Cyprus

Pursuant to Article 281(1)(a) of the Criminal Code, Cap. 154 and based on a recent case law from the Cyprus Court of Appeal it has been confirmed that tenants who remain in possession of immovable property after lawful termination of a lease, may be held criminally liable for unlawful occupation. This development strengthens the legal position of property owners and clarifies the interaction between civil and criminal remedies in tenancy disputes. While a tenant initially enters into possession lawfully under a lease, that consent ceases once the lease is validly terminated and a clear demand for vacant possession is made. The offence carries penalties including imprisonment, a fine or both where applicable. Historically, disputes over possession after the end of a lease were treated predominantly as civil matters governed by contract and property law. However, this approach has now expanded in scope following a recent appellate decision. In accordance with the landlords, the ruling provides an additional enforcement mechanism alongside civil proceedings for recovery of possession and damages through criminal complaints against the tenants who remain in possession after termination of the lease. The landlords should avoid changing locks or forcibly removing tenants prior court instructions, as such actions may expose the landlord liable and are not sanctioned by this new criminal route. It is essential that termination notices are drafted clearly, served properly, and specify a deadline for delivery of possession. This strengthens the evidence of withdrawal of consent when initiating any criminal complaint. It should be noted that criminal action for unlawful possession does not substitute for a civil court order for possession. Landlords should proceed if they wish with civil claims for possession and damages, even if a criminal complaint is filed simultaneously. This judicial development marks a significant shift in the enforcement of property rights in Cyprus and how post-termination occupation is treated under Cyprus law. Both landlords and tenants should seek timely legal advice to ensure their rights are protected and to avoid unintended criminal exposure. For more information please contact our senior advocate Cathy Georgiou. ... Article by Kathy Georgiou – Senior Advocate – E&G Economides LLC [email protected] Cathy holds a Bachelor of Laws from the University of Nicosia in 2012 and she was admitted to the Cyprus Bar Association in 2013. During her career, she excelled in a wide spectrum of areas. At the same time, Cathy was trained and then specialized as a litigation and dispute resolution lawyer where she acquired significant experience at areas such as Family, Tort, Contracts, Immigration, Civil and Criminal Law. Cathy also possesses excellent contract drafting skills and is up-to-date with relevant legislation. In her current position, Cathy is focusing on projects and transactions relating to real estate law, the drafting of wills and probates, immigration/employment issues and other relevant matters related to litigation and dispute resolution.

Cyprus has enacted its first dedicated legislation governing the review of foreign direct investments that may affect matters of security or public order. The Law on the Establishment of a Framework for Screening Foreign Direct Investments of 2025 (Law 194(I)/2025) will apply as from 2 April 2026. The new law gives effect to Regulation (EU) 2019/452, introducing a formal review process for certain investments by non-EU investors into Cyprus businesses. What is a Foreign Direct Investment The Law adopts a wide understanding of foreign direct investment. It covers any form of investment by a foreign investor that is intended to create or preserve a stable and direct relationship with a Cyprus undertaking, where the investor is able to participate effectively in the management or control of that undertaking. Foreign investors include both individuals and legal entities established outside the European Union, the European Economic Area and Switzerland. When Prior Notification Is Required The competent authority must be notified before an investment is completed if the following conditions apply cumulatively: the value of the investment reaches EUR 2 million or more, either as a standalone transaction or together with related transactions concluded between the same parties within a twelve month period;   the target undertaking operates in a sector considered sensitive under the Law; and   the investment leads to the acquisition of 25% or more of the share capital or voting rights, whether directly or indirectly. Role of the Ministry of Finance Responsibility for the assessment of FDIs rests with the Ministry of Finance, which acts as the competent authority. Where notification is mandatory, as per the above conditions, the transaction cannot be completed unless approval is granted. The Ministry also has the power to examine investments that fall outside the mandatory thresholds if they are considered capable of affecting security or public order. In such cases, the Ministry may initiate a review within 15 months of completion. Where a notifiable investment has been completed without prior notification, the review window extends to five years. Review Procedure and Timeframes Once a notification is submitted, the Ministry has 20 business days to decide whether a full review will take place. If no review is initiated, the investor is informed shortly thereafter. If the investment proceeds to screening, the Ministry must reach a final decision within 65 business days, determining whether the investment raises concerns for the Republic of Cyprus. Sanctions for Non-Compliance Failure to submit notification may result in administrative fines, alongside other corrective measures available under the Law. In serious cases, the Ministry may seek court order to prevent or pause an unlawful transaction. Any decision taken by the Ministry may be challenged before the Administrative Court. Foreign investments in Cyprus will now go through a statutory approval process based on investor origin, transaction value and sectoral activity. This introduces an additional regulatory step that did not previously exist and which may affect both the timing and execution of certain transactions. In practice, investors and sellers will need to assess at an early stage whether a proposed transaction falls within the scope of the Law, as completion without the required clearance may expose the parties to sanctions and post-completion intervention by the authorities. … Author details: Michalis Nikolaou – Advocate [email protected] Michalis holds a Bachelor of Laws (LL.B) from the University of Sunderland in the UK, and a Master’s degree (LL.M) in Commercial and Company Law from Erasmus University in the Netherlands. He successfully passed the Cyprus Bar exams in 2022 and upon the successful completion of his legal training in a reputable law firm in Limassol, where he was involved in various litigation and corporate matters, he was admitted to the Cyprus Bar Association in 2022. In his current position in our firm, Michalis focuses on corporate and commercial matters as well as drafting and reviewing corporate agreements of various sorts and legal transactions. In addition, Michalis provides assistance on cases and matters relating to real-estate transactions.

Cost barriers for trademark applications often hinder small businesses from securing intellectual property rights. Recognising this challenge, the European Union Intellectual Property Office (EUIPO) has introduced an ambitious €60 million fund designed to assist Small and Medium-sized Enterprises (SMEs) with their IP protection efforts. This new SME Fund 2026 aims to significantly lower the financial hurdles associated with registering trademarks and obtaining other IP protections. Building on the success of previous initiatives, the program provides extensive support for a wide range of IP activities. It not only covers trademarks but also extends to patents, designs, and plant variety rights. The primary goal of the fund is to promote equal access to intellectual property protections throughout the European Union, empowering smaller businesses to defend their innovations and brands. Consequently, SMEs can now overcome previous financial barriers that limited their ability to secure essential IP rights in competitive markets. Fund aims to reduce costs for trademarks, patents, and designs The 2026 SME Fund offers financial assistance through a voucher system that significantly reduces the costs associated with various IP protections. For trademark applications and designs, businesses can receive a 75% reimbursement on fees at national, regional, and EU levels. This includes application fees, additional class fees, examination, registration, and publication costs. Moreover, the fund covers patent applications with equally generous support. SMEs can claim 75% reimbursement on national patent applications and state-of-the-art search reports, up to €1,000. For European patents, the fund offers 75% reimbursement on filing and search fees with the European Patent Office, plus 50% on legal costs for drafting and filing applications by professional representatives, with a combined maximum of €2,500. Additionally, the fund extends to plant variety protection, offering a 75% reimbursement on online application and examination fees before the Community Plant Variety Office, up to €1,500. For businesses seeking strategic IP guidance, the fund provides up to 90% reimbursement for IP Scan services . The voucher structure allows businesses flexibility in choosing the protections they need. Who is eligible under the SME FUND: Definition of SMEs under EU law The European Union defines Small and Medium-sized Enterprises based on three main criteria: staff headcount, annual turnover, and annual balance sheet total. According to EU recommendation 2003/361, businesses must fall within these thresholds: For classification purposes, a medium-sized enterprise employs fewer than 250 staff members, with an annual turnover not exceeding €50 million and an annual balance sheet total of up to €43 million. A small enterprise is defined as having fewer than 50 employees, with annual turnover and balance sheet totals each not exceeding €10 million, while a micro enterprise employs fewer than 10 staff members and reports annual turnover and balance sheet totals of up to €2 million. These ceilings apply to individual firms only. However, businesses that are part of larger groups may need to include staff headcount, turnover, and balance sheet data from the entire group when determining eligibility. Consequently, enterprises cannot qualify if 25% or more of their capital or voting rights are directly or indirectly controlled by one or more public bodies. Application Period Opens: 2 February 2026 Closes: 5 December 2026 Protecting your intellectual property is an investment in your business’s future. Our Head of IP & Data Protection, Xenia Kasapi, is available to assist with your application and advise on how to maximise your IP protection. About Xenia Kasapi Xenia holds a Bachelor of Laws from The University of Sheffield and a Master of Commercial Law from the University of Bristol. She is a member of the Cyprus Bar Association and the Chartered Institute of Arbitrators, with expertise in intellectual property, data protection, and corporate law. She is also a PhD candidate at the University of Cyprus, researching intellectual property law.

Cross-border investment has long been one of the most powerful engines of economic integration, shaping markets, supply chains and corporate strategies across jurisdictions. In an increasingly interconnected world, capital no longer flows merely to seek returns, but to secure access to technology, resources, infrastructure, and strategic capabilities. Against this backdrop, foreign direct investments (“FDIs”) have become a central pillar of economic growth, innovation, and international market access. In Cyprus, sustained inflows of foreign capital have played a key role in the development of sectors such as energy, shipping, technology, tourism, and financial services. At the same time, the protection of national security, public order, and critical infrastructure has moved to the forefront of public policy, reflecting broader geopolitical and economic realities. It is within this evolving landscape that Cyprus has introduced its first FDI screening framework through Law 194(I)/2025 (the “Cyprus FDI Law”). The EU FDI screening in context At European Union (“EU”) level, Regulation (EU) 2019/452, adopted on 19 March 2019 and effective as of 11 October 2020 (the “Regulation”), established a framework for screening of FDIs that seeks to reconcile continued openness to foreign capital with the need to safeguard security and public order within the union. Rather than creating a centralised EU approval regime, the Regulation operates as a coordination and information-sharing mechanism that sits alongside national screening systems. It requires member states to notify the European Commission and, where relevant, other member states, of potentially sensitive investments, enabling them to submit comments and allowing the Commission to issue non-binding opinions in cases that may affect projects or programs of the Union’s interest to assist each member state with taking an informed approach. In all instances, final screening decisions remain with the competent national authorities. Since 2020, the framework has driven a gradual shift away from a fragmented landscape towards greater alignment of national regimes, increased use of screening tools, and a broader substantive focus on areas such as critical infrastructure, sensitive technologies, energy, data and supply chain resilience. This trajectory has continued with the European Commission’s 2024 proposal to revise the Regulation, as well as the subsequent provisional political agreement reached in 2025, which indicate an intention to further strengthen coordination, procedural alignment and the scope of screening across the Union. Against this evolving European regulatory landscape, Cyprus’s adoption of a national FDI screening mechanism represents a natural and strategically necessary development, reflecting its growing regional role and increasing investment interest from third countries. The Cyprus FDI Law, must therefore be understood not as an isolated regulatory initiative, but as part of a wider EU-level shift towards coordinated investment governance, carefully calibrated to balance necessary security and public order safeguards with the country’s objective of remaining an attractive European destination for FDI, taking into account Cyprus’s economic profile, market structure, strategic positioning and geopolitical relevance. The Cyprus FDI Law: Purpose and scope The Cyprus FDI Law, which takes effect on 02 April 2026, introduces a formal national screening regime for FDIs in Cyprus. Its purpose is not to restrict foreign capital, but to introduce targeted oversight where foreign participation may raise concerns relating to national security or public order It applies only in defined circumstances and is focused on investments that combine foreign control, economic significance, and strategic relevance. Definitions Foreign Direct Investment - adopts the definition of the Regulation: “an investment of any kind by a foreign investor aiming to establish or to maintain lasting and direct links between the foreign investor and the entrepreneur to whom or the undertaking to which the capital is made available in order to carry on an economic activity in a Member State, including investments which enable effective participation in the management or control of a company carrying out an economic activity”. Foreign Investor: “(a) a natural person who is not a national of a Member State of the European Union (EU), a Member State of the European Economic Area (EEA), or Switzerland, and who intends to make or has made a foreign direct investment; or (b) an enterprise of a third country, which intends to make or has made a foreign direct investment”. Third Country: “Any country outside the Member States of the European Union (EU), the Member States of the European Economic Area (EEA), and Switzerland”. Competent Authority: “The Ministry of Finance of Cyprus with the assistance of an advisory committee”. Strategically important enterprise: “An enterprise that carries out activities falling within particularly sensitive sectors as these are defined in the Annex of the Cyprus FDI Law”. Enterprise:  “(a) any entity, whether or not it is a legal person, that is not a natural person, and includes a company incorporated under the provisions of the Companies Law or any entity established in any other manner, and includes a partnership, association, foundation, and trust; (b) an entity that has been recognized or established under the law of a country or territory outside the Republic of Cyprus and     (i) carries out activities in the Republic of Cyprus; or    (ii) supplies goods or services in the Republic of Cyprus”. The blueprint of the Cyprus FDI Law Under the Cyprus FDI Law, Foreign Investors are required to notify and obtain prior approval from the Competent Authority before completing a covered investment. Notification is mandatory and subject to a standstill obligation, meaning that the transaction may not be completed until approval is granted, and related agreements are treated as being subject to a condition precedent of obtaining such approval, where all the following conditions are met: Special participation and control: The investment results in the acquisition of a special participation which arises where a Foreign Investor acquires 25% (twenty-five per cent) or more of the shares or voting rights of an enterprise, or otherwise obtains the ability to exercise decisive influence over its management or decisions, whether through formal legal rights or de facto control; Value threshold: The value of the investment reaches or exceeds EUR 2,000,000 (two million euros) either in a single instance or cumulatively over a twelve-month period; and Enterprise of strategic importance: The investment concerns an enterprise of strategic importance, namely an enterprise operating in particularly sensitive sectors linked to critical physical or digital infrastructure, including energy, transport, telecommunications, digital and data infrastructure, financial services infrastructure, health, education, tourism, and land or real estate of critical importance, where foreign control may affect Cyprus’s national security or public order. As a Cyprus specific carve out, transactions involving vessels are generally excluded from the screening regime, reflecting the importance of the shipping sector. This exemption does not extend to floating storage and regasification units, which remain subject to notification due to their relevance to energy security. The Cyprus FDI Law also captures follow-on investments. If a Foreign Investor initially acquires a minority stake and later increases its participation so that it reaches or exceeds 25% (twenty-five per cent) or 50% (fifty per cent), a notification is required at that stage regardless of the value of the additional investment. This prevents transactions from avoiding review through staged acquisitions or incremental increases in shareholding. The same approach applies to indirect investments made through Cyprus based entities where ultimate control rests with a Foreign Investor. Notification, review and decision-making process Notification is submitted by way of a written application, which describes the intended FDI in Cyprus and provides information listed in section 4 of the Cyprus FDI Law, including inter alia, details relating to the investor, the target enterprise, and the ownership and control structure, as well as any additional information requested by the Competent Authority. Upon receipt of a complete notification, the Competent Authority determines within 20 (twenty) working days whether the investment falls within the scope of review. An advisory committee supports the screening process by providing reasoned written input to the Competent Authority, both at the stage of determining whether an investment warrants review and during the substantive assessment phase. Where no risks to national security or public order are identified, the investment may proceed. Where concerns arise, the Competent Authority may clear the investment subject to conditions or prohibit it. It is further noted that the decisions of the Competent Authority are subject to appeal before the Administrative Court pursuant to Article 146 of the Constitution of the Republic of Cyprus. Failure to notify a covered investment may have serious consequences. Non-notified transactions remain legally vulnerable and may be subject to review by the Competent Authority for a period of up to 5 (five) years following the completion of the transaction, with the Competent Authority empowered to order a reversal where appropriate. In addition, the Competent Authority may also review investments outside the mandatory notification framework where there are reasonable grounds to consider a potential impact on security or public order, within 15 (fifteen) months of completion. Closing a transaction without approval constitutes a breach, exposing the Foreign Investor and/or any person exercising direct or indirect control over the investment, to administrative fines ranging from EUR 5,000 (five thousand euros) to EUR 100,000 (one hundred thousand euros) depending on the nature and seriousness of non-compliance. Where measures are imposed and not complied with, additional sanctions may apply, including daily administrative fines of up to EUR 8,000 (eight thousand euros) per day, and restrictions on the exercise of rights attaching to the investment, including voting, management, and control rights.  Impact on Foreign Investors  For Foreign Investors, Cyprus’s FDI screening framework introduces defined jurisdictional thresholds and procedural requirements that have direct implications for transaction planning and execution, particularly in the context of mergers and acquisitions (“M&A”). Transactions that result in the acquisition of qualifying shareholdings, voting rights, or other forms of control, whether through share deals, asset transfers, reorganisations, joint ventures, or equity investments, may now be subject to mandatory prior notification and clearance. This significantly reduces uncertainty as to the regulatory scope but introduces an additional pre-closing condition that must be factored into transaction timetables and documentation. The Cyprus FDI Law requires early and rigorous due diligence to assess whether a transaction falls within the scope, including an analysis of direct and indirect ownership, ultimate beneficial ownership, governance rights, and any anticipated increases in participation. For M&A practitioners, this necessitates careful structuring and sequencing of transactions, the inclusion of appropriate conditions, long stop dates, and regulatory cooperation clauses, and alignment with parallel regulatory approvals where applicable. The Cyprus FDI regime must also be considered alongside other domestic regulatory frameworks. Depending on the sector and transaction profile, clearance or engagement with the Cyprus Competition Commission (CCC) and sectoral regulators such as the Cyprus Securities and Exchange Commission (CySEC), the Central Bank of Cyprus (CBC), or the Cyprus Broadcasting Authority (CBA) may be required. As a result, transactions may be subject to multiple, overlapping regulatory processes that must be coordinated to avoid execution risk. In addition, the EU cooperation mechanism enables other member states and the EU itself, to provide comments or opinions on notified transactions, introducing a further dimension of regulatory scrutiny, including for transactions that might previously have fallen outside any national screening process. Practitioners should therefore anticipate enhanced information requirements, longer review timelines in complex cases, and the potential imposition of conditions, or in exceptional cases, prohibition or post-closing remedies. In this environment, proactive regulatory assessment and integrated transaction planning are essential to ensure deal certainty and mitigate execution risk. In parallel with this expanded regulatory scrutiny, the regulatory architecture of the Cyprus FDI regime is underpinned by a structured confidentiality and data governance framework. Information submitted by Foreign Investors is used exclusively for screening purposes and processed in accordance with applicable Cyprus and EU data protection law, including GDPR standards. Foreign Investors may designate information as confidential or as business sensitive, subject to appropriate justification and the provision of a non confidential version where required. The Competent Authority and advisory bodies are bound by strict statutory confidentiality obligations, codified by the Cyprus FDI Law with disclosure permitted only where necessary for the operation and enforcement of the FDI regime, including EU level cooperation and information exchange mechanisms. National security v investment climate in Cyprus From Cyprus’s national perspective, the new FDI screening framework is designed to bolster national security and public order, in line with the EU’s coordinated approach to overseeing sensitive foreign investments. The Cyprus FDI Law empowers the Competent Authority to vet and potentially block or unwind investments that could affect critical infrastructure, supply security, or other strategic interests. This marks a policy shift for Cyprus, which historically prided itself on an open, investor-friendly regime. By adopting an FDI screening mechanism, Cyprus aligns with a growing number of EU member states that have introduced controls in respect of strategically sensitive investments, signalling that it will rigorously protect key sectors, but without closing the door to genuine investments. In fact, adopting the screening law is also a strategic move to reinforce Cyprus’s position as a credible investment hub within the EU. It aligns the island with EU norms and can enhance investor confidence that the playing field is fair and secure. The European Commission’s latest annual FDI Report highlights that member states have managed to increase vigilance without deterring investment with the vast majority of transactions in 2024 being approved unconditionally. This suggests that Cyprus’s new oversight mechanism, much like those in other EU countries, seeks to strike an appropriate balance between safeguarding security and public order while maintaining an open investment climate. Closing reflections The enactment of the Cyprus FDI Law marks a significant turning point in the country’s investment landscape, aligning with EU-level initiatives and embedding national security and public order considerations into the assessment of foreign participation in strategically important sectors. This development does not represent a retreat from foreign investment. Rather, it introduces a structured and proportionate framework that seeks to protect critical interests without undermining the economic dynamism that bona fide foreign capital brings. While investments in sensitive sectors will now be subject to closer scrutiny, the framework encourages greater discipline, foresight, and awareness of strategic implications on the part of all participants. For investors and advisers alike, the practical emphasis is on preparation rather than restraint. Early screening, careful transaction structuring, and informed engagement with the regulatory process will be essential to managing execution risk and preserving deal certainty as the regime takes effect. Ultimately, by combining openness with targeted oversight, Cyprus reinforces its position as a mature, credible, and secure investment jurisdiction within the EU, remaining open to sustainable foreign investment while ensuring that its strategic interests are appropriately safeguarded. Co-authors Theodora Alexandrou Maria Vyronos Alexandra De Gouveia Key takeaways New FDI screening regime: Cyprus introduces its first formal FDI screening framework under Law 194(I)/2025, effective 02 April 2026, aligning Cyprus with EU-wide practices on investment security. Targeted, not restrictive: The regime focuses on foreign investments that combine control, value, and strategic relevance, aiming to protect national security and public order without deterring bona fide Mandatory prior approval: Foreign Investors acquiring 25% or more (or decisive influence) in Strategically Important Enterprises, with an investment value of EUR 2 million or more, must notify and obtain clearance before closing. Sectoral coverage: Screening frameworks apply to investments in areas considered strategically important or sensitive to national security and public order, including critical infrastructure, essential services, and assets of strategic significance to the economy and the state. Data protection and confidentiality: Information submitted by Foreign Investors is subject to statutory confidentiality and specified-use requirements, although sensitive material must be expressly identified as confidential at submission to benefit from such protections. Execution risk for non-compliance: Failure to notify can result in fines, post-closing review for up to five years, or even unwinding of transactions. Greater planning required: Investors and advisers must factor FDI clearance into due diligence, transaction structuring, and timelines, alongside competition and sectoral regulatory approvals.