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Foreign direct investment reviews 2023: A global perspective

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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: Japan

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

8 min read

Japan's Ministry of Finance (MOF), together with ministries responsible for specific industry sectors, reviews foreign direct investments (FDI) under the Foreign Exchange and Foreign Trade Act (FEFTA).

2019's FEFTA amendments expanded the scope of FDI review, lowered the filing threshold (by expanding the filings required), and introduced exemptions (which in practice reduce the filings required).

Recent updates

  • The MOF updated its list of public companies that preliminarily classifies those companies' businesses as among those operating in "non-core sectors," "core sectors," or "undesignated sectors." The list is to be reviewed and updated periodically, with the most recent update in November of 2021. However, as before, filers cannot rely on this list and must perform their own analysis
  • Business sectors relating to critical minerals, including rare earth, were added to "core sectors." Those business sectors include: (i) metal mining; manufacturing, repair/maintenance of software for devices or products used for metal mining; and component analysis services for minerals; and (ii) the construction services business for improving or maintaining port facilities on designated remote islands to ensure the smooth operation of mineral exploration vessels
  • FEFTA was amended to deem certain transactions relating to crypto-assets "capital transactions" subject to prior approval to enhance the effectiveness of economic sanctions against Russia

Who files

Depending on the type of business in which the target entity is engaged, FEFTA requires a "foreign investor" to submit a prior notification and/or a post-transaction filing through the Bank of Japan to the MOF and relevant ministries. Foreign investors include:

  • Individuals who do not reside in Japan, termed "non-residents"
  • Entities or other groups established under laws or regulations of, or having their principal offices in, foreign countries
  • Entities in which an individual or entity described above holds 50 percent or more of the total voting rights
  • Partnerships operating in the investment business of which 50 percent or more of the total capital has been contributed by foreign entities, foreign groups or non-residents, or the majority of general partners are non-residents
  • Entities in which the majority of directors or representative directors are non-residents

Business sectors relating to critical minerals, including rare earth, were added to “core sectors”

Types of deals reviewed

The MOF and Japan's ministries with jurisdiction over the target entity's business review two types of transactions: designated acquisitions and inward direct investments.

  • A designated acquisition is a transaction where a foreign investor acquires any shares (even one share) of a non-listed company from another foreign investor.
  • An inward direct investment is defined to include transactions, among other things, where a foreign investor:
  • Acquires one percent (1 percent) or more of a listed target entity's outstanding shares or total voting rights
  • Acquires any shares (even one share) of an unlisted target entity from a resident shareholder
  • Consents to material changes to the business purposes of an unlisted target company, regardless of ownership percentage, or a listed target company where the foreign investor owns one-third or more of the target company's total voting rights
  • Consents to shareholder meeting proposals to nominate that foreign investor or certain related parties to the board or certain other extraordinary transactions such as a sale of the company, regardless of ownership percentage for an unlisted target company and when holding 1 percent or more of the voting rights for a listed target company
  • Obtains proxy voting authority at an unlisted company, or such authority equivalent to 10 percent or more of the total voting rights of a listed company
  • Acquires the right to exercise 1 percent or more of a listed company's voting rights
  • Obtains the agreement of other foreign investors to jointly exercise their respective beneficially owned voting rights, where the aggregate beneficially owned voting rights across all relevant foreign investors account for 10 percent or more of the total voting rights of a listed company
  • Lends to a Japanese company more than ¥100 million, where the company's debt to the foreign investor accounts for more than 50 percent of the company's debt
  • Purchases corporate bonds which meets certain criteria, including that they amount to more than ¥100 million and account for more than 50 percent of the company's debt

Scope of the review

Foreign investors are required to make a prior notification and/or a post-transaction filing through the Bank of Japan to the MOF and relevant ministries with respect to certain inward direct investments.

Prior notification filings may be required depending on whether the target entity is engaged in designated industries or the characteristics of the foreign investor (including nationality, location (including region)) and whether the investor qualifies for exemptive relief).

A foreign investor who has obtained a prior notification filing approval for any inward direct investments is required to make a post-transaction filing within 45 days of the completion of the transaction.

A foreign investor is required to submit a prior notification filing with regard to a designated acquisition if the target company is engaged in designated industries. Post-transaction filings are not required for a designated acquisition unless the foreign investor claimed an exemption from prior notification filings for its stock acquisition.

Review process timeline

Foreign investors must make their prior notification filings within the six-month period prior to the completion of the transaction. In other words, approvals are valid for six months from the date on which the filings were officially received by the BOJ.

By default, transactions subject to a prior notification filing cannot be closed until the expiration of a 30-calendar-day waiting period from the date on which MOF and the ministry having jurisdiction over the transaction received the filing. However, the waiting period may be shortened to two weeks. Nevertheless, the MOF and the relevant ministries can extend the waiting period up to five months if necessary for the review.

If the MOF and the relevant ministry find the transaction under review problematic in terms of national security, they may recommend that the foreign investor change the content of the transaction or discontinue the transaction after consultation with the Council on Customs, Tariff, Foreign Exchange and other Transactions. The foreign investor must notify the MOF and the relevant ministry of whether it will accept the recommendation within ten days after receiving such recommendation. If the foreign investor does not provide notice or refuses to accept the recommendation, the MOF and the relevant ministries may order a modification of the content of the transaction or its termination before the expiration date of the waiting period.

How foreign investors can protect themselves

Exemption scheme for prior notifications

The 2020 FEFTA Amendment introduced exemptions from the prior notification filings otherwise required for stock purchases. Foreign investors are categorized into three types under the exemptions from the prior notification filings: foreign financial institutions; general investors; and non-qualified foreign investors. The coverage of the exemption differs depending on the type of foreign investor involved. All of the exemptions are subject to the requirement that the foreign investor comply with the following three exemption conditions:

  • The foreign investor and its closely related persons will not serve on the board of the target company as directors or audit & supervisory board members
  • The foreign investor will not make proposals at shareholders' meetings to dispose of material businesses in designated industries
  • The foreign investor will not access sensitive confidential technologies that are related to the target company's business in designated industries

Decision on whether to make a prior notification filing

In principle, the applicability of a designated industry is determined based on the issuer's actual business. In practice, however, a filer makes the classification judgment based on publicly available information, such as company websites and commercial registries, as well as input from the issuer, if possible.

To help such assessment, foreign investors may refer to the MOF list of public companies discussed above, designating businesses as being involved in "non-core sectors," "core sectors" or "undesignated sectors."

Practical tip

For investors who wish to make flexible and speedy investments in response to market trends, such as investment funds, it is worth considering making a prior notification filing a bit more frequently than every six months for possible investments in a target company.

Sometimes, after making a prior notification, filers receive questions regarding their own business, intended transactions with the issuer, etc. from the ministries, and may be asked to make covenants in a filing relating to possible transactions. There is, however, room to negotiate the language of the proposed covenants, and filers can suggest changes to the ministries.

Looking ahead

According to a public release from the MOF in June 2022, the number of pre-filings in FY 2021 (April 2020 to March 2021) was 2,859. The number of pre-filings has been increasing over the past few years: 1,946 in FY 2019 and 2,171 in FY 2020, and this trend is expected to continue going forward. We have occasionally encountered significant delays in reviews by the government and, somewhat frequently, we have encountered requests for a filer to withdraw a filing so that the government can unofficially extend the review period. We expect those requests will increase as the number of filings increases. Filers should consider filing as early as possible, as filers are able to make a FEFTA filing anytime within the six-month period prior to the planned transaction.

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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.

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