Foreign Direct Investment Regimes in the EU

• Overview
• EU FDI Regulation
• National regimes

Overview

Foreign direct investment (FDI) regimes enable national governments to scrutinise and regulate acquisitions of interests in companies active in certain sectors by investors from a different country.

The number of these regimes has significantly increased in the EU, the UK and elsewhere in the last few years. Regimes have also become broader in terms of scope and tend no longer to solely apply to investments relating to national security and defence. Countries are continuously expanding regimes to include advanced technologies, a broad range of activities relating to critical infrastructure and inputs. The trend for more FDI regulation has been accelerated by the Covid-19 pandemic, with governments concerned that “critical” national companies are becoming more vulnerable to foreign acquisition.

EU FDI Regulation

On 11 October 2020, the EU’s FDI Regulation entered into force. The Regulation does not introduce an EU-level FDI regime, nor does it require EU Member States that do not currently have an FDI regime to introduce one. Crucially, the cooperation mechanism has an impact on timing for transactions that will be subject to national FDI screening. The European Commission is currently reviewing the FDI Regulation.

> Read our note on the EU FDI Regulation here

National regimes

Our expertise in key EU jurisdictions means we are well-placed to advise on the intricacies of the national regimes in the UK, France, Germany, Italy, Luxembourg and the Netherlands and the impact on your business.