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ARTICLE · 02 JANUARY 2019

Foreign Direct Investments In Germany

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Germany significantly lowers threshold to veto deals; FDI screening mechanism at the European level is coming soon.

GermanyGovernment, Public Sector

Germany significantly lowers threshold to veto deals; FDI screening mechanism at the European level is coming soon

1. Legal developments and changes in Germany

On December 19, 2018, the German Goverment passed an amendment to its foreign direct investment regime that increases its powers to investigate and block foreign direct investments in the defense sector, in critical infrastructures, including the media industry, and in certain other civil technologies that are relevant to security, such as IT-security. The amendments will enter into force in January 2019.

This is the second significant reform of the German foreign direct investment rules within one and a half years. Germany already tightened restrictions on foreign direct investments in July 2017 by expanding the competences of the German Federal Ministry of Economic Affairs and Energy to review whether a foreign direct investment jeopardizes public order or security of the Federal Republic of Germany and

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