Key Facts

The Belgian foreign investment (FI) screening regime provides for a mandatory and suspensory notification requirement for non-EU investors that acquire control over or voting rights in Belgian entities that are active in certain sensitive sectors. The regime is fairly new as it entered into force on 1 July 2023.

Transactions covered by the rules

Investor scope

The Belgian FI regime only screens investments by non-EU investors. This covers both companies that have their main residence outside the EU, as well as EU companies with an ultimate beneficial owner (UBO) outside the EU.

Target scope 

The regime applies to the acquisition of control over, or the acquisition of at least 10% or 25% of the voting rights (depending on the sector) in Belgian entities active in sensitive sectors. Investments in a non-Belgian target may also trigger a filing if the target has a Belgian subsidiary.

Transaction scope

The Belgian regime is broadly based on two different types of notification thresholds:

• Acquisitions of control over, or 25% or more of the voting rights in, a Belgian entity whose activities relate to critical infrastructure, critical technologies, critical inputs, access to sensitive information, private security, freedom of media or biotechnology. There is no size or turnover threshold applicable for these sectors, except for biotech where the Belgian entities’ total global turnover must exceed €25m in the financial year preceding the investment.

• Acquisitions of control over, or 10% or more of the voting rights in, a Belgian entity that (i) is active in certain strategic sectors in Belgium (defence (including dual-use products), energy, cybersecurity, electronic communications, or digital infrastructures) and that (ii) realised a total global turnover exceeding €100m in the financial year preceding the investment.

Greenfield investments are excluded from the scope of the screening regime.

For more information, see our publications below:

• Foreign investment control in Belgium – Lessons learnt from one year of practice (July 2024)
• Foreign investment control in the Benelux – Belgium starts screening foreign investments (July 2023)

Key facts

Canada has an extensive, multi-faceted, and long-standing foreign investment regime. Given recent enforcement action and policy changes, national security should be top-of-mind for foreign (non-Canadian) investors. Any acquisition of control of a “Canadian business” by a “non-Canadian” is either “notifiable” or “reviewable” pursuant to the Investment Canada Act (ICA), which governs foreign investment in Canada. Investments that do not include an acquisition of control can also be subject to a national security review. The relevant authorities include the Minister of Innovation, Science and Industry Canada, (in consultation with Public Safety Canada and Canada’s security and intelligence agencies for investments involving a national security review), as well as the Minister of Canadian Heritage (for cultural investments).

Canada’s voluntary foreign investment filing regime for transactions falling outside the mandatory rules took effect in August 2022. This raises strategic filing considerations in transactions which are not mandatorily notifiable. In addition, once in force (expected in Q4 2024 or Q1 2025) recent amendments to the ICA will introduce mandatory pre-closing notification requirements for specified investments (for controlling and some minority investments) by non-Canadians in certain business sectors. The list of prescribed business activities has not been published as of June 2024, but is expected to compare to the similar US and UK lists of industries.

Thresholds

The ICA applies to all non-Canadians investing in or establishing a Canadian business.

An acquisition of control will be “notifiable” or “reviewable” depending on the transaction structure, the non-Canadian’s identity, and the target’s value/nature:

• “Notifiable”: transaction is below the applicable monetary thresholds or constitutes an indirect acquisition of a Canadian business; requires filing a short notification either before or within 30 days of closing.
• “Reviewable”: transaction is above the applicable monetary thresholds; requires Ministerial approval before closing and typically requires negotiation of undertakings with the Canadian Government.

In addition, all investments in an entity that has operations, employees or assets in Canada, regardless of size or whether control is acquired, can be reviewed on national security grounds. This same applies when establishing a new Canadian business.

Control is generally defined as the acquisition of a majority of the voting or undivided ownership interests of an entity. The acquisition of all or substantially all of an entity’s Canadian assets also constitutes control. For corporations only, a rebuttable presumption of control is triggered by the acquisition of at least 33.3% of voting shares of a corporation.

For more information, see our publications below:

• Foreign Investment screening: international cooperation - the secret weapon to better protect national interests? (May 2023)
• Watch this space: sweeping reforms proposed to Canada’s foreign investment regime (March 2023)
• So hot right now: booming foreign investment in data centres faces regulatory heat (Part 3) (March 2022)
• The curious case of the missing review: Canada clears Chinese investment in Canadian lithium mining company (January 2022)

Key facts

Foreign investors should consider whether any of the five foreign investment regimes in the People’s Republic of China (PRC) apply to their transactions. The key criterion is whether a foreign investor is proposing to acquire shares in a Chinese company, assets in China, or is establishing a business (either entity or project), or otherwise involved in an investment in the PRC. Several changes to the regimes came into effect on 1 January 2020 and 18 January 2021 (for National Security Review (NSR)).

The authorities responsible for the filing regimes are the State Administration for Market Regulation (SAMR), the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM).

Thresholds

1. NSR Regime  

NSR clearance is required from the NSR working mechanism office (NSR Office) - jointly led by the NDRC and MOFCOM - where the target is in one of the applicable categories set out in the Measures for the Security Review of Foreign Investment. 

If it is in a Category A sector (e.g. military or national security/defence) or in locations close to Category A facilities, a pre-closing filing will be required, even if only a minority (non-controlling) interest is acquired. If it is in a Category B sector (e.g. key technologies, important energy or infrastructure, or otherwise in a “sensitive sector”), a pre-closing filing will only be required if actual control is obtained.

2. Pre-closing approval by MOFCOM

Under the former rules (which may or may not be applicable in practice), pre-closing approval by MOFCOM is required for the acquisition of a Chinese entity in the following cases if the offshore acquirer: 

• is established or ultimately controlled by a Chinese domestic entity or Chinese individual and such domestic entity or individual is also affiliated with the target; 
• is using offshore shares as the consideration for the acquisition; or
• acquires control of a famous brand or household name or control of an entity in a key industry. 

Depending on the specific rules, "control" in the above contexts is "substance-focused" as it can include a shareholding of 50% (or a lower ownership percentage with significant influence over the target), or de facto control of the target's business policies, irrespective of shareholding.

3.Restricted Sector review/SAMR registration 

SAMR is responsible for reviewing transactions where the target is active in a sector covered by the national or respective Free Trade Zone (FTZ) “negative list” (Restricted Sector). Restricted Sector limitations on foreign ownership/management, as well as industry-specific regulatory approvals/filings, may apply. 

Registration with the relevant bureau of SAMR is required if the investment involves a direct change in the shareholding of an FIE or changes to its legal representatives, directors, supervisors, or managers. 

4. Industrial/infrastructure projects

Pre-closing approval by, or filing with, NDRC at the relevant level is required for industrial/infrastructure projects invested in by a foreign investor. This is not required if the target is in a financial sector. 

5. MOFCOM information reporting

MOFCOM information reporting is required for all foreign invested enterprises (FIEs). These requirements came into effect on 1 January 2020, replacing the previous filing-based system for the establishment of, and changes (including changes to the ultimate controller(s)) to, FIEs.

For more information, see our publications below:

• Rumour has it… what information-sharing is permitted between foreign investment and merger control authorities? (August 2022)
• China’s revamped national security regime poses new challenges for foreign investors (March 2021)

Key facts

The EU does not operate a separate foreign investment review regime but co-ordinates and encourages the harmonisation of the national foreign investment review rules of its Member States.

To align the national investment reviews, the EU issued the FDI Screening Regulation (the Regulation), which came into effect on 11 October 2020. 

The Regulation seeks to promote best practices, cooperation and information sharing regarding foreign investment control between the Commission and EU Member States and includes a list of sensitive sectors which are likely to be relevant for public security and order.

Thresholds

As there is no separate foreign investment regime exercised by the EU, it does not contain specific acquisition thresholds. However, the Commission can issue opinions in cases where foreign investment is likely to affect security or public order in more than one Member State, or if it has relevant information in relation to the Regulation. 

The Member States shall give due consideration to the Commission’s opinions but are not bound by them.

For more information, see our publications below:

• Filling the ‘blank spots’ on the European FI map – where are we? (March 2024)
• The long and complex road to EU outbound investment screening (February 2024)
• The problem of divergence in EU Foreign Investment review: will the proposed EU FDI Screening Regulation close the gaps? (January 2024)
• Tug of war continues… changes to the EU FDI Screening Regulation could find Member States restricting investment by EU-based companies with third-country ownership, among other changes (November 2023)\
• Three years on: The Commission reports a big rise in foreign investment screening, so what can we expect next? (October 2023)
• The EU’s foreign investment screening regulation – Part 2: what does the future hold? (September 2023)
• The EU’s foreign investment screening regulation – Part 1: how successful has it been? (September 2023)
• Tug of war over... or just beginning? Court of Justice finds Member States cannot (always) restrict investment by EU-based companies with third-country ownership (July 2023)
• US and EU outbound investment – where are we? (June 2023)

Key facts

Any investment by a “foreign” entity or person in a French entity operating in a sector listed in the Monetary and Financial Code is subject to foreign investment control, regardless of whether the sector is considered “sensitive”. 

An “investment” is not limited to acquiring control but also includes exceeding certain voting rights thresholds (25% in principle, 10% in listed companies) (for non-EU investors). 

The scope of the rules is intentionally unclear so as to capture as many transactions as possible.

Thresholds

A foreign investment in a French company carrying out any of the activities listed in the Monetary and Financial Code is subject to the prior consent of the Minister for the Economy. The scope of the rules is intentionally unclear so as to capture as many transactions as possible. 

There are no monetary thresholds under French law, and a filing may be required even if the turnover of the French company is very low.

For more information, see our publications below:

• When to look at the fine print: Does your agreement trigger an FI filing? (May 2024)
• Second public veto in France against a US investor (October 2023)
• Upcoming extension of French FDI control regime (September 2023)
• Is the energy crisis fuelling additional scrutiny of foreign investment in this sector? (December 2022)
• Defending the citadel: When foreign investment rules are weaponised to defend against unwanted takeovers (December 2022)
• The expansive scope of foreign investment regulations: A look at ‘unexpected’ transaction types (November 2022)
• French FDI Guidelines: Key Takeaways (September 2022)
• Interview with the French Ministry for the Economy: Insights on the French FI regime (June 2022)

Key facts

The German foreign investment rules contemplate a three-pillar review regime, consisting of: 

• The mandatory sector-specific investment review; 
• The mandatory cross-sector notification investment review; and 
• The voluntary investment review. 

In addition, the Federal Ministry for Economic Affairs and Climate Action (MoE) has the ability to call-in certain transactions for five years after signing. 

Over the last seven years the German legislator has substantially strengthened and extended foreign investment control rules in Germany. By way of example, in 2020 there were four main reforms, including the introduction of criminal sanctions and fines for gun jumping in case of mandatory filing requirements. Further reforms took place in 2021, adding 16 additional sectors to the scope of the list of activities where a mandatory filing is required and introducing new acquisition thresholds, including the concept of acquisition of atypical control, which can trigger a foreign investment review in the future. Since 2022, the regime has undergone an in-depth evaluation and on that basis, a further reform has been announced which will likely come in the course of 2024. However, at the moment, it is unclear when and whether such reform will come. 

Thresholds

Thresholds depend on the sector where the target is active: 

• Sector-specific regime applies to non-German investors directly or indirectly acquiring directly or indirectly: 
  • 10% of voting rights of a domestic undertaking active in certain defence related sectors or other highly sensitive areas; 
  • Assets of a separable business unit of such a domestic undertaking; or 
  • All essential operational assets of such a domestic undertaking or separable business unit thereof. 
• Mandatory cross-sector regime (direct/indirect) applies to non-EU/ EFTA investors directly or indirectly acquiring: 
  • 10% or 20% (depending on the target’s activity) of voting rights of a domestic undertaking active in certain sensitive sectors; 
  • Assets of a separable business unit of such a domestic undertaking; or 
  • All essential operational assets of such a domestic undertaking or separable business unit thereof. 
• Voluntary cross-sector regime applies for non-EU/EFTA investors directly or indirectly acquiring: 
  • 25% or more of voting rights of a domestic undertaking active in any other non-sensitive sector; 
  • Assets of a separable business unit of such a domestic undertaking; or 
  • All essential operational assets of such a domestic undertaking or separable business unit thereof. 
• Follow-on transactions by the same investor may trigger new notification requirements if the total voting rights held by an investor exceed 20%, 25%, 40%, 50% or 75% post-transaction.

For more information, see our publications below:

• When to look at the fine print: Does your agreement trigger an FI filing? (May 2024)
• Navigating the Vast Sea of Foreign Investment Control in Germany: A Retrospective and Prognosis (February 2024)
• Double Defeat: Position of foreign investors strengthened by recent judgments in Germany (December 2023)
• Foreign Investment screening: international cooperation - the secret weapon to better protect national interests? (May 2023)
• Chip War: Foreign Investment Control at Arms (April 2023)
• Is the energy crisis fuelling additional scrutiny of foreign investment in this sector? (December 2022)
• Foreign investment takeaways from the tech sovereignty battleground (May 2022)
• The curious case of Gazprom Germania – how the Ministry intervened in the transfer of critical infrastructure to a Russian company purportedly led by a DJ (April 2022)
• How is German Foreign Investment working in practice? Key takeaways from our podcast with the Ministry (March 2022)

About the regime

The Golden Powers Regulation (GPR) is the main set of rules on foreign investments in Italy. The GPR originally only provided for a mandatory filing in a limited number of sectors, i.e. defence, national security, energy, transport and communications. However, over the years, the scope of application has been substantially extended to numerous additional sectors. 

The authority responsible for the enforcement of the “golden power” rules is the Italian Government. Under the GPR, the Italian Government has the power to conditionally approve or veto transactions constituting a threat of serious prejudice to essential national interests in relation to companies active, or having assets or relationships in, sensitive sectors.

Thresholds 

Notification requirements cover, among others: 

• any investor (including Italian investors) acquiring (direct or indirect) control of strategic companies (Strategic Companies) in the communications, energy, transport, health, agri-food, financial, credit or insurance sectors; and 
• non-EU investors acquiring (directly or indirectly) 10% (as well as further acquisitions exceeding the thresholds of 15%, 20%, 25% and 50%) or more of the corporate capital or voting rights, taking into account the shares and voting rights already directly or indirectly owned, of Strategic Companies in the abovementioned sectors as well as in other sensitive sectors, provided that the overall value of the investment is equal to or greater than €1m. 

Lower thresholds apply for any investor (including Italian investors) in relation to acquisitions of shareholdings in a Strategic Company active in the defence or national security sectors.

For more information, see our publications below:

• When to look at the fine print: Does your agreement trigger an FI filing? (May 2024)
• Chip War: Foreign Investment Control at Arms (April 2023)
• Italy adopts a pre-notification procedure for Golden Power filings: will it really be a turning point? (September 2022)
• Italy’s foreign investment regime: strong enforcement, in a constantly shifting landscape (April 2022)
• The ever-widening scope of the Italian FI rules: What should we expect over the coming months? (April 2021)

Key facts

The Japanese foreign investment scheme is a mandatory regime. Foreign investors are required either (i) to obtain a pre-closing approval or (ii) file a post-closing notification depending on the identity of the acquirer and the nature of the Japanese business subject to the investment. If pre-closing approval is required, closing is not permitted before the local clearance and the statutory review period is 30 calendar days.

Key thresholds

Pre-closing approval is required for any direct investment by a foreign investor in a Japanese company:

• active in sensitive sectors (or whose Japanese subsidiary is active in sensitive sectors) and not listed on the Japanese stock exchange, regardless of the level of the shareholding or voting rights.
• active in sensitive sectors (or whose Japanese subsidiary is active in sensitive sectors) resulting in the acquirer holding 1% or more of the shares or voting rights. For pure investment purposes (where the investor does not appoint officers to, or get involved in the business of, the Japanese company in any way), the 1% threshold may be raised up to 10% or more depending on the business of the foreign investor and/or the Japanese listed company, in which case a post-closing notification is required. Japan’s Finance Ministry has published a list of companies operating in core national security industries to come under this new foreign direct investment-notification threshold, which has been applicable since 7 June 2020 (available here).

Post-closing notification is required for any direct investment by a foreign investment in a Japanese company that is active solely in non-sensitive sectors resulting in a holding of 1% (10% in case of a company not listed on the Japanese stock exchange) or more of the shares or voting rights.

The acquisition of a foreign entity that already holds a Japanese company does not trigger a filing.

For more information, see our publication below:

• Foreign Investment and Minority Shareholdings: How low can they go? (March 2021)

Key facts

The Netherlands adopted a foreign investment (FI) screening regime that entered into force on 1 June 2023. It introduces a mandatory and suspensory notification requirement for all in-scope transactions. The regime applies to all investors (including Dutch investors) but only covers a small number of key strategic sectors and companies in the Netherlands.

Thresholds

Investor scope

The Dutch regime is a general investment control regime that will apply equally to non-EEA, EEA and Dutch investors. In that sense, the FI regime is closer to a national security regime than a foreign investment control regime. The scope of the Dutch regime is primarily driven by the target and/or sector of the investment rather than by the investors’ identity.

Target scope 

The regime will apply to companies based in the Netherlands that are either: (a) a “vital” supplier (including a list of key companies such as NAM, GasTerra, KLM, Schiphol Group and the Rotterdam Port Authority, as well as companies active in nuclear power, heat transportation networks, ground (fuelling) services, significant companies active in the financial services industry); (b) an operator or manager of a business campus; or (c) active in the field of (highly) sensitive technologies (such as dual-use products, military goods, quantum technology, photonic technology, semiconductor technology or high assurance products). The Dutch government is currently considering adding other technologies to the list, such as biotechnology.

To qualify as a Netherlands-based company, it suffices that an entity carries out activities and has its effective management in the Netherlands. Importantly, the regime also covers the indirect acquisition of a non-Dutch target if it has a Netherlands-based subsidiary. Greenfield investments fall outside the scope of the regime.

Limited retroactive application

The rules applied retroactively to investments completed after 8 September 2020. Transactions closed between 8 September 2020 and 1 June 2023 could be called in for (post-closing) review up until 8 months after the regime entered into force, i.e., 1 February 2024.

For more information, see our publications below:

• Foreign investment control in the Netherlands – Lessons learnt from one year of practice (July 2024)
• Foreign investment control in the Benelux … Part 2 – The Netherlands initiates a general investment screening regime (June 2023)
• New Dutch FI regime on the horizon – what you need to know (September 2021)

Key facts

Poland operates a foreign investment screening regime that was initially devised as a part of Covid-19 measures aimed at supporting the Polish economy, but in 2022 it was prolonged until July 2025.

The regime covers a broad scope of acquisitions performed by foreign investors with: 

• pre-closing suspensory approval requirement for direct acquisitions of protected entities; and 
• post-closing approval requirement in case of indirect acquisitions of protected entities (e.g. when the transaction concerns the acquisition, by a non-Polish entity, of a stake in a Polish protected company, which falls within the regime). 

The authority responsible for reviewing FI notifications is the Polish competition authority (PCA). 

Poland operates a separate foreign investment regime for: (i) investments into strategic companies listed in the Polish Council of Minister’s regulation (17 as at July 2024); as well as (ii) land/real estate acquisition by non-EEA investors.

Thresholds

A transaction that results in an acquisition of a significant interest in, or dominance over, a Polish protected entity by an investor from outside of the EU/EEA or OECD will require clearance from the PCA. The PCA will decide whether the transaction may endanger public policy, security or health. 

Protected entities are companies which are domiciled in Poland, had Polish turnover in one of the two financial years preceding the transaction exceeding €10m, and meet at least one of the criteria below: 

• are publicly listed in Poland (i.e. on the Warsaw Stock Exchange or a multilateral trading facility, i.e. New Connect); 
• hold assets considered as critical infrastructure (e.g. communication and information systems, healthcare systems, energy supply systems); 
• develop the software to operate the specified systems (e.g. cloud computing, data processing, transportation systems, financial or payment services); or 
• are active in one of the sectors that are considered as sensitive (e.g. telecommunications, energy, defence, chemical, software, pharmaceutical, food and beverage sectors or stevedoring in Polish ports, cloud computing). 

Transactions concerning acquisitions of companies domiciled outside Poland are not caught, even if such a company is active in a sensitive sector and generates more than €10m turnover in Poland. 

The entity responsible for filing is either the acquirer (for direct acquisitions) or a company that holds at least a 20% stake in, or dominance over, the protected entity (for indirect acquisitions).

For more information, see our publication below:

• Poland’s Covid-related foreign investment regime: it may not show up as often as expected - but it can still trip you up! (May 2021)

Key facts

The Russian foreign investment regime generally applies if the transaction results in the (direct/indirect) transfer of any shares or rights in respect of a Russian entity or assets located in Russia or owned by a Russian entity. 

The Russian foreign investment regime is well-established, having been in place since 2008 with some restrictions going back to the 1990’s, but it branched out after February 2022 and now includes the newer countersanctions rules, which are subject to frequent updates usually without prior notice. 

The most complex rules apply to the 60+ sensitive – ‘strategic’ – sectors with certain pre-closing approvals potentially taking up to 12 months or longer to obtain, however, the Russian foreign investment regime is much broader than just the strategic sectors. Additional industry-specific foreign investment restrictions and restrictions for state-controlled investors and international organisations further enhance the complexity of the regime. The countersanctions regime is aimed at scrutinising exits of foreign investments from Russia, but also applies to any incoming investments and catches global transactions if they have a Russian nexus. 

Notably, transactions with a Russian nexus can often require multiple Russian clearances from several regulators, which can include the President of Russia personally.  

Thresholds

Whether or not the Russian foreign investment regime is triggered should be checked in every transaction that results in a transfer (direct/indirect) of any shares or rights in respect of a Russian entity or assets located in Russia or owned by a Russian entity, but also if any party to the transaction has any Russian presence in the form of a local entity, however small and indirect the shareholding in it may be.

The exact thresholds will usually depend on the exact combination of: (i) the type of Russian entity (in particular, if it is engaged in any strategic activity(ies) or included in any “protected lists”); (ii) the identity of the investor (including nationality, its beneficiaries/controlling persons, e.g., whether it is or is controlled by a Hostile Nation Person/Entity, a foreign state or international organisation); (iii) the identity of the counterparty (e.g., seller) and other participants (if any) in the target (same as above for the investor); and (iv) the transaction structure (asset or share deal, acquisition of control or blocking rights, acquisition or sale, etc.). 

The combinations may result in: suspensory pre-closing clearance; pre-closing disclosure of UBOs; post-transaction notification or clearance; or a prohibition to acquire. Clearance may need to be sought from the Governmental Commission for Control over Foreign Investments (GC) (which is essentially the entire Russian Government), the newly formed Sub-Commission of the GC (Sub-GC), the Federal Antimonopoly Authority (FAS) or the President of Russia himself; it is not uncommon for multiple filings and clearances to be required for one transaction.

Filings may be triggered by the acquisition of just one share (or 1%) in a Russian entity, directly or indirectly, though foreign investment filings outside the countersanctions regime are usually triggered by an acquisition of 5%/25%/50% or more shares (votes) in a Russian entity, or of blocking or controlling rights in respect of a Russian entity or certain types of assets owned by such entity. 

(Note that cross-border payments and other transactions involving Russian persons, Russian entities or the Russian financial system are subject to further restrictions).

For more information, see our publications below:

• Leaving Russia: the snowballing price of exits (October 2023)
• Leaving Russia: the price of exit and other regulatory hurdles (March 2023)
• Russian foreign investment regime: some rules tightened, others relaxed (November 2021)

Key facts

Spain has three alternative regimes of foreign investment (FI) screening, introduced by law in 2020 and adjusted in 2023 through an implementing regulation (applicable to FI proceedings initiated on or after 1 September 2023, irrespective of the date of signing): 

1. A general regime, applicable to non-EU or non-EFTA investors, under which the acquisition of 10% or more of the shares in a Spanish company or control of such company or a part of it (by means of a corporate transaction or an investment in assets or branches of activity), is subject to prior authorisation (from the Council of Ministers or, if the transaction value is below €5m, from the Directorate General of International Trade and Investment) if (a) the target company operates in a sensitive sector or (b) the foreign investor has certain characteristics (ie is controlled by a foreign government, has previous sensitive investments or has a history of illegal activity). 
2. A temporary regime, applicable to non-Spanish EU or EFTA investors, under which the acquisition of 10% or more of the shares in a Spanish company or control of such company or a part of it (by means of a corporate transaction or an investment in assets or branches of activity) is subject to prior authorisation (from the Council of Ministers or, if the transaction value is below €5m, from the Directorate General of International Trade and Investment) if (a) the target company operates in a sensitive sector, and (b) the target company is listed in Spain or the value of the investment in Spain is more than €500m. This regime applies until 31 December 2024, but it could be extended. 
3. Finally, a special regime for investments in the field of national defence, applicable to non-Spanish investors, under which the acquisition of 5% or more of the share capital of a Spanish company with any activities directly related to national defence, or the right to appoint (directly or indirectly) one member of its managing body, is subject to prior authorisation from the Council of Ministers. Under the 2023 implementing regulation, investments in the field of national defence in which the investor reaches between 5% and 10% are exempted from authorisation if the investor notifies the transaction to the Directorate General of Armaments and Materiel (within the Ministry of Defence) and the Directorate General of Foreign Trade and Investments (within the Ministry of Industry, Trade and Tourism) and includes with this notification a document in public deed committing not to use, exercise or assign to a third party its voting rights nor to take part in the management bodies. Activities directly related to national defence include the production or trade of weapons, munitions, explosives and war materials, but also could include less obvious areas, such as IT, engineering, communications systems or logistical services that are necessary to military operations.

Thresholds

For the purposes of the general regime, foreign investments are defined as investments carried out, in Spain, by investors who are residents of countries outside the EU/EFTA, or by residents in the EU/EFTA whose beneficial owners are foreign investors (ie where the foreign investor possesses or ultimately controls, directly or indirectly, more than 25% of the capital or voting rights in the investor, or where by other means it exercises direct or indirect control of the investor), in cases where, as result of the transaction, the foreign investor reaches ownership of 10% or more of the Spanish company, or acquires control of that company or a part of it. 

Under the temporary regime, the same notion applies in largely the same way: covered investments are those carried out by residents of EU/EFTA countries (other than Spain) or by Spanish residents whose beneficial owners are (non-Spanish) EU/EFTA investors (ie where such investor possesses or ultimately controls, directly or indirectly, more than 25% of the capital or voting rights in the investor, or where by other means it exercises direct or indirect control of the investor) where, as result of the transaction, the foreign investor reaches ownership of 10% or more of the Spanish company, or acquires control of that company or a part of it. 

For an investment under the temporary regime to trigger approval, the target company or the transaction must also meet the following conditions or thresholds:

• The target must be a listed company in Spain (“companies listed in Spain are those whose shares are, in whole or in part, traded on a Spanish regulated market and have their registered office in Spain”), or 
• The “investment value” in Spain must be more than €500m. 

If such investments also meet the additional requirements under each regime (see “Transactions covered by the rules” below), they will require prior approval by the Spanish Council of Ministers or, if the transaction value is below €5m, from a Directorate General of International Trade and Investment. 

Finally, under the special regime for investments in the field of national defence, the notion of foreign investor is the same as above: those who are residents of countries outside Spain or Spanish residents whose beneficial owners are non-Spanish investors (ie, where such investor possesses or ultimately controls, directly or indirectly, more than 25% of the capital or voting rights in the investor, or where by other means it exercises direct or indirect control of the investor) or, if they are natural persons, that hold a foreign nationality. In those transactions, the relevant investment threshold is 5%, and there is no express minimum threshold.

For more information, see our publications below:

• Spain approves its FI Implementing Regulation: key points (July 2023)
• How do you ascertain whether transactions trigger FDI controls in Spain? By using the “informal query” process (December 2021)
• Foreign Investment and Minority Shareholdings: How low can they go? (March 2021)

Key facts

Sweden has embraced the global trend of growing scrutiny of foreign investments. The Swedish foreign investment screening regime (SFA) entered into force on 1 December 2023, and investments in a broad scope of protected activities are now subject to mandatory and suspensory notifications. 

The SFA provides for mandatory pre-closing notification where (1) an investor, regardless of nationality, (2) acquires influence (3) over a Swedish entity that (4) carries out a protected activity. 

Thresholds

The SFA provides for multiple “triggering events” for when the investor acquires “influence”. This includes acquisitions of 10%, 20%, 30%, 50%, 65% or 90% of the voting rights in a Swedish company engaged in a protected activity. A filing can also be triggered if the investor obtains “influence” over the target by other means, for example where the investor gains extra special voting rights through shareholder agreements or has the right to appoint or dismiss board members.

For more information, see our publications below:

• Sweden leaps on the FDI bandwagon: what you need to know (March 2023)
• Gimme! Gimme! Gimme! …Swedish FDI in December (November 2023)

Key facts

The UK National Security and Investment Act (NSIA) entered into force on 4 January 2022. 

The NSIA establishes a screening regime for investments in the UK, with a mandatory notification obligation for 17 of the most sensitive sectors and a voluntary regime for other areas of the economy (coupled with a broad power for Government to “call in” transactions for review in any sector). The NSIA has an incredibly broad jurisdictional scope and no de minimis turnover, transaction value or market share thresholds. 

As the much more far-reaching NSIA applies in relation to national security concerns, the Secretary of State (SoS) is no longer able to intervene on national security grounds through the prior public interest regime, under the Enterprise Act 2002 (EA02). However, the Government retains the power to intervene in mergers and acquisitions that raise public interest concerns in relation to the stability of the UK financial system, maintaining the UK’s capability to combat, and mitigate the effects of public health emergencies, and media plurality. 

In addition, the Digital Markets, Competition and Consumers Act 2024 (DMCC) introduced amendments to the EA02, which prevent foreign state powers from gaining control or influence over UK newspaper enterprises.

Thresholds

The NSIA contains a broad definition of “trigger events”. For the mandatory regime, a “trigger event” arises where a person acquires more than 25%, 50% (or 75% or more) of votes or shares in an entity (or voting rights in the entity that enables it to secure or prevent the passage of any class of resolution governing the entity’s affairs). 

For the voluntary regime:

• In addition to the trigger events under the mandatory regime, a different threshold applies for acquisitions involving “material influence”. This is a familiar concept from the UK merger control context (and can be triggered by acquisitions of shareholdings as low as 10-15%). 
• For assets, a person gains control where they acquire a right or interest and, as a result, is able either to (i) use the asset, or use it to a greater extent than prior to the acquisition, or (ii) direct or control how the asset is used, or direct or control how the asset is used to a greater extent than prior to the acquisition.

There are no turnover, transaction value or market share safe harbours.

The transaction captures national and international transactions where the target has activities in the UK and/or supplies goods or services in the UK (as well as domestic transactions). There is no need for a target to have a UK-incorporated subsidiary. There are no materiality thresholds.

For more information, see our publications below:

• Read all about it! UK prohibits foreign state ownership of UK newspapers (June 2024)
• The UK government updates the NSIA guidance and clarifies the scope of the call-in power: What you need to know (May 2024)
• When to look at the fine print: Does your agreement trigger an FI filing? (May 2024)
• Changes coming for the NSIA, but does the “fine-tuning” go far enough? (April 2024)
• Changes needed to reduce the burden of UK investment screening (January 2024)
• UK government to reduce the burden of its investment screening rules (November 2023)
• UK releases 2nd Annual Report on the operation of the NSIA: key points (July 2023)
• Foreign Investment screening: international cooperation - the secret weapon to better protect national interests? (May 2023)
• New Market Guidance issued on the NSIA – what are the key changes? (May 2023)

Key facts

The US has one of the most mature foreign investment regimes and a long track record of enforcement. Most reviews are conducted by the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments in US businesses and real estate. Other non-CFIUS reviews, sometimes conducted in parallel, may be necessary for foreign investments in cleared contractors, producers of defense technologies, and telecommunications licensees. 

CFIUS has broad authority over acquisitions of control of US businesses. Mandatory filings may be required for transactions (including non-controlling investments) involving critical technology, critical infrastructure, or sensitive personal data. Additionally, CFIUS can initiate its own reviews of transactions within its jurisdiction if the parties do not submit voluntary filings and can also call in non-notified transactions at any time before or after closing. Finally, CFIUS can review non-US real estate transactions in certain locations near sensitive US government installations or training facilities.

Thresholds

CFIUS principally reviews foreign acquisitions of control of US businesses, including US operations of non-US companies. CFIUS also reviews non-controlling investments, coupled with governance/ information access rights, in US businesses engaged in critical technology, critical infrastructure, or sensitive personal data of US citizens (TID Businesses). Pre-closing CFIUS filings are mandatory for certain investments in TID Businesses in which the investor would acquire control or material governance or information access rights and either of the following two tests is met: 

• For all categories of TID Businesses, a qualifying investment is one in which the investor acquires a 25% or greater voting interest in the business and a foreign government (other than Australia, Canada, New Zealand, or the United Kingdom) holds a 49% or greater voting interest in the investor. 
• For investments of any size in a critical technology TID Business, a pre-closing filing is required if an export license would be required to share the target’s critical technology with the foreign investor or any 25% owner of the investor.

For real estate transactions, if the non-US party will receive at least three material rights with respect to the subject property, the transaction could be subject to CFIUS jurisdiction if the subject property is within or sufficiently close to specific sites. The sites, relevant distances, relevant property rights, and exceptions for certain transactions are all detailed in the CFIUS regulations.

For more information, see our resources below:

• Fewer Cases, Faster Results: CFIUS’s 2023 Annual Report to Congress (July 2024)
• The US Outbound Foreign Investment Regime Takes Shape: Key Takeaways from the Draft Regulations (June 2024)
• Threading the Needle Between National Security and Politics: CFIUS’s Review of Nippon Steel-US Steel (June 2024)
• When to look at the fine print: Does your agreement trigger an FI filing? (May 2024)
• A Bigger Backyard for CFIUS? Part II: From “National Security” to “Economic Security” (April 2024)
• A Bigger Backyard for CFIUS? Part I: Bill proposes expansion of real estate transaction reviews (April 2024)
• New Executive Order Protecting US Personal Data: Implications for Foreign Investment Reviews (March 2024)
• Slowing Down in More Ways than One: CFIUS’s 2022 Annual Report to Congress (August 2023)
• US Foreign Investment: An Update for the ‘Dog Days’ of Summer (July 2023)
• Navigating U.S. Foreign Investment