Canada
The Canadian government continues to scrutinize foreign investments by state-owned enterprises and state-linked private investors, especially if from "non-likeminded" countries.
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.
The Canadian government continues to scrutinize foreign investments by state-owned enterprises and state-linked private investors, especially if from "non-likeminded" countries.
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.
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.
The European Commission continues to be a driver of FDI screening across the EU, with Member States now moving toward coordinated enforcement.
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.
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.
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.
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.
The scope of the Danish FDI regime is comprehensive, and requires a careful assessment of investments and agreements involving Danish companies.
Estonia's FDI screening mechanism closed its first effective year in 2024.
FDI deals are generally not blocked in Finland, but the government is able to monitor and, if necessary, restrict foreign investment.
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.
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.
Hungarian FDI regulation stands as a rock amid global economic storms, although there were few major changes in 2024.
Ireland's Screening of Third Country Transactions Act entered into force on January 6, 2025.
Italy's "Golden Power Law" review more tan ten years old and continuously expanding its reach.
The law in Latvia provides for sectoral FDI regimes for specific corporate M&A, real estate dealings and gambling companies.
All investments concerning national security are under the scope of review in Lithuania.
The Luxembourg FDI screening regime is now a year old, and the first notification filings have been made.
Malta's FDI regime regulates specific transactions that must be notified to the authorities and may potentially be subject to screening.
The Middle East continues to welcome foreign investment, subject to licensing approvals and ownership thresholds for certain business sectors or in certain geographical zones.
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.
Norway's foreign direct investment regime is in the process of being expanded, with more profound changes expected in the future.
After revision of the Polish FDI regime in 2024, the way the authorities are assessing transactions is evolving.
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.
While far-reaching in its scope, compared to other EU countries, the Romanian FDI regime is generally perceived as investor-friendly.
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.
After two years of foreign investment regulation in Slovakia, a supportive climate for foreign investments remains.
Slovenia's updated FDI regime now extends to branch offices and introduces new challenges for foreign investors navigating critical sectors.
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.
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.
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.
Strengthening Türkiye's position as a key investment hub remains a government priority.
Foreign direct investment is permissible in the UAE, subject to applicable licensing and ownership conditions.
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.
Australia's FDI regimes underwent some modifications in 2024, designed to streamline the process of carrying out investments.
China continues to optimize its foreign investment environment by reducing investment restrictions, opening up market access and lowering investment thresholds into listed companies.
FDI continues to be an area of focus for the Indian government, which has announced plans to attract further foreign investment into the country.
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.
The Republic of Korea continues to welcome foreign investment, offering enhanced incentive packages and easing regulations while heightening scrutiny over transactions involving strategic industrial.
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.
Taiwan continues to promote FDI under a two-track screening mechanism for foreign and PRC investors.
FDI deals are generally not blocked in Finland, but the government is able to monitor and, if necessary, restrict foreign investment.
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The Finnish Monitoring Act enables the government to monitor foreign investment, and to restrict it where necessary in light of national interests. Monitoring is focused on the defense and security sectors. Deals may also be covered by the Monitoring Act if the target can be considered critical for securing vital functions of society.
There have been no major changes to Finland's FDI rules in 2024.
The notification is made by a "foreign owner" gaining control of at least one-tenth, one-third or one-half of the aggregate number of votes in a Finnish company or equivalent actual decision-making power. The Finnish Ministry of Economic Affairs and Employment may also request a foreign investor to submit a notification in relation to a measure that increases the foreign investor's influence but does not exceed the threshold mentioned above.
Foreign owners comprise foreign individuals without residence in EU or EFTA member states, and foreign organizations and foundations without domicile in these regions. In the defense sector, all non-Finnish investors are considered foreign.
The notification must be made by the potential foreign owner, and not, for example, by a Finnish holding company set up by the potential foreign owner.
All acquisitions concerning the defense sector—including dual-use—require advance approval by the ministry. Advance approval is also required for acquisitions of companies operating in the security sector—companies that provide products or services that are deemed vital for national security.
Where the target is not active in the defense or security sectors, but may be considered "critical for securing vital functions of society," notification to the ministry is not mandatory; but foreign investors are encouraged to make a notification prior to closing.
The definition of "companies considered critical for securing vital functions of society" is intentionally broad and at the discretion of the ministry. The definition evolves over time depending, for example, on the prevailing security environment.
The ministry will approve a transaction unless it would endanger a key national interest. If the ministry finds that the transaction may endanger a key national interest, it transfers the matter to the government's plenary session for resolution. The government's plenary session then decides whether or not to approve the deal, depending on whether it believes the deal poses a threat to the national interest. The vast majority of notifications to date have been approved.
The ministry may also approve a transaction subject to conditions and, where necessary, enforce compliance through fines. If the Monitoring Act is breached, the transaction can be declared null and void.
Conditions are imposed only in specific situations as necessary mitigation measures to address critical security concerns. The conditions could exclude certain business functions or shares from the acquisition, or ensure continuity of services under related production and supply agreements.
The review process starts when a foreign investor submits a notification to the ministry.
After receipt of the notification, the ministry asks for input from other relevant Finnish authorities. If deemed necessary, the ministry may disclose confidential documents and information to these authorities.
All notifications are processed promptly, in order of receipt. In practice, the duration of the review depends on the caseload of the ministry and other authorities taking part in the review process.
There is no formal deadline for reviews in the defense and security sectors. According to the ministry, the average processing time in 2023 was approximately 65 days.
For acquisitions in other sectors, a transaction is deemed to have been approved if the ministry does not make a decision to open a review within six weeks of notification, or if the notification has not been transferred to the government's plenary session within three months dating from the day when the ministry deems it has received all relevant information from the applicant.
Informal pre-notification discussions with the ministry are typical and encouraged.
Foreign investors should consider the potential timing implications of a review even when no substantive issues are expected to arise.
Evaluation and reform of the Finnish FDI regime was included in the government program set out by prime minister Petteri Orpo in 2023. In January 2025, the ministry published a memorandum of required changes, including mandatory screening for all transactions in specific sectors, and extending the screening to greenfield projects and to acquisition by EU and EFTA investors in the security sector.
A government proposal on the reform is expected in 2026.
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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.
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