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.
Ireland’s Screening of Third Country Transactions Act entered into force on January 6, 2025.
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In 2025, Ireland joined the club of countries with a newly minted FDI regime with the coming into force of the Screening of Third Country Transactions Act 2023 on January 6, 2025. The regime introduces a mandatory and suspensory regime in Ireland for the first time.
The Act will be limited to transactions involving investors from third countries—those from outside the EU, EEA and Switzerland, including the UK and US.
A mandatory notification is triggered by a third-country investor where the transaction involves a change of control. This is the EU standard of control: the ability to exercise decisive influence over a target. This will automatically be deemed met where the investor’s stake crosses 25 or 50 percent.
Investor origin is assessed by reference to the ultimate controller, although an acquisition through a vehicle registered or otherwise based in a third country can trigger a mandatory notification, even if ultimately controlled by an EU, EEA or Swiss owner.
Mandatory notifications are also required when the global value of the transaction is at least €2 million, including all transactions between the parties in the previous 12 months.
The regime exempts internal restructuring from mandatory notification, where the ultimate controllers remain unchanged.
The scope of the sensitive activities that will be subject to review is drawn from the EU FDI Screening Regulation and encompasses: critical infrastructure; critical technologies and dual-use items; supply of critical inputs (including energy, raw materials and food security); access to sensitive information; and the freedom and plurality of the media.
Further detail on the scope of these sectors, including examples of the types of activity that may be within scope has been published in guidance issued by the Department of Enterprise, Trade and Employment.
The purpose of a screening review is to identify whether a transaction poses a threat to the security of public order.
As well as assessing notified transactions, the Minister for Enterprise, Trade and Employment, the decision-maker under the Act, has a “call-in power” to review unnotified deals, where there are reasonable grounds for believing that a transaction negatively impacts security or public order.
This power exists for 15 months from the date of completion for non-notifiable transactions. The Act also allows the minister to examine transactions that have been completed 15 months prior to its commencement, or from October 6, 2024 onwards.
For transactions that are notifiable, that call-in power exists for up to five years from completion, or six months of the date on which the minister becomes aware of the transaction.
Once a notification is submitted, the minister will decide whether the notified deal is within the scope of the Act. That decision is to be taken “as soon as reasonably practicable.” If the minister does indeed deem the transaction within scope, a Screening Notice will be issued.
Decisions must be issued within 90 days of that Screening Notice, whether issued with respect to a notified or called-in transaction. There is some scope for an extension to 135 days at the minister’s discretion in more complex cases.
Similar to other regimes across the continent, the minister may issue a notice of information during the review process, which suspends the review timetable.
The Act is in its infancy, but a report on its operation will be laid before the Houses of the Oireachtas within the next 15 months and annually thereafter. This will include details on the aggregate number of transactions reviewed (both notified and unnotified), actions taken by the minister with respect to those reviewed transactions, and information on sectoral trends and the third countries involved in transactions reviewed under the legislation.
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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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