The new law on foreign investments has been welcomed by the Cyprus Real Estate Development Association, marking a significant step for Cyprus in aligning with EU regulations.
- The new law on foreign investments has been welcomed by the Cyprus Real Estate Development Association, marking a significant step for Cyprus in aligning with EU regulations.
Foreign investments: Strengthening Investment Framework
The House of Representatives unanimously approved legislation that establishes a robust framework for the control of foreign direct investments (FDI). This move brings Cyprus in line with the EU’s FDI Screening Regulation, which has been in effect since October 2020.
Enhanced Screening for National Security
The new law introduces stricter screening processes aimed at investments that may impact national security, particularly in sensitive strategic areas. A national mechanism will now be in place to monitor these investments effectively.
Investment Threshold and Property Acquisitions
Under the new framework, any foreign investment exceeding €2 million will undergo a thorough review. Notably, property acquisitions will only be scrutinised if they are connected to crucial infrastructures, a list that the government plans to finalise in the coming months.
Guidelines and Regulatory Clarity
In the interim, the Finance Ministry will provide guidelines for investors while the government works on finalising the specifics. The law also clarifies that dual nationals will not be considered foreign investors, ensuring that any investor designated as foreign must notify the national authority prior to proceeding with their investment plans.
Authority Powers and Compliance
The national authority will be empowered to impose conditions or fines as deemed necessary, ensuring compliance with the new regulations. The association views this as a crucial step towards enhancing transparency and credibility in Cyprus’ investment landscape.
Boosting Investor Confidence
According to the Cyprus Real Estate Development Association, the introduction of clear and consistent rules will fortify market stability and boost investor confidence. They emphasised that the framework strikes a balance between safeguarding national interests while keeping Cyprus an attractive and competitive option for foreign investments.
A Vision for Sustainable Investment
The association has committed to monitoring the implementation of the law and contributing to public discussions focused on maintaining a stable and sustainable investment environment, recognising the benefits this brings to both the Cypriot economy and society.
