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Foreign direct investment reviews 2025: A global perspective

What's inside

Understanding the ever-evolving global FDI landscape is crucial amid growing regulatory complexities in cross-border transactions and increased geopolitical tensions.

Introduction

Now a full decade in publication, White & Case's 2025 Foreign Direct Investment Reviews continues to provide a comprehensive look at foreign direct investment (FDI) laws and regulations across various countries and regions worldwide.

In this edition, we continue to offer key datapoints that can help inform parties and their advisors as they evaluate the new set of challenges presented by FDI screening requirements in cross-border transactions that span multiple countries.

FDI screening is continuously evolving, in fact, maturing. It is imperative to stay on top of the FDI requirements as transactions—be it mergers and acquisitions, investments, public equity offerings, or financial restructurings—are negotiated. Understanding the challenges, the potential remedies that could be required for approval and the proper allocation of FDI risk are key ingredients in avoiding unpleasant surprises related to timing, certainty and business plan execution.

With a new administration in the United States, a renewed US commitment to open foreign investment from allied countries, increased EU FDI cooperation, and the new geo-political lines and balances that are being drawn, the dynamics around FDI screening will be a driving consideration in the selection of investors in cross-border transactions. We continue to believe that most cross-border transactions will be successfully consummated in 2025, but understanding the evolving risks around FDI considerations will be critical.

Americas

Canada

The Canadian government continues to scrutinize foreign investments by state-owned enterprises and state-linked private investors, especially if from "non-likeminded" countries.

canada fdi 2022

Mexico

Foreign direct investments, whether undertaken directly or indirectly, are generally allowed without restrictions or without the need to obtain prior authorization from an administrative agency.

mexico fdi 2022

United States

In the US, most FDI deals are approved without mitigation, but the landscape is evolving based on a combination of expanded jurisdiction and authorities, mandatory filings applying in certain cases, enhanced focus on a broad array of national security considerations, increased rates of mitigation, further attention to monitoring, compliance and enforcement, and a substantially increased pursuit of non-notified transactions.

United States of America

EMEA

European Union

The European Commission continues to be a driver of FDI screening across the EU, with Member States now moving toward coordinated enforcement.

european union fdi 2022

Austria

The wide scope, low trigger thresholds and extensive interpretation of the Austrian FDI regime require a thorough assessment and proactive planning of the M&A process.

austria fdi 2022

Belgium

The Belgian FDI screening regime entered into force in July 2023. Investors and authorities alike are still coming to grips with the regime and the limited guidelines that help parties navigate it.

Belgium

Bulgaria

In 2024, Bulgaria established an FDI screening mechanism. Foreign investors' obligation to file for investment clearance did not become effective in 2024, but this should change soon.

Bulgaria

Czech Republic

The Czech Foreign Investments Screening Act took effect in May 2021, establishing the rights and duties of foreign investors and setting screening requirements for Czech targets.

czech republic fdi 2022

Denmark

The scope of the Danish FDI regime is comprehensive, and requires a careful assessment of investments and agreements involving Danish companies.

Denmark

Estonia

Estonia's FDI screening mechanism closed its first effective year in 2024.

estonia fdi 2022

Finland

FDI deals are generally not blocked in Finland, but the government is able to monitor and, if necessary, restrict foreign investment.

10_finland_square_800x800_0.jpg

France

French FDI screening continues to focus on foreign investments involving medical and biotech activities, food security activities or the treatment, storage and transmission of sensitive data. The nuclear ecosystem is subject to very close scrutiny.

france fdi 2022

Germany

Following numerous amendments over the past years, Germany's FDI review continued in full swing in 2024, with further significant updates expected in the coming years.

Germany

Hungary

Hungarian FDI regulation stands as a rock amid global economic storms, although there were few major changes in 2024.

hungary fdi 2022

Ireland

Ireland's Screening of Third Country Transactions Act entered into force on January 6, 2025.

ireland fdi 2022

Italy

Italy's "Golden Power Law" review more tan ten years old and continuously expanding its reach.

Italy

Latvia

The law in Latvia provides for sectoral FDI regimes for specific corporate M&A, real estate dealings and gambling companies.

Latvia

Lithuania

All investments concerning national security are under the scope of review in Lithuania.

Lithuania

Luxembourg

The Luxembourg FDI screening regime is now a year old, and the first notification filings have been made.

Luxembourg

Malta

Malta's FDI regime regulates specific transactions that must be notified to the authorities and may potentially be subject to screening.

Malta

Middle East

The Middle East continues to welcome foreign investment, subject to licensing approvals and ownership thresholds for certain business sectors or in certain geographical zones.

Middle East

Netherlands

The Netherlands is set to expand its investment screening regime by extending the general mechanism to more sectors and by introducing additional sector-specific regulations.

Netherlands

Norway

Norway's foreign direct investment regime is in the process of being expanded, with more profound changes expected in the future.

Norway

Poland

After revision of the Polish FDI regime in 2024, the way the authorities are assessing transactions is evolving.

Poland

Portugal

In Portugal, transactions involving acquisition of control over strategic assets by entities residing outside the EU or the EEA may be subject to FDI screening.

Portugal

Romania

While far-reaching in its scope, compared to other EU countries, the Romanian FDI regime is generally perceived as investor-friendly.

Romania

Russian Federation

The year 2024 was not marked by any major changes in the sphere of regulation of foreign investments in Russia, and the regulator continues to implement the course taken earlier in 2023.

Russian Federation

Slovakia

After two years of foreign investment regulation in Slovakia, a supportive climate for foreign investments remains.

Slovakia

Slovenia

Slovenia's updated FDI regime now extends to branch offices and introduces new challenges for foreign investors navigating critical sectors.

Slovenia

Spain

Since 2020, certain foreign direct investments are subject to scrutiny in Spain and, since then, additional formalities have been introduced, specifically by a developing FDI regulation that entered into force on September 1, 2023. The FDI analysis is becoming increasingly crucial in the context of investments in Spain.

Spain

Sweden

In its second year of operation, the Swedish FDI Act has become a standard component of a large portion of all transactions involving Swedish companies.

Sweden

Switzerland

Apart from limited sector-specific regulations, there is currently no general FDI regime in Switzerland. An FDI Act is expected to come into force in 2026 at the earliest.

Switzerland

Türkiye

Strengthening Türkiye's position as a key investment hub remains a government priority.

Turkiye

United Arab Emirates

Foreign direct investment is permissible in the UAE, subject to applicable licensing and ownership conditions.

UAE

United Kingdom

FDI in the UK is covered by the National Security and Investment Act 2021, and in 2024 the government continued to update information and guidelines concerning the legislation.

UK

Asia-Pacific

Australia

Australia's FDI regimes underwent some modifications in 2024, designed to streamline the process of carrying out investments.

Australia

China

China continues to optimize its foreign investment environment by reducing investment restrictions, opening up market access and lowering investment thresholds into listed companies.

China

India

FDI continues to be an area of focus for the Indian government, which has announced plans to attract further foreign investment into the country.

India

Japan

The Japanese government expands business sectors subject to Japan's FDI regime to secure stable supply chains and mitigate the risk of technology leakage and diversion of commercial technologies into military use.

Japan

Republic of Korea

The Republic of Korea continues to welcome foreign investment, offering enhanced incentive packages and easing regulations while heightening scrutiny over transactions involving strategic industrial.

Korea

New Zealand

New Zealand has recently seen a period of stabilization of the overseas investment regime. However, following the formation of the coalition government at the end of 2023, this government has proposed significant changes to the overseas investment rules for 2025, making it easier for overseas investors to acquire New Zealand assets.

New Zealand

Taiwan

Taiwan continues to promote FDI under a two-track screening mechanism for foreign and PRC investors.

Taiwan
Australia

Foreign direct investment reviews 2025: Australia

Australia's FDI regimes underwent some modifications in 2024, designed to streamline the process of carrying out investments.

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Australia requires a wide variety of proposed investments by foreign investors to be reviewed and approved before completion of the investment. The Treasurer of Australia, advised by the Foreign Investment Review Board (FIRB), determines foreign investment approval or denial based on national interest and security considerations.

Australia's foreign investment policy framework comprises the Foreign Acquisitions and Takeovers Act 1975 (FATA) and its related regulations, the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 (Fees Regime) and its related regulations, Australia's Foreign Investment Policy, and associated guidance notes.

Summary of major changes in 2024

  • In May 2024, Treasury released an update to Australia's Foreign Investment Policy, introducing a key reform for a streamlined system to attract essential investments. To achieve this, the government plans to implement consultation and assessment processes that enable low-risk capital to flow swiftly. This will involve a risk-based approach, considering the identity of the foreign investor, the target of the investment and the structure of the transaction. To support this streamlined process, Treasury adopted a new performance target as of January 1,   2025 to process 50 percent of investment proposals within the 30-day statutory decision period.
  • In 2024, the maximum financial penalties for contraventions of foreign investment provisions relating to residential land were doubled.
  • The changes in 2024 followed changes to reporting requirements for foreign investors introduced on July 1, 2023.

Who files?

A foreign person or entity making an acquisition that requires approval under the FATA must apply to FIRB for a notification that the treasurer has "no objection" to the acquisition before completion of the acquisition. In these circumstances, any agreement to make the acquisition must be conditional upon, and subject to, receipt of FIRB approval by the acquirer.

An application includes a filing fee that varies according to the type and value of the action being taken, the consideration payable and whether special fee rules apply. Fees for foreign investment applications cannot exceed a certain amount—the maximum fee. The amount of the maximum fee depends on the kind of application.

Types of deals reviewed

FIRB approval is required for various acquisitions by foreign persons.

These include: "substantial interest," or the acquisition of a 20 percent or more direct or indirect interest in an Australian entity or business valued at more than AUD 339 million (US$212.5 million); and "direct interest," covering the acquisition of a 10 percent or more direct interest in an Australian national security business or media business, irrespective of monetary value. National security businesses include those relating to critical infrastructure assets, telecommunications, defense or national intelligence communities. Starting a national security business also requires prior approval, irrespective of monetary value.

Approval is required to acquire an interest in national security land, such as defense premises or land in which a national intelligence community has an interest. Acquisitions of this type have no monetary threshold.

The regulations also cover diverse acquisitions of interests in Australian land, and mining and production tenements subject to varying monetary thresholds. This includes agricultural, residential, vacant and developed commercial land, and entities with 50 percent or more of their total asset value attributable to Australian land interests.

Types of investors also receive differing treatment, subject to their nationality or jurisdiction of incorporation. Each foreign investor should consider the applicable monetary threshold and other provisions relevant to it, with respect to a proposed acquisition.

Investors from specific countries benefit from higher monetary thresholds based on free trade agreements. However, the direct acquiring entity will also need to be from the relevant country for the higher thresholds to apply.

Generally, with respect to acquisitions of securities in an Australian entity, mandatory FIRB approval is only required where the monetary threshold exceeds AUD 1.464 billion, except for national security, media businesses or sensitive businesses, where the acquirer is a foreign government investor. In these situations, the monetary threshold is nil.

Stricter rules apply to "foreign government investors," which can include domestic or offshore entities where a foreign government and its associates hold a direct or upstream interest of 20 percent or more, or foreign governments of more than one foreign country and their associates hold an aggregate interest of 40 percent or more. In general, unless an exemption applies, a foreign government investor must obtain FIRB approval before acquiring a "direct interest"—generally defined as at least 10 percent holding or the ability to influence, participate in or control—in any Australian asset or entity; starting a new business; or acquiring mining, production or exploration interests.

Scope of the review

The Treasurer may prohibit an investment if he or she believes it would be contrary to the national interest or national security, and if approving the investment may impose conditions on an approval to safeguard the national interest or national security.

In making this decision, while the concept of "national interest" is not defined in the legislation, the Treasurer will broadly consider the impact on national security, taking into account the extent to which investments affect the Australian economy, competition or government policies.

These considerations include the impact of any plans to restructure an Australian enterprise following an acquisition; the nature of the funding of the acquisition and the level of Australian participation in the enterprise after the foreign investment occurs, as well as the interests of employees, creditors and other stakeholders; and the extent to which the investor will develop the project and ensure a fair return for the Australian people. Consideration is also given to the character of the investor, including the extent to which the investor operates on a transparent commercial basis, and is subject to adequate and transparent regulation and supervision.

The Treasurer will also consider whether a proposed investment may result in an investor gaining control over market pricing and production of a good or service in Australia, and the effects of other Australian government laws and policies (including tax, environmental and critical technology laws) and objectives. and the impact of the investment on Australian tax revenues.

The decision as to what is contrary to the national interest or national security is at the sole discretion of the Treasurer.

The "national security test" requires the Treasurer to assess a given investment from a national security perspective, and whether the investment will affect Australia's ability to protect its strategic and security interests.

In making this assessment, the Treasurer relies on advice from the relevant national security agencies for assessments as to whether an investment raises national security issues—for example through foreign intrusion or espionage. This test is generally applied in circumstances where an investment involves a "national security business," "national security land" or falls within one of the sectors of interest for the Treasurer.

Review process timeline

Under the Act, the Treasurer has 30 days to consider an application and make a decision. However, in practice, the assessment process is in many cases extended and takes longer: typically eight to 12 weeks from the time of application to the receipt of a "no objections" notification. The holiday period and federal government election periods usually impact these timeframes for decisions.

The timeframe for making a decision will not start until the correct application fee has been paid in full. If the Treasurer requests further information from the investor, the review period will be on hold until the request has been satisfied.

Typically, if FIRB requires further time, it will request that the applicant voluntarily extend the approval deadline. As the Treasurer is also entitled to unilaterally impose a 90-day extension under the statute, applicants are generally incentivized to "voluntarily" request the proposed deadline extensions and, such that in reality, the review process will take approximately eight to 12 weeks.

How foreign investors can protect themselves

Foreign persons should file an application in advance of any transaction that requires FIRB approval, and any transaction requiring mandatory FIRB approval must be conditioned on receipt of FIRB approval. Foreign investors should obtain appropriate advice at an early stage of the transaction with respect to the application of the Act whenever a transaction directly or indirectly involves the acquisition of Australian assets. A transaction requiring mandatory FIRB approval should not proceed to completion until the Treasurer advises on the outcome of his or her review.

Particularly for applications related to sensitive or national security businesses (those with a nexus to the Australian defense force, public infrastructure, sensitive data, energy, ports, water, telecommunications, banking or media sectors), the Australian government encourages engagement with FIRB before filing applications for significant investments.

These early discussions serve as a valuable forum for foreign investors to gain insights into the intricacies of their application, discern any national interest concerns the government may have, and understand the potential conditions the Treasurer might impose upon approval. Such an understanding may result in foreign investors being able to structure transactions differently to mitigate adverse FIRB outcomes. Proactive and early engagement is also crucial in competitive bid scenarios to avoid situations where other bidders have already obtained FIRB approval.

Foreign investors also need to be aware of the sensitivity surrounding investment structures, profit shifting and the payment of Australian tax. Collaboration with tax advisors at the outset ensures that investment structures align with the parameters acceptable to the ATO, a critical consideration given the ATO's involvement in all approval processes and the increasing imposition of tax conditions on approvals.

Transparency in disclosing upstream ownership details of the acquiring entity is also beneficial, including meeting the FIRB requirement to identify and disclose direct and indirect, legal and beneficial holders of a 5 percent or more interest in the acquiring entity, in order to streamline the review process as well as mitigate unwarranted scrutiny by FIRB.

Looking ahead: Likely developments in the next year

On May 1, 2024, the Treasurer announced major reforms to the FIRB framework aimed at making it stronger, streamlined and more transparent. The proposals include a streamlined assessment process for lower-risk foreign investment applications, with a new performance target effective  January 1, 2025, to process 50 percent of investment applications within the 30-day statutory decision period.

Low-risk sectors identified include manufacturing, professional services, commercial real estate, new housing and mining of non-critical minerals. Sensitive sectors, which will be subject to greater scrutiny, include critical infrastructure, critical minerals, critical technology, investments near sensitive Australian government facilities, and investments involving access to sensitive data sets.

To implement the reforms and further streamline the application process, the Foreign Investment Digital Transformation Program is set to launch in 2025, meaning all applications to FIRB will be submitted electronically and in a standardized way. This initiative aims to modernize and enhance the submission, assessment and management of applications.

White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.

This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.

© 2025 White & Case LLP

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