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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
Luxembourg

Foreign direct investment reviews 2025: Luxembourg

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

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On July 14, 2023, Luxembourg adopted a new law introducing a screening mechanism for FDIs that may affect security or public order, implementing the EU Regulation on FDI Screening. The FDI Law entered into force on September 1, 2023, and it was the first time in Luxembourg that a national screening mechanism was put in place for FDI. 

Summary of major changes in 2024

Following the entry into force of the FDI Law during the third quarter of 2023, the very first notification filings were made, resulting in the first review processes with the Luxembourg Ministry of Economy, which is the competent authority for reviewing FDI filings.

Who files?

Foreign investors are required to make a notification to the Luxembourg Ministry of Economy prior to making an FDI in Luxembourg.

A foreign investor is defined as an individual or a legal entity who is not a national of either an EU Member State or a state party to the agreement on the EEA.

Types of deals reviewed

The screening mechanism applies to FDIs made by foreign investors.

An FDI is an investment of any kind made by a foreign investor that aims at creating or maintaining long-term and direct relationships between the foreign investor and the Luxembourg target entity, thus allowing the foreign investor to effectively participate—alone, in concert or through interposition—in the control of the entity carrying out a critical activity in Luxembourg.

The notification requirement applies to FDIs, other than portfolio investments, which are likely to be detrimental to security or public order, in an entity incorporated under Luxembourg law carrying out "critical activities" in Luxembourg.

The following activities are deemed critical: dual-use goods; energy; transport; water; healthcare; telecommunications; data processing storage; aerospace; defense; finance; media; and agrifood.
Research and production activities directly connected to the above, ancillary activities that may grant access to sensitive information directly connected to the above, or access to places where the activities listed above are carried out are also deemed critical.

The FDI Law does not provide for a minimum investment threshold, meaning that all investments irrespective of their size may be subject to screening.

Scope of the review

The foreign investor must notify the ministry of: the ownership structure of the foreign investor; the approximate value of the FDI; the operations of the foreign investor and the Luxembourg entity; the countries in which the foreign investor and the Luxembourg entity conduct business; the financing of the FDI and its source; and the date on which the FDI is planned or has been made.

The ministry will then decide whether a screening is required. The decision to proceed with a screening is notified to the foreign investor within two months.

If the ministry decides to proceed with a screening, the following factors will be considered: the integrity, security and continuity of supply of critical infrastructures, whether physical or virtual, linked to a critical activity; the sustainability of activities related to critical technologies and dual-use goods; supply of essential inputs, including raw materials and food safety; access to sensitive information, including personal data, or the ability to control such information; and freedom and pluralism of the media.

The following factors may also be taken into account: if the foreign investor is directly or indirectly controlled by the government of a third country; if the foreign investor has already been involved in activities that undermine security or public order in a Member State; and if there is a serious risk that the foreign investor is engaged in illegal or criminal activities.

The FDI cannot be made before a screening decision authorizing the investment is taken by the ministry.

Review process timeline

As a matter of principle, the review process must not exceed two months from its submission; and in case of initiation of the screening, the process must not exceed 60 calendar days. The ministry may request additional information throughout the screening procedure, which will be suspended until that additional information is provided.

Following the screening process, the ministry will notify its decision to the foreign investor. If the FDI is authorized, such authorization may be subject to conditions set by the ministry.

Ministry decisions regarding FDIs may be appealed to the Administrative Court. The appeal must be lodged within one month of the date of notification of the decision, after which it will be time-barred.

How foreign investors can protect themselves

Foreign investors must carefully assess in advance whether or not the FDI is likely to be subject to the Luxembourg screening mechanism. Accordingly, at an early stage of the contemplated transaction, it is critical to adjust appropriately the transaction documentation and timing for completion, as well as to be assisted by local counsels in the notification process with the Luxembourg Ministry of the Economy.

Investors may also try to restructure their investments so that they qualify for the portfolio investment exemption. According to the FDI Law, a portfolio investment is an acquisition of securities made with the intention of completing a financial investment that does not enable the foreign investor to exercise, directly or indirectly, control of the entity governed by Luxembourg law. Thus, investing in an investment fund managed by an asset manager alongside other investors should exempt investors from the requirements under the FDI Law.

Alternatively, the foreign investor may seek to ensure that it will not control the relevant entity, as control is one of the triggers for FDI notification.

Looking ahead: Likely developments in the next year

The coming year will be helpful to further observe the regulatory practice of the Ministry of Economy regarding FDIs. So far, it has been noted that some market players have applied prudent interpretations of activities falling within the scope of so-called "critical activities" under the FDI Law.

Further clarifications from the Ministry of Economy would be welcome to better delineate the scope of activities considered as critical, notably as regards the activities in the financial sector.

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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