The House Finance Committee has wrapped up its examination of foreign direct investments (FDI) screening bill, paving the way for its discussion in the plenary session within the next three weeks
The legislation received broad cross-party backing, reflecting a shared commitment to safeguarding Cyprus’ economic openness while addressing national security concerns.
Committee chairwoman and Democratic Party (DIKO) MP Christiana Erotokritou said the bill was submitted on 10 July, examined from early September, and completed its committee stage on Monday. She described the legislation as a “modern framework” that combines investment attraction with enhanced security oversight.
“The Cypriot economy remains outward-looking and committed to attracting foreign investments, but with rules in place to protect the public interest and the country’s security,” Erotokritou said following the session.
Who and what does the legislation target?
The proposed framework sets out that investors from outside the European Union (third-country nationals) wishing to invest in strategic sectors such as energy, defence, health, telecommunications, and real estate will be subject to screening procedures. The aim is to protect Cyprus’ public interest and national security from potential risks linked to foreign control of critical infrastructure.
Despite some initial differences during committee discussions, MPs reached a consensus across party lines.
“With this convergence of views, the bill proceeds to the plenary with the best omens, strengthening Cyprus’ profile as an attractive investment destination, but with transparency and security,” Erotokritou added.
Alignment with EU investments screening framework
The bill brings Cyprus in line with European Union requirements for member states to implement mechanisms for monitoring foreign direct investments. The EU’s investment screening framework, introduced in 2019, enables member states to assess transactions that could affect public order or security, particularly in sensitive sectors.
As an established international business centre and financial hub, Cyprus has long attracted substantial foreign investment across multiple industries. Under the new system, investments from non-EU countries will be reviewed to determine whether they pose potential risks before being approved.
Cyprus joins other EU member states in adopting a national screening mechanism, allowing authorities to share information with the European Commission and other countries when cross-border implications arise.
The new legislation is seen as a step towards balancing openness to international investment with the need to safeguard critical assets – a balance increasingly prioritised across the EU in recent years.
(The Ministry clarified that FDIs in land and real estate are covered by the legislation only when the land and property concerned are of key importance for the use of critical infrastructure, for example: in the fields of energy, defence, water supply, communications, and others – as set out in the Annex to the Bill.)
