Foreign Investment Under Review: Cyprus Prepares New Regulations

New Bill Could Affect Real Estate Transactions

The Cypriot Parliament is reviewing a bill to regulate foreign investments, which could potentially slow down property transactions. The Association of Credit Acquiring and Asset Management Companies (ACACS) has warned that vague definitions and lengthy approval timelines may undermine Cyprus’ investment appeal.

Key Provisions

The proposal aligns with EU Regulation 2019/452, introducing a formal mechanism for screening foreign investments. It includes mandatory notifications, clear approval criteria, and designates the Ministry of Finance as the competent authority responsible for oversight. The stated goal is to protect national interests and strategic infrastructure.

Industry Concerns

ACACS Director Lisa Solones sent a letter to the Parliamentary Finance Committee, highlighting ambiguous terminology such as “strategic enterprise” and “critical infrastructure.” Without precise definitions, a wide range of property transactions could fall under the law, creating uncertainty and administrative delays.

Prolonged Approval Process

Investors would be required to notify authorities at least 10 days before completing a transaction. The Ministry would then have 20 days to decide whether to initiate a review, and up to 65 days to complete it - potentially extending the process beyond 4 months.

Risk of Post-Approval Revocation

Another controversial clause allows the Ministry of Finance to revoke approval up to 14 months after a transaction has been completed, raising questions about compensation if a development project has already begun.

Proposed Adjustments

ACACS recommends reducing the review period to 2–3 months and establishing a compensation framework for affected investors. Experts emphasize that such procedures should only apply in exceptional cases involving national security concerns, not general real estate investments.