Foreign Investment Control In EU Becomes More Stringent

Investing in the EU? Tighter foreign investment control is on its way as the new EU foreign investments control scheme takes shape while national governments adopt and enforce stricter rules.

SUMMARY

Recent EU foreign investment control reforms have demonstrated the impact that foreign investments screening processes can have on the timing and outcome of foreign investment transactions in the relevant key industries. Where national security and public order are at stake, it is becoming increasingly likely that foreign investments into the EU may be limited or prohibited by the national governments.

It is expected that the volume of transactions subject to foreign investment control will further increase, particularly as the relevant national governments are considering lowering the applicable thresholds, therefore opening up minority investments, e.g. acquisitions of 10% of shares in EU businesses, for review, similar to the CFIUS regime in the United States.