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.
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.
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The Foreign Investment Act and its regulations constitute the main statutory framework governing FDI in Mexico. In some specific instances, sectorial statutory frameworks or relevant permits, authorizations or concessions complement or supersede the provisions of the FIA.
Under the FIA, FDI is generally allowed without prior authorization from any administrative agency, except with regard to legal entities that are: carrying out restricted investments, as described in article 6 of the FIA; or engaged in capped foreign investments, as provided in articles 8 and 7 of the FIA, or with assets valued in excess of the monetary threshold set forth in FIA's article 9, in an amount in excess of the corresponding cap (capped foreign investments).
Applications for prior authorization are generally submitted by the investor to the CNIE.
Restricted investments entail the acquisition of a stake—in any amount—of the equity of Mexican companies engaged in land passenger and freight transport services within the Mexican territory or development banking.
Pursuant to the FIA, investments in such ventures are limited solely to Mexican nationals. Foreign investors are statutorily precluded from undertaking a restricted investment.
Foreign investors cannot acquire more than a 10 percent capital stake in a Mexican cooperative production company, which is a special low-revenue company dedicated to a certain primary activity—such as fishing, artisanal products or agricultural production—with a preferential tax regime.
Foreign investors cannot acquire more than 49 percent of the capital stock of Mexican legal entities that are engaged in one of the following reserved activities: the manufacture and marketing of explosives, firearms, cartridges, ammunition and fireworks; printing and publication of newspapers for exclusive commercialization within the Mexican territory; ownership of agricultural, livestock and forest lands; fishing in freshwater, inshore and exclusive economic zones; integral port administration; piloting services in ports located within the Mexican territory; freight shipping within Mexican waters; ship, aircraft and rail equipment; fuel and lubricant supply; broadcasting; or air transport services.
The CNIE may still authorize any FDI entailing an acquisition of more than 49 percent of the capital stock of a Mexican legal entity that is engaged in: maneuvering services in ports located within the Mexican territory; freight shipping via coastal and ocean navigation; aerodrome management or operation; education services; legal services; or the construction or operation of railways, as well as railroad transportation services, or which holds assets with a book value that exceeds MXN 26.97 billion (US$1.33 billion).
The CNIE has broad discretion whether to approve or deny an investment request.
Factors that the CNIE may take into account typically include: the investment's potential impact on the workers of the investment target entity; technological contributions to Mexico; the investment's potential contribution to the Mexican economy; and national security concerns.
To obtain authorization from the CNIE, interested foreign investors are required to file a preinvestment control notice before the CNIE, attaching a completed questionnaire issued by the CNIE; the financial and corporate documents of the interested foreign investors; a general description of investment impact in terms of employment, technological contributions and competitiveness increase of the target company; any other synergy that could be derived from the investment; and evidence of payment of filing fees.
Once the pre-investment control notice is duly submitted, the CNIE has 45 business days to authorize the proposed investment. If the CNIE does not issue a decision within that period, the proposed investment will be deemed authorized according to the FIA.
The CNIE can deny an FDI request only for national security purposes. In such a case, the interested foreign investors may file an administrative appellate motion within 15 business days challenging the denial. If the motion is denied, they may file an amparo writ before a court within the following 15 business days challenging both resolutions.
Any FDI in connection with capped investments undertaken without prior authorization from the CNIE will nullify all the legal acts executed to perform the investment. The CNIE can also fine the involved foreign investors up to MXN 565,700.
Foreign investors may acquire a non-limited participation in the capital stake of companies engaged in capped activities without prior authorization if the investment is "neutral"—a preferred non-voting financial investment equity that is not characterized as an FDI under the FIA.
Although the FIA is the law generally applicable to FDI, foreign investments can be further limited or restricted by specific regulations or permits applicable to the target company. In any process involving the analysis of potential FDIs, investors should review the terms and conditions provided in the specific regulatory framework and in the permits, authorizations and/or concessions granted to the target company.
CNIE's policy-based approach to review and request additional information in FDI review processes is expected to continue.
Under this approach, when a transaction is reportable, it is advisable to reach out to the CNIE's officials before the filing to discuss the proposed transaction, and understand what information they would like to see explaining the potential benefits of the transaction to Mexico.
Although this would normally require the submitting of additional information to the CNIE and therefore adds to the amount of formal documentation that needs to be submitted, it can accelerate the clearance process.
Neither the FIA nor its regulations have been amended yet in connection with the late 2023 Memorandum of Understanding signed between Mexican and US authorities in connection with potential enhanced cooperation on national security reviews.
However, US president Donald Trump's foreign policy decisions in the first months of 2025 signal that further cooperation with the Mexican authorities in all matters concerning national security of both countries will potentially increase.
Although specific amendments to the FIA have not crystallized yet, it seems likely that CNIE authorization decisions during the following four years (from 2025) will increasingly consider foreign policy considerations relevant for the incoming US administration. For example, foreign investors from countries targeted by the US authorities in connection with wider trade and geopolitical trends and goals for the Trump administration are more likely to face in-depth reviews and heightened scrutiny by the CNIE.
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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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