Cyprus is considering a law that could hit foreign investors.

The Parliament of Cyprus is considering a draft law aimed at creating a system of state control and verification of foreign direct investment (FDI) as part of the implementation of the pan-European Regulation on national security (EU Regulation 2019/452).

The bill provides for a mandatory procedure for notifying government agencies and obtaining permits for certain categories of investments.

• The investor will be required to notify the Ministry of Finance at least 10 days before the transaction.
• The Ministry of Finance decides within 20 days whether the transaction is subject to verification, and within 65 days conducts a full audit if it sees potential risks.

The law will apply to investments in enterprises and facilities that are of strategic importance. However, as critics of the bill point out, there is no exact list of such facilities.

One of the critics of the initiative is the Association of Business (ACACS). According to this organization, the law in its current form, due to vague formulations and lengthy procedures, can scare away foreign investors, create bureaucratic barriers and harm the economy, especially the real estate market.

Source: Cyprus Property News