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ARTICLE · 09 OCTOBER 2026

Leaked Draft German Foreign Direct Investment Screening Act

A&O Shearman
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Germany is modernizing its foreign direct investment screening regime to align with EU standards by 2028. The leaked draft of the new Investment Screening Act reveals a largely familiar framework with elevated statutory protections, but introduces notable changes for EFTA investors and listed company thresholds. Will the final legislation maintain this continuity or introduce more substantial reforms as parliamentary debate unfolds?

GermanyGovernment, Public Sector
Dr. Udo Herbert Olgemöller
Dr. Udo Herbert Olgemöller
Stephan Bühner
Stephan Bühner
Nils Najmann
Nils Najmann
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A sneak preview of Germany’s new FDI regime.

1. Background 

Germany is required to align its foreign direct investment screening regime with the standards set out in EU FDI Regulation 2026/1386 by January 17, 2028. This is also consistent with the coalition agreement of May 2025, under which the governing parties committed to a faster, simpler, and more user-friendly investment screening process.

From a more technical perspective, the reform is also intended to strengthen the legitimacy of the regime by replacing the current framework, which is largely based on government-issued regulations, with a statutory framework approved by Parliament. 

The government's draft German Federal Foreign Direct Investment Screening Act (Investitionsprüfungsgesetz—IPG) has been anticipated for some time. A first leaked draft has now begun circulating and offers an initial preview of what is expected to be formally presented in the coming days. It marks the starting point for a broader public and

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