Foreign ownership restrictions / limitation of foreign investments and equity in corporations in Cyprus

1) Are there any restrictions on foreign ownership in companies?

Cyprus promotes openness to foreign investment, allowing 100% foreign ownership with very few exceptions - mainly in banking, media, real estate (for non-EU citizens), telecoms, and defense - where specific licensing or clearance requirements may apply.

2) Is government approval required for foreign investment in local companies?

In Cyprus, only certain strategic or regulated sectors require government or regulatory approval - particularly for non-EU investors. These include banking, media, real estate (for non-EU citizens), and telecoms, where prior approval or licensing may be required, often through the Council of Ministers or the relevant authority.

3) Which sectors are subject to special rules or restrictions for foreign investors?

Most sectors in Cyprus are open to foreign ownership. However, finance, media, real estate (for non-EU investors), telecoms, defense, and energy are subject to special rules, licenses, or prior government approval.

4) Can foreign persons own 100% of a limited liability company or joint-stock company?

Yes, foreign persons can own 100% of a Cyprus Ltd or joint-stock company, with no general restrictions on ownership - only activity-specific licensing applies in regulated sectors.

5) Are beneficial ownership rules applicable to foreign participants?

Beneficial ownership rules in Cyprus do apply to foreign participants. These rules are part of Cyprus's compliance with EU anti-money laundering (AML) directives and are enforced uniformly, regardless of nationality.

6) Are there any quotas or thresholds on foreign ownership in strategic companies?

Only in the areas of banking, media, real estate (as a non-EU citizen), telecoms, or defense, specific licensing rules and clearance requirements may apply.

7) Is disclosure of foreign shareholders/participants required when registering a company?

Yes, Cyprus requires full disclosure of foreign shareholders when registering a company, including identification of the ultimate beneficial owner, regardless of nationality or residency. However, the UBO Register is not openly accessible to the public, only to authorities and certain professionals under strict conditions.

8) Are there any restrictions on the acquisition of real estate by foreign legal entities?

Yes in Cyprus, there are restrictions on the acquisition of real estate by foreign legal entities, particularly those from non-EU/EEA countries. Foreign legal entities owned or controlled by non-EU nationals must obtain government approval before purchasing real estate in Cyprus.

9) Are there any business or office localization requirements for foreign investors?

Foreign investors must maintain a registered office in Cyprus, but there is no general requirement to localize business operations or hire local staff, except in regulated industries or for tax substance reasons.

10) Are sanctions or other restrictions applied to investors from specific countries?

Cyprus enforces sanctions and restrictions on investors from specific countries, primarily as part of its obligations under:

• European Union (EU) regulations;
• United Nations (UN) sanctions;
• U.S. sanctions (in practice, though not legally binding, they are often respected to maintain international banking relations).

These measures affect both individuals and entities, and apply regardless of whether the investor is foreign or Cypriot.

Author: Nasos Kyriakides