment of a transaction.

29. What is the main practical implication for investors and deal teams?

The main practical implication is that any transaction involving a third-country element, a significant level of participation, a value of at least €2,000,000 and exposure to a strategic or sensitive sector should be assessed at an early stage from a filing-risk perspective. The need for prior approval may directly affect the structure of the transaction, the signing and closing timetable, the conditions precedent in the transaction documents and the overall execution of the deal. For that reason, the relevant assessment should be incorporated into both legal and transactional planning from the outset.

30. Can the competent authority take into account certain factors to determine whether a foreign investment may affect the security or public order of the Republic of Cyprus?

Yes. The competent authority may consider whether the foreign investor is directly or indirectly controlled by the government of a third country, whether the investor has been involved in activities affecting the security or public order of an EU Member State, and whether there is a serious risk that the foreign investor may engage in illegal or criminal activities. Additionally, the authority takes into account whether the foreign direct investment could adversely affect projects or programs of Union interest.

31. What key development did Law 194(I)/2025 introduce?

The Ministry of Finance, as the competent authority, may review any foreign direct investment, regardless of whether it falls within the scope of mandatory notification, where there are valid reasons to consider that the foreign direct investment could affect the security or public order of the Republic of Cyprus. Specifically, when the foreign direct investment is not subject to mandatory notification, the Ministry of Finance may exercise this power within fifteen months from the date the investment is made; or if it is subject to mandatory notification and has not been notified, the Ministry of Finance may exercise this power within five years from the date the investment is made.