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.
Strengthening Türkiye's position as a key investment hub remains a government priority.
Explore Trendscape Our take on the interconnected global trends that are shaping the business climate for our clients.
Sezin Elçin (CoPartners, Managing Partner, Istanbul) and İlayda Akça (CoPartners, Associate, Istanbul) contributed to the development of this publication
The Turkish FDI regime is mainly regulated under the Turkish FDI Law published in 2003, and the Turkish FDI Regulation, which provides that foreign and Turkish investors should be treated equally. Moreover, the Turkish government has been carrying out investment incentive programs to maintain domestic economic stability. For the period 2024 – 2028, a comprehensive foreign direct investment strategy program was published by the Presidency Investment Office of the Republic of Türkiye, aiming to increase Türkiye's FDI share in the global FDI market.
The FDI regime is based on a post-closing notification procedure, rather than a prior approval/review procedure. There is no suspension requirement. In this context, foreign-capitalized companies, or companies that become foreign-capitalized as a result of the transaction, are responsible for filing the notifications.
FDI companies are obliged to make certain notifications to the ministry's General Directorate of Incentive Practices and Foreign Capital through an online system named E-TUYS. Foreign-capitalized companies may also designate the authorized signatories to submit any required notification via E-TUYS.
Under the Turkish FDI regime, FDI is defined as importing cash capital, company securities (excluding state securities), machinery and equipment, and industrial and intellectual property rights to Türkiye from abroad; setting up a new company or branch; joining the shareholding of a company by way of acquiring shares outside securities exchanges, or at least 10 percent shareholding or voting rights at the same amount from securities exchanged through economic assets by foreign investors.
FDI in Türkiye is not restricted, and foreign investments are treated in the same way as their local counterparts under the relevant legislation. Indeed, the FDI Law sets out that foreign investors are allowed to make investments in Türkiye unless otherwise stipulated in specific laws or international treaties. On the other hand, there are various sectors, with exceptions, which either entail specific restrictions on foreign shareholdings or require the grant of permissions for investments in the relevant sectors.
The Civil Aviation Act No. 2920 requires written agreements to be concluded for the acquisitions of Turkish civil aircraft, and subsequently such agreements should be notified to the aviation registry held within the Ministry of Transport and Infrastructure. In addition, the legislation also requires the majority shareholders of Turkish aircraft operators to be Turkish, and stipulates that an aircraft is deemed a Turkish aircraft only if it is owned by a Turkish citizen. If it is owned by the companies and cooperatives registered in the Turkish Trade Registry, it is regarded as a Turkish aircraft only if the majority of the individuals authorized to manage and represent the company are Turkish citizens and if the majority of the votes are held by Turkish partners.
The Radio and Television Broadcasting Law No. 6112 also sets out specific requirements for the establishment and share ratios of private media service providers. Accordingly, the total foreign share capital of a media service provider cannot exceed 50 percent of registered capital. Besides, foreign persons are not allowed to be the direct shareholders of more than two media service providers, nor allowed to possess any privileged shares.
The Land Registry Law No. 2644 stipulates that foreigners can acquire real estate or limited property rights in Türkiye subject to certain conditions. In particular, the total area of such real estate or property rights acquired cannot exceed 10 percent of the total surface area of the district subject to private ownership and 30 hectares per person across the country. Further requirements are also envisaged for purchasing real estate in military forbidden zones, military security zones or strategic zones. Specific notification procedures are set forth in the legislation requiring the Ministry of Trade to be informed of the relevant acquisition.
The Cabotage Law specifies geographical restrictions, under which deriving commercial benefits from seas and lakes is a right granted exclusively to Turkish citizens.
The Mining Law, Environmental Law and Tourism Incentive Law also set out specific regimes and require approval procedures in certain cases for FDI in Türkiye. Therefore, it is crucial for foreign investors to identify the sectors they are investing in and comply with the specific requirements in the relevant legislation.
FDI companies submit any required notification to the Ministry of Industry and Technology's General Directorate of Incentive Practices and Foreign Capital through the E-TUYS online system; however, these notifications do not require an approval from the relevant ministry. In other words, mere notification is sufficient. To that end, pursuant to article 6 of the FDI Regulation, approval is only required for companies establishing a liaison office in Türkiye.
Changes to the capital and shareholding structure of FDI companies must be notified within one month. FDI companies must also submit annual notifications by filling out a standard form requiring general information pertaining to the FDI company, including its trading name, address, tax identification number, and brief information regarding its subsidiaries and shareholding structure.
Separately, certain sector-specific legislation also includes provisions related to FDI, and this legislation may require further approvals from relevant authorities such as the Ministry of Environment, Urbanization and Climate Change, Energy Market Regulation Authority, Ministry of Treasury and Finance, and Banking Regulation and Supervision Agency for investments into these regulated sectors.
The FDI rules in Türkiye apply to transactions that will result in a change in the direct shareholding of a Turkish company. If the transaction will not result in a direct change in the shareholding structure of the Turkish subsidiary, the transaction will not be subject to any filing or notification obligations within the scope of the FDI rules in Türkiye. If the investment is considered a merger or acquisition, or an establishment of joint venture under Turkish merger control rules, this transaction is also subject to a mandatory filing with the Turkish Competition Authority.
There is generally no time limit stipulated for review processes under the Turkish FDI regime. The duration of the review process would depend on the specific factual matrix in question. There is no general requirement for pre-filing or initial review. For liaison offices, under article 6 of the FDI Regulation, the application is reviewed within 15 business days after submission of all requested information and documents.
The Turkish FDI regime is based on the concept of freedom to invest. Article 3 of the FDI Law provides that foreign investors can invest in Türkiye directly and they must be treated equally to local investors.
Having said that, certain sectors have specific regimes because of additional concerns in relation to public security and public interest. To that end, foreign investors should take into account whether the envisaged transaction triggers additional FDI requirements and filings under sector-specific legislation.
For cases involving potential mergers, acquisitions or joint ventures, it is also important to conduct an assessment as to whether the envisaged transaction is subject to the mandatory notification to the Turkish Competition Authority. Foreign investors should bear in mind that failure to comply with the notification requirement might lead to an administrative monetary fine amounting to 0.1 percent of turnover generated during the financial year preceding the decision date.
Building upon last year's trajectory, Türkiye continues to enhance its investment environment through regulatory refinements and digital transformation initiatives. The recently announced Türkiye International Direct Investment Strategy (2024 – 2028) signals a more structured and targeted approach to FDI, with an emphasis on aligning with global best practices and strengthening investor confidence.
In this regard, legislative amendments concerning investment facilitation and sector-specific incentives are expected to materialize. Additionally, further developments in investment zone allocations, streamlined approval processes, and infrastructure support mechanisms will likely play a crucial role in shaping the investment climate.
Furthermore, considering the evolving global investment landscape, Türkiye may take additional steps to align its FDI framework with the European Commission's regulatory approach, particularly in areas such as screening mechanisms, sustainability-linked investment incentives, and digital economy integration.
Overall, Türkiye's investment strategy for the coming year is expected to focus on reinforcing legal assurances, modernizing the investment framework, and fostering a more competitive and investor-friendly environment.
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