Luxembourg FDI Screening Regime Entered Into Force

Since 1 September 2023, the Luxembourg Law establishing a mechanism for the national screening of foreign direct investments likely to undermine security or public order ("Law" – for a link to the text as currently available (in French) see here) is fully applicable. The Law implements Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union, which contains essential elements of the framework for the screening of such investments by Member States and introduces co-operation at EU level in the field.

The Law has a significant impact on the timing and proceedings of in-scope M&A transactions.

Main features

The screening mechanism applies to foreign direct investments ("FDI"), excluding portfolio investments (i.e., acquisitions of securities with the intention of making a financial investment and not allowing for the exercise of control), which could undermine security or public order, in a