Cyprus is finalizing a new national framework for screening Foreign Direct Investment (FDI) to align with EU Regulation 2019/452. The bill, approved by the Council of Ministers in July 2025, mandates that non-EU/EEA/Swiss investors notify the Ministry of Finance at least 10 days before finalizing significant investments. The mechanism focuses on safeguarding strategic infrastructure, including energy, health, and financial services, where an investment exceeds €2 million or involves a 25% or greater shareholding. This oversight ensures transparency and protects national security while bolstering Cyprus's international credibility as a secure investment hub.

The Cyprus 2026 Tax Reform (pending approval) modernizes the system with these key shifts:

• Corporate: Rate increases to 15% (from 12.5%); Dividend tax drops to 5% (from 17%).

• Personal: Tax-free threshold raised to €20,500; new tax credits for families and students.

• Crypto: New flat 8% tax on profits from disposal/exchange.

• Real Estate: Rental SDC abolished; property swaps are now tax-free.

• Compliance: Mandatory tax returns for all residents over 25; stricter powers for the Tax Commissioner to seal non-compliant businesses.

Grant Thornton Cyprus has officially achieved the ISO/IEC 27001 certification, the global benchmark for Information Security Management Systems (ISMS). This milestone validates the firm's robust approach to data protection and risk management, covering people, technology, and internal processes. The certification is valid for three years and underscores the firm’s ability to move beyond theory, embedding high-level cybersecurity principles into daily operations to safeguard sensitive client and company data.

1. Taxation of Provident & Pension Funds Funds tax-exempt for 20+ years; no EU pressure to change. 29 of 36 OECD countries don't tax fund returns. Unfair to employees, civil servants, and lower-income earners. Hurts long-term savings and Cyprus's fund industry competitiveness.

2. Corporation Tax Increase (12.5% → 15%) Justified as offsetting SDC dividend reduction (17% → 5%), but the OECD Pillar Two argument is misapplied — Pillar Two only affects MNEs with €750M+ revenue (<2% of Cyprus companies). Frequent rate changes undermine Cyprus's stability as an international financial centre.

3. Excessive Tax Commissioner Powers Proposed powers (suspending operations, seizing shares, blocking property transfers) bypass court oversight. Risks legal uncertainty and damages Cyprus's prestige. Better solution: faster, more efficient courts.

Bottom line: Reform is generally a positive step, but these 3 areas need reconsideration to preserve Cyprus's competitiveness as an international financial centre.

A Cyprus International Trust (CIT), governed by the Cyprus International Trusts Law of 1992, allows a settlor to transfer assets to a trustee for the benefit of chosen beneficiaries. To qualify, the settlor and beneficiaries must be non-Cyprus residents in the year preceding the trust's establishment, and at least one trustee must be a Cyprus resident throughout its duration.

The structure offers two standout advantages: robust asset protection (shielded from creditor claims, bankruptcy, and legal disputes, with a strict 2-year challenge window) and significant tax efficiency (foreign-sourced income is not taxed in Cyprus for non-resident beneficiaries, plus no inheritance or estate tax). Settlors can also retain meaningful powers, including the ability to revoke the trust, appoint/remove trustees, and direct distributions.

A CIT is an attractive vehicle for international families seeking secure, private, and tax-friendly cross-generational wealth planning.