The House Finance Committee completed its review of foreign direct investment screening legislation on Monday with broad cross-party consensus, with the bill expected to proceed to the plenary session in three weeks.
Committee chairwoman Christiana Erotokritou, a DIKO MP, stated the bill was submitted on 10 July, examined since early September, and concluded the committee process on Monday. She said that the new legislative framework provides Cyprus with a modern tool combining investment attraction with security.
“The Cypriot economy remains outward-looking and pursues the attraction of foreign investments, but with rules to protect the public interest and the country’s security,” Erotokritou stated following the session.
Legislation targets critical infrastructure investments from third countries
The framework stipulates that investors from third countries interested in investing in critical infrastructure including energy, defence, health, telecommunications, as well as land and real estate, will be subject to screening aimed at protecting public interest and national security.
Despite initial disagreements during committee proceedings, discussions concluded with consensus amongst parliamentary parties. “With this convergence of views, the bill proceeds to the plenary with the best omens, strengthening Cyprus’s profile as an attractive investment destination, but with rules of transparency and security,” Erotokritou stated.
Bill balances investment attraction with national security concerns
The legislation is Cyprus’s alignment with European Union requirements for member states to establish foreign direct investment screening mechanisms. The EU framework enables countries to review investments that may affect security or public order, particularly in strategic sectors.
Cyprus has positioned itself as an international business centre and financial services hub, attracting substantial foreign investment across multiple sectors.
The screening process will apply to investments from non-EU countries, examining proposed transactions in designated critical sectors. Authorities will assess whether investments pose risks to public interest, national security or public order before approving transactions.
Cyprus joins other EU member states in implementing national screening mechanisms following the bloc’s establishment of a coordination framework in 2019. The EU framework enables member states to share information about investments under review and allows the European Commission to issue opinions on transactions affecting multiple countries or EU-wide interests.
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