Cyprus has formally enacted a regulatory screening mechanism for foreign direct investment (FDI), introducing mandatory national security checks for non-EU capital entering critical economic sectors. The national framework was detailed in the European Commission’s sixth annual report on FDI screening published by the Directorate-General for Trade and Economic Security.
Key Legislative Requirements and Filing Mandate
Under the national legislation, non-EU investors face explicit pre-approval requirements before finalizing qualifying transactions within the Republic:
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Legislative Framework: Law 194(I)/2025 was officially published on November 14, 2025, and took effect on April 2, 2026.
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Regulatory Authority: The Ministry of Finance acts as the designated national screening body overseeing foreign transactions.
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Pre-Approval Obligation: Foreign investors must submit a formal written notification and obtain explicit prior approval before completing an investment within the scope of the law.
Protected Strategic Sectors
The Cypriot regime subjects non-EU transactions to prior review if they touch upon national security, public order, or strategic assets across four key areas:
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Infrastructure & Property: Critical physical and virtual infrastructure, alongside strategic real estate assets.
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Financial & Essential Services: Financial services, systemic credit institutions, and critical supply chains.
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Technology & Data: Critical technologies, media pluralism, and access to sensitive personal or commercial information.
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Strategic Inputs: Supply of critical inputs and dual-use technologies.
EU-Wide Cooperation and Notification Trends
Cyprus, along with Croatia and Greece, adopted national FDI screening legislation in 2025, ensuring that all EU member states now maintain active screening regimes.
The European Commission’s joint cooperation mechanism recorded its sharpest expansion since launching in 2021:
| Metric | 2024 | 2025 | Overall Growth |
| Member State FDI Notifications | 477 | 667 | +40% YoY (61% increase since 2021) |
| Active Participating EU Countries | 13 | 21 | +8 Member States |
Source: Stockwatch.com.cy