The Cypriot Parliament is set to vote today on a long-delayed bill to create a screening mechanism for Foreign Direct Investment (FDI), a move that brings Cyprus into alignment with EU regulations. The vote is accompanied by last-minute amendments from the opposition party AKEL aimed specifically at curbing the impact of foreign investment on the island’s property market.
The Push for Real Estate Safeguards
After nearly three years of deliberations, the bill, which establishes a formal review process for FDI in line with EU Regulation 2019/452, faces new challenges. AKEL has introduced three key amendments to address concerns that unchecked foreign investment is distorting the local property market and housing stock.
The proposed amendments would force the screening authority to consider new factors when reviewing an investment, including:
- Whether an investment could create imbalances in the real estate market or negatively impact the availability of housing.
- Whether the target company is active in the real estate management sector.
- The degree to which the investment affects labor and environmental standards.
AKEL stated its goal is to “put the brakes on the uncontrolled purchase of land and real estate by foreign investors.” This move comes after real estate industry groups lobbied to have the property sector exempted from the bill—a request the government denied, stating that land and real estate are key sectors covered by the EU regulation.
A Bill with a Delayed History
The legislation’s journey has been lengthy. It was first rushed to Parliament in September 2022 amid a high-profile bid by the American investment fund Lone Star to acquire the Bank of Cyprus. After the fund’s interest waned, the bill was shelved by both the government and Parliament.
It was revised and reintroduced early this year, as Cyprus and Croatia are the last two remaining EU member states yet to adopt the mandatory FDI screening mechanism.
What the New Law Entails
The bill creates a national authority to screen foreign investments for risks to national security or public order. The final revised text, submitted on September 25, 2025, mandates a review for any investment exceeding a minimum value of €2 million.
Other key provisions include:
- Shipping Exemption: An exception is made for ships under construction or sale (excluding floating natural gas units) due to the sector’s special status.
- New Start Date: The law is set to take effect on April 2, 2026.
- Enforcement: The review authority will have a five-year window to retroactively examine any investment that was subject to mandatory notification but was never reported by the investor.
Source: Stockwatch.com.cy