Our thinking

Foreign direct investment reviews 2023: A global perspective

What's inside

A guide to navigating the rules for investing in countries that require foreign direct investment approval.


Now in its seventh year of annual publication, White & Case's Foreign Direct Investment Reviews provides a comprehensive look into rapidly evolving foreign direct investment (FDI) laws and regulations in approximately 40 national jurisdictions and two regions. This 2023 edition includes more than 15 new jurisdictions in addition to those covered in previous editions and summarizes high-level principles in the European Union and Middle East. Our expansion in coverage reflects the rapid global proliferation of FDI regimes and our market leading position in the field.

FDI regimes are wide-reaching in scope, from national security to public health and safety, law and order, technological superiority, and continuity and integrity of critical supply chains. They are divergent with respect to jurisdictional triggers across countries, and are almost always a black-box process.

The following are some general observations, in large part based on the 2022 CFIUS and EU annual reports:

  • The number of FDI regimes and regulatory enhancements is growing around the world, particularly in Europe. In 2021 and 2022, four EU Member States—Czech Republic, Denmark, Netherlands and Slovakia—implemented new FDI regimes, and in 2023, Sweden and Belgium are slated to adopt FDI screening measures (in addition to non-member Switzerland).
  • FDI regulators, at least from allied nations, are collaborating and learning from each other. CFIUS reported at its first annual conference in 2022 that it continues to host training sessions for US allies so that they can adopt similar regimes.
  • FDI regulators interpret their jurisdiction and authority broadly, especially if they believe it is in the national interest. Many regulators have "call-in," "ex officio," or "non-notified" authority.
  • Despite increased regulation, most cross-border transactions are successfully consummated, although there has been an increase in the number of cases clearing with remedies.
  • The origin of the investor remains a key concern for Western regulators. For example, China and Russia are included more and more in CFIUS's regular Q&A, asking broader and more invasive questions.

Investors conducting cross-border business need to understand FDI restrictions as they are today—and how these laws are evolving over time—to avoid disruption to realizing synergies, achieving technological development and integration, and ultimately securing liquidity.

We would like to extend a special thank-you to all of our external authors, who have provided some insightful commentary on the FDI regimes in a number of important jurisdictions. The names of these individual contributors and their law firms are provided throughout this publication.

We would also like to extend a special thank-you to James Hsiao of our Hong Kong office and Tim Sensenig of our Washington, DC office for their tireless efforts and dedication to the publication of this edition.



The Canadian government announced a strict framework to evaluate foreign investments in the critical minerals sector by state-owned enterprises and state-linked private investors, especially if from “non-likeminded” countries.

canada fdi 2022


Foreign direct investments, whether undertaken directly or indirectly, are generally allowed without restrictions or without the need to obtain prior authorization from an administrative agency.

mexico fdi 2022

United States

Most deals are approved, but expanded jurisdiction, mandatory filings applying in certain cases, enhanced focus on national security considerations, and a substantially increased pursuit of non-notified transactions have changed the landscape.

United States of America



Driven by the European Commission's guidance, Member States keep expanding their investment screening regimes. A similar trend is observed in Europe at large.

european union fdi 2022


In Austria, the Austrian Federal Investment Control Act (Investitionskontrollgesetz or the ICA) introduced a new, fully fledged regime for the screening of Foreign Direct Investments (FDI) and came into effect on July 25, 2020. With its wide scope of application and extensive interpretation by the competent authority, the number of screened investments has soared.

austria fdi 2022


Belgium implements an FDI screening regime by July 1, 2023.


Czech Republic

The new Foreign Investments Screening Act took effect in May 2021, and completed its first full year in operation in 2022.

czech republic fdi 2022


The scope of the Danish FDI regime is comprehensive and requires a careful assessment of investments and agreements involving Danish companies.

denmark fdi 2022


Estonia will have in place an FDI review regime by September 2023.

estonia fdi 2022


Deals are generally not blocked in Finland.



In France, FDI screening authorities have issued new guidelines to improve the transparency of the FDI process.

france fdi 2022


The Federal Ministry for Economic Affairs and Energy continues to tighten FDI control, but the investment climate remains liberal in principle.

germany fdi 2022


The need for FDI screening remains in focus for deals with Hungarian dimensions.

hungary fdi 2022


Ireland anticipates adopting and implementing an FDI screening regime by Q1 2023.

ireland fdi 2022


Italian "Golden Power Law:" Ten years old and continuously expanding its reach.


Republic of Latvia

The Russian Federation's invasion of Ukraine has precipitated the inclusion of provisions blocking Russian and Belarussian nationals from direct investment in a number of sectors.



All investments concerning national security are under the scope of review.



Luxembourg has introduced a bill of law to regulate foreign direct investments. The law is currently being discussed before the Luxembourg Parliament.



Malta's recently introduced FDI regime captures a substantial number of transactions that must be notified to the authorities and, in some cases, will be subject to screening.


Middle East

The Middle East continues opening to foreign investment, subject to licensing approvals and ownership thresholds for certain business sectors or in certain geographical zones.

Middle East


The Netherlands prepares for its first effective year of new FDI regulation.



Changes in the geopolitical situation have resulted in increased awareness of security threats caused by strategic acquisitions and access to sensitive technology. The ongoing review of the FDI regulations in Norway is expected to result in more effective mechanisms to identify and deal with security threats in transactions and investors should be prepared to take this into account when planning future investments in Norwegian companies that engage in sensitive activities.



The Polish FDI regime governing the acquisitions of covered entities by non-EEA and non-OECD buyers has been extended until July 2025.



Transactions involving foreign natural or legal persons that allow direct or indirect control over strategic assets may be subject to FDI screening.



The Romanian regime regarding foreign direct investment has undergone a major change in 2022, when new legislation was enacted, and is aimed at implementing relevant European Union legislation.


Russian Federation

The Federal Antimonopoly Service (FAS) tends to impose increased scrutiny in the sphere of foreign investments and has developed a number of amendments to the foreign investments laws that are aimed at eliminating legislative gaps in this sphere.

Russian Federation


On November 29, 2022, Slovakia, for the first time, adopted full-fledged foreign direct investment legislation. This legislation is effective as of March 1, 2023.



Since May 31, 2020, certain foreign investments into Slovenian companies can be subject to review. Acquisition of real estate related to critical infrastructure may also be subject to review.



The restrictions imposed by the Spanish government on foreign direct investments during the COVID-19 outbreak have remained after the pandemic.



Other than security-related screening, Sweden is currently still without a general FDI screening mechanism.



Historically, Switzerland has been very liberal regarding foreign investments. However, there has recently been increased political pressure to create a more structured legal regime for foreign investment.



Making Türkiye an attractive investment destination continues to be a priority for the government.


United Arab Emirates

Foreign direct investment is permissible in the UAE, subject to applicable licensing and ownership conditions.


United Kingdom

The UK’s National Security & Investment Act has now been in place for a year and has already made its mark, prohibiting deals on national security grounds and also requiring remedies in cases that are not subject to the mandatory notification requirement.  We expect a continued tough approach over the next year as global geo-political tensions bring national security concerns to the fore.




Australia requires a wide variety of investments by foreign investors to be reviewed and approved before completion of the investment.



China has further developed its national security regulatory regime by promulgating measures on cybersecurity review and security assessment of cross-border data transfer.



India continues to be an attractive destination for foreign investment, ranking as the world's seventh-largest recipient of FDI in 2021.



The Japanese government continues to review filings and refine its approach under the FDI regime following the 2019 amendments.



Korea is increasing the level of scrutiny of foreign investments due to growing concerns over the transfer of sensitive technologies.


New Zealand

Recent legislative reforms have increased the New Zealand government's ability to take national interest considerations into account, but have also looked to exclude lower-risk transactions from consent requirements.

New Zealand


All FDIs are subject to prior approval, but the investment climate is welcoming and liberal.


Foreign direct investment reviews 2023: Hungary

The need for FDI screening remains in focus for deals with Hungarian dimensions.

12 min read

Iván Sólyom (Lakatos, Köves és Társai Ügyvédi Iroda) authored this publication

Despite their similarities, there are major differences between the two regimes

Hungary has currently two separate FDI regimes in force.

The first regime, the so-called "General FDI Regime," which was introduced on January 1, 2019 to basically implement EU Regulation no. 2019/452, has a relatively narrow scope regarding the sectors covered (national security, public utility services, certain financial services).

The second FDI regime in effect is the "New FDI Regime," which has been adopted due to, and in connection with, the COVID-19 pandemic. Compared to the General FDI Regime, the New FDI Regime covers a wider number of sectors and activities. It, however, also contains significant exceptions (such as the exception for indirect transactions), which are commonly used in practice to avoid the need for FDI screening.

The basic concept of Hungarian FDI screening is that transactions which fall under either the General or the New FDI Regime require both notification to and acknowledgement by the competent minister as a precondition to the implementation of the deal. The competent ministers are (i) the Minister leading the Prime Minister's Cabinet Office for the General FDI Regime and (ii) the Minister of the Economic Development under the New FDI Regime.

Although the New and the General FDI Regimes are regulated in separate pieces of legislation, which do not refer to each other, the subject matter (FDI screening) is similar, and so their main logic is the same, focusing on the origin of the investor and the activities of the Hungarian target companies. However, despite their similarities, there are major differences between the two regimes (e.g., the "foreign investor" definitions in the two regimes do not match, different exemption rules apply, etc.). As the similarities and differences between them make the Hungarian FDI screening system complex and often confusing, we set out the applicable rules separately in the sections below where needed.

Recent updates

The most recent legislative developments concerning the Hungarian FDI systems is that the Hungarian legislator has adopted an emergency Government Decree under no. 561/2022, which decree slightly extended the scope of the notifiable transactions under the New FDI regime. The new rules are effective as of December 24, 2022 and reflected in our summary above. Another material development, that the final date of the interim extension to the General FDI Regime's scope (i.e., investments by EU/EEA or Swiss entities are also caught as referred above) remains to be effective until June 1, 2023 at the date of this summary.

Who files

In case of both regimes, the foreign investor shall make the FDI notification to the competent minister. However, the foreign investor definitions of the regimes differ.

General FDI Regime

Under the General FDI Regime, any natural person or legal entity qualifies as a foreign investor if it is (i) a citizen of/registered in a country outside of the EU, EEA or Switzerland or (ii) a legal entity registered in the EU, EEA or Switzerland but controlled by a non-EU/EEA/Swiss person/entity (EU entity controlled by a non-EU investor). According to COVID-19-related interim measures to the General FDI Regime, any natural person or legal entity citizen of/registered in a Member State of the EU/EEA or Switzerland is also considered as a foreign investor until June 1, 2023.

New FDI Regime

According to the New FDI Regime foreign investors are those (natural or legal) persons or organisations which are (i) citizens of/registered in a country which is outside of the EU, EEA or Switzerland; or (ii) legal entities registered in the EU, EEA or Switzerland, if they are under the majority control of (natural or legal) persons or organisations citizens of/registered in a country which is outside of the EU, EEA or Switzerland (EU entity controlled by non-EU investor). The New FDI Regime also applies to EU/EEA/Swiss investors (natural and legal persons) if they acquire majority control and the investment exceeds approx. EUR 880,000 (i.e. HUF 350,000,000 as set out in the New FDI Regime).

Types of deals reviewed

Conducting FDI analysis at the initial stages of the intended transaction is critical

Covered transaction types under the General FDI Regime are:

  • A foreign investor establishes a new Hungarian company or acquires an existing Hungarian company (solely or together with other foreign investor(s)) equity exceeding 25 percent (for privately held companies) or 10 percent (in publicly listed companies); or acquires a "dominant influence" in such company
  • Foreign investor(s) acquire(s) equity of less than 25 percent in a privately held company registered in Hungary, but the total equity held by foreign investor(s) exceeds 25 percent as a result
  • A foreign investor registers a branch office in Hungary for the purpose of carrying out listed strategic activities
  • A foreign investor acquires a right to operate or use infrastructure or assets that are indispensable for carrying out listed strategic activities or
  • A company registered in Hungary in which foreign investor(s) hold equity equivalent to that in (1) or (2) above takes up a listed strategic activity

Covered transaction types under the New FDI Regime are:

  • Acquisition of ownership interest
  • Capital increase
  • Mergers, demergers, transformations to another company form
  • Issuance of bonds that are convertible or convert to equity or provide preferential subscription rights
  • Establishing usufruct1 right over equity provided that, as a result of such transaction, the foreign investor would acquire
  • Majority control (by way of ownership, voting rights, appointing management or otherwise) if the investment reaches or exceeds HUF 350 million (approx. €880,000) or
  • At least 5 percent ownership interest (or 3 percent ownership interest in case of public companies), if the investment reaches or exceeds HUF 350 million (approx. EUR 880,000) or
  • An ownership interest reaching 10 percent, 20 percent or 50 percent in a strategic company or any level of interest which, if computed together with any other foreign investors' interest, exceeds 25 percent

In addition, irrespective of ownership thresholds or transaction sizes, the transfer of using/operational rights of infrastructures and assets that are "indispensable for the operation of strategic companies" (including the pledging of these assets and infrastructures) require both notification to and acknowledgement by the competent minister.

Please note that in relation to transactions caught by the New FDI Regime, indirect acquisitions and higher level intragroup restructurings fall outside its scope provided that there is no direct ownership change in relation to the Hungarian target company.

Scope of the review

The scope of the Hungarian FDI Regimes is drafted in a broad way

General FDI Regime

The minister reviews whether the triggering event "harms Hungary's security interests," which is not defined in the relevant laws and thus gives a broad framework for discretion to the competent minister.

In case of an EU entity controlled by a non-EU investor, a blocking decision can only be made in the case of circumvention, i.e., if it can be established that the EU entity's involvement in the transaction is for the purpose of circumventing the FDI screening rules. This could be the case, in particular, if the EU entity controlled by a non-EU investor does not carry out any actual economic activities or has no real presence in the EU Member States.

New FDI Regime

Under the New FDI Regime, the minister evaluates the following criteria:

  • Whether the proposed transaction endangers or threatens to endanger the national interest, public order or public security of Hungary with particular attention to the security of supply relating to the basic needs of the society, in accordance with the relevant articles of the Treaty on the Functioning of the European Union (TFEU Art. 36, 52 (1) and 65 (1), which invoke, among others, public policy, public security or public health issues)
  • Whether the foreign investor is directly or indirectly under the control of any administrative agency of any non-EU state (including its ownership structure or financing)
  • Whether the foreign investor is or was involved in any activity relating to public security or public order in any other Member State
  • Whether there is substantial risk that the applicant will commit any crime or illegal activity

Review process timeline

General FDI Regime

The foreign investor must make a notification to the Minister leading the Prime Minister's Cabinet Office before implementation and within ten days of:

  • Signing the contract, in the event of equity acquisitions and operation right acquisitions
  • The registration of the newly subscribed strategic activity in the company registry, for strategic activities

The deadline for review by the minister is 60 days (extendable by 60 days) from the date of filing.

New FDI Regime

The foreign investor shall make a notification to the Minister of Economic within ten days from signing the transaction documents. The minister has 30 business days to decide on the transaction, which deadline may be extended by 15 business days.

Based on our experience, the relevant ministries do not always comply with the deadlines set out in relevant laws, therefore substantial delays may occur in certain cases, and there are no effective remedies against such delays.


General FDI Regime

Under the General FDI Regime, the minister either issues a clearance decision or a veto decision, the latter if the triggering event "harms Hungary's security interests." In the case of an EU entity controlled by a non-EU investor, a veto decision can only be made in the case of circumvention, i.e., if it can be established that the EU entity's involvement in the transaction is for the purpose of circumventing the FDI screening rules. This could be the case, in particular, if the EU entity controlled by a non-EU investor does not carry out any actual economic activities or has no real presence in the EU Member States.

A veto decision can be challenged by the foreign investor or by the affected company only on a procedural basis (i.e., if the procedural rules of FDI screening have been materially breached). The only exception is that a veto decision can be challenged on a substantive legal basis concerning the ministry's opinion on whether or not the EU entity controlled by a non-EU investor carries out actual economic activities or has real presence in the EU Member States.

New FDI Regime

If the minister finds that any of the conditions for a veto decision apply (see points (a)-(d) above at "Scope of the review"), it shall issue a decision that forbids the completion of the contemplated transaction; otherwise the Minister shall acknowledge the notification.

The Minister is obliged to set out the reasons for any veto decision. However, in practice, the vagueness of the terms of relevant laws allows the Minister to deliver decisions in a discretionary or arbitrary manner.

The decision of the Minister cannot be appealed, but is subject to a challenge before the Metropolitan Court of Budapest, which has 30 days to deliver its decision.

If the court establishes that the rejecting decision was unlawful, it shall set aside such decision and order the minister to conduct a new review.

As mentioned earlier, unfortunately there is no public register on FDI decisions, therefore the proportion and number of denials or any other information relating to the FDI notifications made are not publicly known.

How foreign investors can protect themselves

Conducting FDI analysis at the initial stages of the intended transaction is critical if the contemplated transaction touches on Hungarian companies/assets. In certain cases where whether FDI screening is needed based on the applicable legal provisions, an informal discussion with the competent ministry or a written request to express their views on the transaction on a no-name basis can be useful. However, it shall be highlighted that the ministries are not keen to provide such opinions and those opinions would be on a non-reliance basis.

If the initial FDI analysis is that an FDI notification is necessary under the General FDI Regime, then the FDI notification is mandatory. However, if the initial FDI analysis indicates that an FDI notification is necessary under the New FDI Regime, there are some exceptions to explore before making such a notification:

  • Potential structuring of the transaction to avoid the effects of the New FDI Regime by making the transaction indirect from the Hungarian company's perspective or
  • Consider if an adjustment can be made to the registered activities of the target company so as to avoid unnecessary strategic activities. Hungarian targets may sometimes register a broad list of activities, even though the actual activities of the target are narrower and do not include strategic activities

Further, if a filing is necessary, then the process can be expedited if the filings are well prepared, address potential questions, and appropriate communications and advocacy efforts with relevant authorities are undertaken during the process.

Trends in the review process

The scope of the Hungarian FDI Regimes is drafted in a broad way and applicable FDI laws are vague, which makes it very difficult in certain situations to decide whether a transaction is subject to the mandatory screening or not. The ministries' guidance in these situations is that in case of doubt, it is advisable to file the transaction.

As the General FDI Regime focuses on more sensitive areas like national security, FDI screening under that regime usually takes more time and requires more information to be disclosed to the competent minister.

As there is no public register relating to FDI proceedings and FDI decisions under either regime, the number of FDI notifications and the ratio of acknowledged and vetoed transactions are not publicly known. Based on our past experience, the ministries approve most of the notified transactions. However, where natural resources are concerned, the ministry acts with greater scrutiny (for example, one veto decision was due to the fact that the target owned a natural water spring). There is no question that due to the emerging energy crisis and the armed conflict between Russia and Ukraine, companies that are active in the energy sector or that pursue national security-linked activities are and will be treated with much higher scrutiny.

Lessons learned

  • The relevant ministries always extend the deadlines even in the simplest cases, and they tend to deliver their decisions on the last days of such extended deadlines. It is important to note that in certain cases they do not comply with the applicable deadlines set out in the relevant laws, therefore substantial delays may occur and there are no effective remedies against such delays
  • As there are overlaps between the scope of the two FDI regimes and as they fall within the jurisdiction of different ministries, it is possible that, in certain transactions, two different FDI notifications are needed

1 Meaning a right to enjoy the use of and benefits from equity, absent or in lieu of ownership.

White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.

This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.

© 2023 White & Case LLP