The Cyprus Ministry of Interior has admitted that the current legislation regulating the acquisition of real estate by foreigners from third countries actually allows for the circumvention of the established restrictions.
Scheme of acquisition without permits
According to the current law “On the acquisition of real estate (by foreigners) (Chapter 109), foreign citizens can submit documents to the land department on the transfer of rights to a real estate property without the mandatory conclusion of a purchase and sale agreement and without the prior permission of the district governor.
In fact, such documents are equivalent to full-fledged sales contracts. Permission is required only at the stage of completing the transfer of ownership, but it is possible to submit documents to the registry without it.
Lawyers note that in practice this allows foreigners to purchase several real estate properties at once, despite the fact that the law provides for a limit of one property. In some cases, they are satisfied with only a document on the transfer of rights, which already allows for the permanent use of a residential property without obtaining a certificate of ownership.
In this law, the concept of “acquisition” includes not only direct purchase and sale transactions, but also long-term leases (over 33 years), transfers of shares in companies that own real estate, and trusts that benefit foreigners.
The law needs to be revised
The above issue has raised concerns in parliament. MP Nikos Georgiou has repeatedly raised the issue of foreigners circumventing restrictions by registering transactions through legal entities.
The ministry confirmed that the law is outdated and requires reform. The legal service is currently preparing new amendments that should close the provisions most vulnerable to abuse and introduce a more transparent control regime.
The updated law is expected to take into account modern market realities while ensuring a balance between the interests of foreign investors and the protection of the domestic housing sector.
