A New Cyprus Foreign Direct Investment Screening Legislative Bill Incoming
By Pantelis Christofides and Dr. Thomas Papadopoulos, CELIS Fellows and Country Reporters for the Republic of Cyprus
His Excellency the President of the Republic of Cyprus, Mr. Nikos Christodoulides, during his opening address at the Council of Ministers’ Session held on 2 July 2025,[1] made several comments, some of which concerned the new legislative bill on Foreign Direct Investment Screening (FDIS). This bill is expected to be submitted to the House of Representatives, the legislative body of the Republic of Cyprus, in the coming days. The said comments have as follows[2]:
‘Today, we have before us three very important decisions which concern institutional reforms of the State for issues, in relation to which we have made promises during the pre-election campaign.’ …
‘The third decision that we will be reaching today which is very important, relates to another institutional reform, within the ambit of the importance we afford to improving the reliability and reputation of our country on an international level. We are approving today the establishment of a National Mechanism for Screening Direct Foreign Investments in our country which will have, as its primary aim, to safeguard the national security and public order.
This constitutes an institutional change which fortifies the protection shield of our country, without closing the door to credible investments, that we all work to bring to our country.
Via this decision, Cyprus becomes a part of the European investment framework which is based again on transparency, on strategic evaluation and shielding of critical infrastructures.
The new legislative bill replaces the original one, which had been submitted by the previous Government during 2022. It had been the subject of discussion before the House of Representatives during 2024, certain objections had been raised, extensive consultation had taken place with all the interested parties, and substantive improvements had been made, which are approved today.
The decisions concerning this Mechanism will be taken on time and always within the ambit of transparency, which is necessary for reliable and qualitative investments that we want in our country.’.
Accordingly, the new Republic of Cyprus’ FDIS Bill, a copy of which has yet to be published, is expected to be submitted during the next days before the Committee on Finance and Budget of the House of Representatives for debate, thereby replacing the pre-existing FDIS Bill.
The online press website Economy Today article entitled ‘Filter’ on direct foreign investments – Green lights from the Council of Ministers[3] notes, amongst other, the following:
- The Council of Ministers approved the FDIS Bill, which sets the foundation for the establishment of a National Mechanism of Foreign Direct Investment Screening, according to the EU FDIS Regulation.
- As the Republic of Cyprus’ Minister of Finance Mr. Makis Keravnos noted, the said Decision of the Council of Ministers is directly correlated with safeguarding the national interests, whilst the competent authority for the implementation of the Mechanism will be the Ministry of Finance. The Ministry of Finance will have the powers to approve, prohibit, or reverse, investments for reasons of public order and security.
- Bill related exceptions include investments which relate to ships under construction or that constitute subject of sale, other than Floating Storage and Regasification Units.
We will be duly updating you regarding any further developments, as these unfold.
[1] As per the relevant Announcement of the Republic of Cyprus’ Presidency dated 02/07/2025 11:03 a.m., published at the Governmental website with electronic address https://www.gov.cy/proedros-proedria/anafores-tou-proedrou-tis-dimokratias-kata-tin-enarxi-tis-synedriasis-tou-ypourgikou-symvouliou-20/ (in Greek).
[2] Unofficial translation from Greek to English by the authors.
[3] See to that effect https://economytoday.sigmalive.com/oikonomia/kypros/106694_filtro-stis-ameses-xenes-ependyseis-prasino-fos-apo-ypoyrgiko, as published on 02/07/2025 (in Greek).
