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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
India

Foreign direct investment reviews 2025: 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.

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FDI in India is regulated primarily by India's Department of Promotion of Industry and International Trade (DPIIT) under its Foreign Exchange Management Act (FEMA) regime. India remains one of the most popular FDI destinations in the world. In 2024, India achieved the milestone of having received US$1 trillion in cumulative foreign investment since April 2000. Attracting FDI inflows continues to be a priority for the Indian government, which has introduced plans to attract further foreign investment into the country.

Summary of major changes in 2024 – 2025

  • Starting from October 2024, there were media reports of plans by the Indian government to expand measures to boost strategic foreign investment  
  • In February 2025, India has proposed new regulations allowing up to 100 percent foreign direct investment into its insurance sector
  • The Indian finance minister also proposed a high-powered committee to review current hurdles and challenges to ease of doing business in India.  It is expected that India may push out further deregulation policies aimed in part at attracting foreign investment

Who files?

There are two routes governing FDI into India: the automatic route and the government approval route. Whether an investor proceeds via one route or the other would depend largely on the sector in which the investee entity falls, as well as the quantum value of the investment.

Under the automatic route, FDI is allowed without the need to obtain any approval or license from the government. The amount of investment permitted would depend on the sector that the investee entity operates in. For example, some sectors, such as the manufacturing, telecom and financial services sectors, allow foreign investors to invest up to 100 percent of an Indian entity.

Certain other sectors fall under the government approval route, and require the prior approval of the government, the Reserve Bank of India (RBI), or both. Key sectors that require government approval include the multi-brand retail trading sector, where FDI of up to 51 percent is permissible assuming certain regulatory conditions are met; and the brownfield pharmaceutical sector, where any FDI above 74 percent must obtain government approval.

Some sectors, such as lottery businesses and the manufacture of tobacco or tobacco substitutes, are prohibited sectors where FDI is not permitted.

Governmental approval is also required where an investor is incorporated in any country sharing a land border with India (China, Afghanistan, Nepal, Myanmar, Bhutan, Pakistan and Bangladesh), or where the beneficial owner of any investment into India is situated in, or is a citizen of, any of these countries.

No application is required for transactions that fall within the automatic route. For transactions that fall under the government approval route, the foreign investor will have to file its FDI proposal under the foreign investment facilitation portal (FPIP) managed by the DPIIT. The proposal will then be sent by the DPIIT to relevant stakeholders, such as the RBI and the Ministry of External Affairs. 

Types of deals reviewed

The FEMA regime governs several types of transactions, such as equity investment into an Indian company by a foreign investor, including the acquisition of equity shares, fully paid and mandatorily convertible preference shares or debentures, and share warrants.

It also governs investment into capital contributions of Indian LLPs and investment into convertible notes, provided that the convertible notes meet certain conditions. For example, the convertible notes can be issued only by start-up companies for an amount of INR 2.5 million (approximately US$30,000) or more in a single tranche, and issuance and transfer of these notes must adhere to pricing guidelines and sectoral conditions as prescribed under the FEMA regime. 

Scope of the review

If a transaction falls under the government approval route, then the foreign investor must submit an FDI proposal to the DPIIT using the FPIP.

Documents that an FDI proposal must annex include: charter documents of the foreign investor and investee entity; audited financial statements and tax returns of both the foreign investor and investee entity; diagrammatic representation of the flow of funds from the foreign investor to the investee entity; and a summary of the FDI proposal by the foreign investor.

Foreign investment into certain sectors may require prior security clearance from the Ministry of Home Affairs. These sectors include broadcasting, telecommunication, private security agencies and civil aviation. For these sectors, the FDI proposal will also be sent to the Ministry of Home Affairs for its review.

The Indian government has broad discretion whether to grant or reject a proposal. The DPIIT and competent authorities would consider, among other things, the reputation of the foreign investor, its history of owning and operating similar investments, national security and the overall impact of the proposed investment on the national interest.

Review process timeline

The DPIIT’s standard operating procedure on FDI applications provides an indicative timeline of eight to 12 weeks from the date of application to the date of approval. However, it is not unheard of for investors to require up to six to nine months for the entire application to be disposed of, including time spent providing clarifications or supplementary documents in response to questions from the DPIIT or any other competent authority.

How foreign investors can protect themselves

The FEMA regime contains extensive guidelines for FDI into India, and guidelines and restrictions may differ depending on the sector and mode of investment. Separate from the FEMA regime, there may also be other considerations that a foreign investor needs to consider before investing into an Indian entity, including special benefits or incentives for setting up businesses in special economic zones and other sectoral regulations for businesses in regulated industries.

Investors should engage counsel who are familiar with the particular federal, state and sectoral landscape that they wish to invest in, and be acquainted early with the particular restrictions or rules that may govern their investments. This allows investors to prepare more comprehensive and compliant FDI proposals and increase the chances of it obtaining the relevant approvals and licenses early.

Looking ahead: Likely developments in the next year

The Indian economy has grown strongly over the past two decades, buoyed in part by the large influx of FDI. However, there has been a slight slowdown in the past year. In January 2025, the Indian government forecasted that its GDP growth for the year 2024 – 2025 would be approximately 6.4 per-cent, which is below the lower end of the government’s initial forecast of 6.5 to 7 percent.

From approx. October 2024 onwards, reports in international media suggested that the Indian government could consider expanded measures to boost strategic foreign investment. This includes expanding rules to allow mezzanine instruments in corporate financing, as well as reduce restrictions in certain strategic industries.

In February 2025, finance minister Nirmala Sitharaman announced that the government would simplify the regulatory conditions governing foreign investment in insurance to attract capital inflows. Essentially, the limit of foreign direct investment in insurance companies would be raised from the current limit of 74 percent to 100 percent.

In the same speech, the minister also proposed a high-powered committee to review current hurdles and challenges to ease of doing business in India. It is expected that India may push out further deregulation policies aimed in part at attracting foreign investment. Foreign investors should remain updated about the evolving regulatory landscape and take note of how new developments may affect investment potential. 

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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