The Cypriot Parliament has postponed for one week the vote on the bill establishing a national framework for screening foreign direct investments, following a request from AKEL MP Aristos Damianou.
The MP argued that several aspects of the proposed legislation needed further examination before being put to a final vote in the Plenary.
The Chair of the House Finance Committee, DIKO MP Christiana Erotokritou, agreed to the postponement on the condition that the bill not be returned to the committee for further discussion.
Foreign investments in the property market
The bill was forwarded to the Plenary accompanied by three AKEL amendments aimed at placing additional checks on foreign involvement in the property sector – Â point of concern throughout nearly three years of committee deliberations.
The first amendment requires the competent authority to consider whether a foreign investment could create imbalances in the real estate market or affect housing availability. The proposal comes after stakeholders in the property sector requested exemptions for specific property categories, a position the government rejected on the grounds that EU rules do not allow such exclusions.
The second amendment calls for examining whether the target company operates in property management and whether such activity could have implications for public order or national security. A third amendment seeks to ensure that the impact of the investment on labour and environmental standards is taken into account.
In a statement, AKEL urged parties to back the amendments, arguing they are necessary to prevent “uncontrolled acquisition of land and property by foreign investors.”
The bills’ three years in the making
The bill was originally tabled in September 2022, amid interest from the US-based investment fund Lone Star in acquiring the Bank of Cyprus. After that bid was withdrawn, the legislation lost momentum, re-emerging in revised form earlier this year. Cyprus and Croatia are the last EU member states yet to establish a formal FDI screening mechanism.
Scope and implementation
The bill establishes a system requiring foreign investors to notify authorities if their investment falls within strategic sectors or could affect national security or public order. A minimum investment threshold of €2 million is included, alongside provisions for penalties, conditions, and post-investment review.
Although a requirement for pre-investment notification within a 10-day window was not adopted, the authorities will retain the power to review investments for up to five years if they were subject to mandatory notification but were not disclosed.
The law is scheduled to come into effect on 2 April 2026.
What has propelled this bill? Since the 2023 Gaza War started, and significant number of Israelis – and also a lesser number of Lebanese and Syrians – began arriving so as to escape from the war’s multiple threats, the pressure on purchases and rentals of residential property in Cyprus has rocketed.
One consequence has been a sudden sharp rise in rents. For example, in both 2024 and 2025, I rented the same 1-bed apt in Oroklini for 4 weeks late season at Euros 850. A very good deal but not extreme. That apt is now advertised on booking sites at Euros 2,000 (i.e. 135% rise) for a similar period in Sep-Oct 2026. This sharp rise is across the board in the Republic controlled south and also in the TC north.
Such owner opportunism, encouraged by Air B&B and other booking sites, is likely to bring a short-term windfall but a long-term loss. It’s already putting off Brits from booking for 2026 and this is likely to continue for as long as these exceptionally high rental prices remain.