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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
United Kingdom

Foreign direct investment reviews 2025: 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.

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The National Security and Investment Act 2021 (NSIA) became operational on January 4, 2022 and has since become a regular feature of FDI transactions. Certain transactions in 17 sectors are subject to mandatory notification if a target carries on specified activities in that area, but the regime can apply to any transaction, so voluntary filings are also made if an acquirer would like absolute certainty that a transaction will not be retrospectively reviewed. The regime is administered by the Investment Security Unit (ISU), in the Cabinet Office, exercising final decision-making powers.

Unusually, the NSIA is not a true "foreign" direct investment screening mechanism, as it applies equally to UK and foreign investors alike. Indeed, the first conditional decision issued under the NSIA in July 2022 imposed conditions on UK-based investor Epiris in the context of its acquisition of the digital communications provider that supplies radio solutions to UK emergency services, Sepura.

Summary of major changes in 2024

  • The Cabinet Office published updated market guidance in May 2024, which explicitly stated that NSIA can apply to outward direct investment and suggests a potential for further scrutiny in situations where a foreign entity or asset being acquired "carries on activities in the UK."
  • The government also published a revised NSIA "Section 3 Statement" in May, providing further guidance on how the ISU's power to review and require notification of certain transactions—"call-in powers" —are exercised and the factors taken into account, as well as clarifications on how the Cabinet Office considers cumulative acquisitions and confirming that call-in powers may be exercised more frequently for acquisitions of assets used in connection with activities within the 17 sensitive sectors.
  • The government published its first report on the performance of the NSIA (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021 (NARs), which set out the activities within the 17 sensitive sectors, which may bring an entity into scope of mandatory notification.

Who files?

Mandatory notifications are filed by the investor. Voluntary notifications, however, can be filed by any party, including the investor, the seller or the target itself.

Types of deals reviewed

Very little information about NSIA notifications is published. The very fact that a filing has been made is not made public, and only if a transaction is blocked or subject to conditions, will a final order with minimal detail be published. Transactions that are cleared are not publicized, with the total number of notifications only made public in NSIA annual reports.

It is therefore generally not possible to identify if a particular transaction was notified because if it was cleared, no information will be published other than by the merging parties themselves, for example, if they had announced that the deal was subject to NSIA clearance.

There have been six prohibitions since the inception of the regime. Although the regime is technically agnostic as to an investor's origin—requiring notifications even of British acquirers—of the six prohibitions, five concerned investors were from China or Hong Kong.

Two of these prohibitions ordered the unwinding of transactions that had already been concluded before the mandatory filing requirements under the NSIA came into force. This power is a feature of the NSIA, which allows the UK government to "call in" any transaction concluded from November 12, 2020. This retroactive power to call in a transaction for review ordinarily applies for up to five years from the date of the transaction, although this can be reduced to six months if the Secretary of State becomes aware of the transaction, for example, through a voluntary notification.

Conditions have been imposed on 24 transactions since the regime began; of these, 12 were imposed in 2024 alone.

In terms of the sensitive sectors subject to conditional decisions, defense and military and dual-use transactions are the most prominent. This is no doubt a function of the particular sensitivities of those sectors, but also the breadth of deals captured with defense, in particular, capturing a wide range of targets, including those with incidental access to military sites via cleaning or catering contracts, for example.

Conditions vary by sector but focused on behavioral rather than structural commitments. These have included: requirements to implement enhanced security controls to protect sensitive information and technology from unauthorized access; requirements that certain key personnel or board members are pre-approved by UK government authorities; restrictions on the sharing of certain target information, including with the investor; and commitments to maintain certain business activities in the UK.

Again, Chinese investors feature prominently in relation to conditional clearances. However, conditions have also been imposed in transactions with UAE, UK, US and European investors.

Scope of the review

The scope of the review under the NSIA is three-pronged.

The ISU assesses "control risk"—the level of control that will be asserted by the prospective investor. Less control merits less concern from a national security perspective, particularly where an investor is seeking to take a non-controlling stake. A mandatory filing can be triggered with a 25 percent equity or voting stake, so the level of the investment will affect the determination of the control risk as will any rights attached to minority shareholdings.

The ISU also examines "target risk"—the extent to which the target is being used, or could be used, in a way that raises a risk to UK national security. This may involve considerations such as proximity to sensitive sites as well as the specific nature of the target's activities. Ultimately, however, any target falling within the defined sensitive sectors will raise target risk considerations. Where targets fall within multiple sensitive sectors, this risk may be considered enhanced.

Finally, "acquirer risk" is assessed. This entails a review of the acquirer including the ultimate controller. Specifically, the acquirer risk assessment will consider whether the acquirer "has characteristics that suggest there is, or may be, a risk to national security from the acquirer having control of the target." These characteristics include associations with states or organizations that may be considered hostile to the UK, although this concept is undefined. Helpfully, previous guidance has made clear that a history of passive or long-term investments may indicate low or no acquirer risk.

Review process timeline

The timeline under the NSIA runs from the date that the notifying party receives confirmation that the notification is accepted as complete. Best practice guidance stipulates that the ISU will seek to do this within five working days, but, in practice, protracted delays are becoming increasingly common.

Once this confirmation is received, the review process is divided into two parts: a 30-working-day review period that applies to all notified transactions; and a 30-working-day assessment period, which applies to any transactions that are subject to a "call-in notice," indicating that they will be subject to more detailed scrutiny. This can be extended by another 45 working days if required. Any further extensions beyond this time period require the investor's written consent.

How foreign investors can protect themselves

It is, of course, crucial to understand whether or not a transaction requires a mandatory notification. However, given the ability of the government to call in any transaction, it is sensible for acquirers to assess the risks associated with any transaction if the target's activities may in any way be considered sensitive. As this analysis is all target-focused, engaging due diligence of prospective targets early on for these purposes is very important and will depend to a large extent on good engagement with the seller. Where the target is hostile, then the ability for the acquirer to assess the NSIA risks is much harder.

So far, the focus in terms of probing transactions, and imposing conditions, has been on information ring-fencing and securing continuity of supply to critical services in the UK. Therefore, it is important to have a clear narrative in place around the control, information-sharing and intentions that an investor has for a sensitive target in the UK.

In terms of transaction certainty, investors may want to consider judicious use of the voluntary notification option. For example, while mandatory notifications are only required with respect to share sales, asset deals that would otherwise trigger if structured as a share deal would be good candidates for voluntary pre-clearance. This also eliminates the prospect of a retrospective call-in after the transaction has closed.

For transactions that are subject to call-in review, it is notable that often there will be limited, if any, engagement with the ISU. The ISU has the power to issue information and attendance notices but will not necessarily do so. Nonetheless, an investor always has the option to submit further information for the Secretary of State's attention that must be taken into account in their decision under the provisions of the NSIA, and selective use of this option can help to allay potential concerns.

It is also important to keep in mind, however, that the vast majority of transactions will be cleared without a "call-in" review. In 2023, of the 847 reviewed by the ISU, less than 5 percent (37) of notified acquisitions were called in.

Looking ahead: Likely developments in the next year

It is expected that the UK government will launch a consultation in 2025 on updating the 17 mandatory sectors. This was originally scheduled for summer 2024, but was disrupted by the general election. The chief candidates for that update include the expansion of the semiconductor category and further headings for critical minerals and water.

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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