Officials said on Thursday they’re working on legislation giving authorities the discretion to bar the registration of companies for reasons of national security where such entities are controlled by non-EU nationals.

The thrust of the legislation has to do primarily with concerns over the registration of companies whose ultimate beneficial owners (UBOs) are Turks.

In parliament, officials acknowledged instances of companies registered in the Republic and where the UBOs are of Turkish nationality.

Edek MP Marinos Sizopoulos noted that two issues arise: first, the risk of espionage, and secondly the acquisition of immovable property by companies “with Turkish interests”.

Irini Mylona-Chrysostomou, the Registrar of Companies, told MPs that the matter “is very important and serious”.

She confirmed ongoing attempts by persons “of Turkish interests” to register companies. Whenever the Registrar determines such cases, it liaises with the district officers before green-lighting a company’s registration.

Turkish nationals who are UBOs of companies or partnerships registered in Cyprus are subject to mandatory disclosure in the central Register of Beneficial Owners (UBO Register) managed by the Registrar of Companies. The framework, aligned with EU Anti-Money Laundering directives, requires identifying any natural person holding over 25 per cent of shares or voting rights, or otherwise exercising control.

An official with the attorney-general’s office said they’re currently giving feedback on two bills drafted by the government.

The first bill applies to corporations, the second to partnerships between individuals. Regarding the former, it will regulate a company’s registration, the transfer of a company’s seat to a different jurisdiction, and changes in a company’s officials. It would also give authorities the right to strike companies from the registry on national security grounds.

Speaking to media later, Diko MP Zacharias Koulias – who chairs the House audit committee – said the situation has gone “unchecked” for years.

He urged authorities to submit legislation to parliament quickly, so that it can pass it before the House dissolves in April ahead of the legislative elections.

Akel’s Christos Christofides cautioned that authorities are already playing catch-up.

“The situation is not at the eleventh hour, we’re way past it,” he said.

The MP warned that the mass acquisition of assets – primarily land – by non-EU nationals poses a threat to the country’s sovereignty.

Akel says there has been an uptick in foreign nationals buying up real estate near airports, army camps, the ceasefire line and the coastline.

Separately to this, but related, political parties have submitted three bills restricting the acquisition of real estate by foreign nationals.

MPs and government officials alike acknowledge that the current legislation governing the acquisition of property by foreign nationals is outdated and needs major tweaking.

As the law stands, it is rife with loopholes and therefore has virtually no restrictions.

In a recent report the auditor-general indicated that an increasing and large part of the total sales of Cyprus properties have been to non-EU nationals –  including Lebanese, Israelis, Russians and Chinese.

The report found that foreign nationals are increasingly snapping up immovable property in Cyprus, accounting for over a quarter of all property sales in 2024 – although that ratio was likely an undercount as it did not include Cyprus or EU companies with foreign interests.

For example, a company controlled by non-EU beneficiaries incorporated in Cyprus or the EU is classified as a domestic entity.