Foreign Ownership in Cyprus: Key Regulations

Published on October 2, 2025 and written by Cyril Jarnias

Cyprus, a Mediterranean island at the crossroads of Europe, Asia, and Africa, is increasingly attracting foreign investors thanks to its favorable tax environment and business-friendly regulatory framework. Whether you’re considering purchasing real estate, starting a business, or investing in Cypriot funds, it’s crucial to understand the rules governing foreign ownership on the island. This article will guide you through the key aspects to know for investing confidently in Cyprus.

A Welcoming Legal Framework for Foreign Investors

Cyprus stands out for its open policy toward foreign capital. The country imposes few restrictions on non-European investors looking to acquire property or establish businesses within its territory. This liberal approach aims to attract foreign direct investment and stimulate the local economy.

Cypriot authorities have implemented several incentive programs, the most well-known being the Cyprus Investment Program (CIP). Although this program was suspended in 2020 following controversies, it illustrates the country’s commitment to attracting wealthy investors by offering significant benefits, such as facilitated access to permanent residency.

Today, Cyprus relies on other mechanisms to attract investors, notably its favorable tax regime and the possibility of obtaining an expedited residence permit by investing in real estate or a local business.

Acquiring Real Estate in Cyprus: What Rules Apply to Foreigners?

Purchasing real estate in Cyprus is relatively straightforward for foreigners, whether they are EU nationals or from third countries. There are no major restrictions on foreign real estate ownership, with a few exceptions:

• Non-Europeans are limited to purchasing one residential property.
• Acquiring agricultural land is subject to specific conditions for foreigners.
• Certain areas, particularly near borders, may be subject to restrictions for national security reasons.

To purchase property, foreigners must obtain approval from the Council of Ministers. This procedure is generally a formality and takes about 1 to 2 months. The purchase must be made with foreign currency imported into Cyprus, allowing for the free repatriation of funds upon resale.

It’s important to note that the situation is different in the northern part of the island, which is not internationally recognized. Purchasing property in this area carries significant legal risks and is not recommended without thorough legal advice.

Creating or Acquiring a Business in Cyprus: A Simplified Process

Cyprus offers a conducive environment for business creation by foreigners. Non-European investors can create or acquire Cypriot companies without major restrictions in most sectors. The creation process is relatively quick and can often be completed online.

Key points to remember:

• There is no minimum capital requirement to create a limited liability company.
• At least one director and one shareholder are required, who can be foreigners.
• Certain sectors (such as banking, insurance, or media) may require specific licenses.
• Foreign companies can establish branches or representative offices in Cyprus.

Investing in an existing Cypriot company can also qualify for an expedited residence permit, provided you invest at least €300,000 in share capital and create at least 5 local jobs.

Investing in Cypriot Funds: An Option to Consider

For investors seeking financial opportunities without direct involvement in asset management, investing in Cypriot funds represents an interesting alternative. Cyprus has developed a favorable regulatory framework for investment funds, aligned with European directives.

The main types of available funds are:

• Alternative Investment Funds (AIF)
• Registered Alternative Investment Funds (RAIF)
• Undertakings for Collective Investment in Transferable Securities (UCITS)

Foreign investors can acquire shares in these funds without specific restrictions. A minimum investment of €300,000 in approved funds can also qualify for the expedited residence permit.

It’s important to note that these investments are regulated by the Cyprus Securities and Exchange Commission (CySEC), ensuring a certain level of protection for investors.

Practical Tips for Foreign Investors in Cyprus

To maximize your chances of success when investing in Cyprus, here are some essential recommendations:

• Engage local professionals: Lawyers, accountants, and tax advisors familiar with the Cypriot context can guide you effectively.
• Carefully verify property titles: Particularly important for real estate, due to the island’s complex history.
• Inform yourself about tax incentives: Cyprus offers numerous tax benefits to foreign investors, especially for foreign-sourced income.
• Consider opportunities in growing sectors: Tourism, technology, renewable energy, and financial services are particularly dynamic.
• Stay informed about regulatory developments: The legal framework regularly evolves to align with European and international standards.

It’s crucial to fully understand the legal and tax obligations related to your investment. For example, foreign property owners must declare their rental income and pay corresponding taxes in Cyprus.

Prospects and Challenges for Foreign Investors in Cyprus

Despite an overall favorable environment, foreign investors in Cyprus face certain challenges:

• Administrative complexity: Although simplified, some procedures can still be lengthy and complex.
• Geopolitical risks: The divided island situation can create uncertainties, particularly for investments in the north.
• International pressure: Cyprus is under increased scrutiny regarding anti-money laundering efforts, which may lead to stricter controls.

However, prospects remain positive. The Cypriot government continues to improve the regulatory framework to attract foreign investment. Sectors like information technology, renewable energy, and financial services offer promising opportunities.

The island also benefits from its strategic position and membership in the European Union, making it a bridge between Europe and the Middle East.

Investing in Cyprus offers numerous opportunities for foreign investors, thanks to a favorable regulatory framework and attractive tax benefits. Whether in real estate, business creation, or investment funds, the Mediterranean island provides an environment conducive to international business development. However, as with any foreign investment, thorough due diligence and local professional advice are essential to effectively navigate the Cypriot legal and economic landscape.