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Foreign direct investment reviews 2024: A global perspective

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Understanding the ever-evolving global FDI landscape is crucial amid growing regulatory complexities in cross-border transactions


Now in its eighth year of publication, White & Case's 2024 Foreign Direct Investment Reviews provides a comprehensive look at foreign direct investment (FDI) laws and regulations in more than 40 countries worldwide.

In this edition, we continue to offer key datapoints that can help inform parties and their advisors as they evaluate the new set of challenges presented by FDI screening requirements in cross-border transactions that span multiple countries.

FDI screening is continuously evolving, in fact, maturing. Stakeholders in the process, in particular FDI regulatory authorities in allied countries, are communicating and learning from each other. It is imperative to stay on top of the FDI requirements as transactions—be it mergers and acquisitions, investments, public equity offerings, debt structurings or financial restructurings—are negotiated. Understanding the potential remedies that could be required for approval and proper allocation of FDI risk are key ingredients in avoiding unpleasant surprises related to timing, certainty and business plan execution.

The number of national FDI regimes and regulatory enhancements is growing around the world, particularly in Europe, with no harmonization in terms of process and timelines. FDI regulators, at least from allied nations, are collaborating and learning from each other.

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. There is increasing coordination in the European Union (EU) between FDI authorities with the support of the European Commission.

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 the Committee on Foreign Investment in the United States' 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.



The Canadian government continues to scrutinize foreign investments by state-owned enterprises and state-linked private investors, especially if from "non-like-minded" countries.

canada fdi 2022


FDI, whether undertaken directly or indirectly, is 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 without mitigation, but the CFIUS landscape has continued evolving based on a combination of expanded jurisdiction, mandatory filings applying in certain cases, enhanced focus on a broad array of national security considerations, increased rates of mitigation, further attention on monitoring, compliance and enforcement, and a substantially increased pursuit of non-notified transactions.

United States of America



The European Commission continues to be a driver of FDI screening across the EU, with Member States now moving toward coordinated enforcement.

european union fdi 2022


The wide scope, low trigger thresholds and extensive interpretation of the Austrian FDI regime require a thorough assessment and proactive planning of the M&A process.

austria fdi 2022


The Belgian FDI screening regime entered into force in July 2023. In its early days, investors and authorities alike are coming to grips with the new regime and the guidelines that help parties navigate it.



A bill contemplating the creation of a foreign direct investment screening mechanism in Bulgaria is currently before the Bulgarian parliament.


Czech Republic

The new Czech Foreign Investments Screening Act took effect in May 2021, establishing the rights and duties of foreign investors and setting screening requirements for Czech targets.

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's foreign direct investment screening mechanism entered into force on September 1, 2023.

estonia fdi 2022


FDI deals are generally not blocked in Finland.



French FDI screening continues to focus on foreign investments involving medical and biotech activities, food security activities or the treatment, storage and transmission of sensitive data. The nuclear ecosystem is subject to very close scrutiny.

france fdi 2022


Following numerous amendments over the past years, Germany's FDI review continued in full swing in 2023, with further significant updates expected in 2024.

germany fdi 2022


FDI screening in Hungary – forever changing regulation, no change in its importance.

hungary fdi 2022


Ireland is expected to enact its FDI screening legislation in 2024.

ireland fdi 2022


Italy's Golden Power Law is now more than 10 years old and is continuously expanding its reach.



The law in Latvia provides for sectoral FDI regimes for specific corporate M&A, real estate dealings and gambling companies.



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



In 2023, Luxembourg adopted a national screening mechanism for foreign direct investments.



Malta's FDI regime regulates transactions that must be notified to the authorities and, in some cases, will be subject to screening.


Middle East

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

Middle East


The Netherlands, complementing its existing sector-specific regulations, has introduced a general investment screening mechanism to enhance the protection of its national security across a broader range of sectors.



The foreign direct investment regime in Norway is subject to upcoming changes, with further changes expected to come.



The Polish FDI regime – ambiguous rules, no blocking decisions and evolving market practice.



In Portugal, transactions involving acquisition of control over strategic assets by entities residing outside the EU or the EEA may be subject to FDI screening.



The Romanian regime regarding foreign direct investment appears to have become more stable in 2023, but continues to surprise.


Russian Federation

Russian laws regulating foreign investments have been considerably amended in 2023 to extend the scope of the laws as well as to strengthen control in this sphere.

Russian Federation


The new Foreign Investments Screening Act entered into force in Slovakia on March 1, 2023.



Since May 31, 2020, certain foreign investments into Slovenian companies can be subject to foreign direct investments review. Incorporation of new companies and business units can also be screened.



Certain foreign direct investments in Spain are subject to scrutiny under the Law 19/2003 (Law on the movement of capital and foreign economic transactions and on certain measures for the prevention of money laundering). These restrictions started back in 2020 and, since then, additional formalities have been introduced, specifically by the new FDI regulation, which entered into force on September 1, 2023.



In December 2023, Sweden adopted and implemented a new FDI regime, meaning that a general FDI screening mechanism now applies in relation to investments in certain Swedish businesses.



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 introduced new legislation governing FDI in 2022, which also captures domestic investment in certain sectors.




Australia's stringent foreign investment regulations, overseen by the Treasurer and FIRB, safeguard national interests and security. The framework, including the Foreign Acquisitions and Takeovers Act 1975 and recent updates like the Australia-UK Free Trade Agreement, emphasizes transparency and accountability, with new penalties and registration requirements enhancing oversight and compliance.



While restricting the data transfer relating to national security, China issued guidelines to further optimize its foreign investment environment. 



India continues to be an attractive destination for foreign investment, ranking as the world's eighth-largest recipient of FDI in 2023.



Certain businesses related to "Specifically Designated Critical Commodities" have been designated "core" sectors subject to Japan's FDI regime, FEFTA.


Republic of Korea

The Republic of Korea continues to welcome foreign investment, with the government actively seeking to ease regulations and update the regulatory framework to be in line with global standards.


New Zealand

After a number of years of amendments under the OIA from 2018 to 2021, New Zealand has seen a period of stabilization of the overseas investment regime. However, following the recent election and change of government in New Zealand, further changes are expected to better support investments in build-to-rent housing developments.

New Zealand


Taiwan continues to promote FDI under a two-track screening mechanism for foreign and PRC investors.


Foreign direct investment reviews 2024: Japan

Certain businesses related to "Specifically Designated Critical Commodities" have been designated "core" sectors subject to Japan's FDI regime, FEFTA.


8 min read

Japan's Ministry of Finance (MOF), together with industry sector ministries, review FDIs under the Foreign Exchange and Foreign Trade Act (FEFTA).

FEFTA requires FDI review for a broad scope of transactions, with a hair trigger filing threshold, subject to exemptions available in public markets transactions.

Summary of major changes in 2023

  • The Economic Security Promotion Act was promulgated in May 2022. The act newly designates as Specified Critical Products those products whose supply, if disrupted, would significantly impact the survival of citizens, their daily lives or economic activity. The Japanese government designated certain business sectors thought to have an impact on Specified Critical Products as "core" sectors under FEFTA. Acquisitions in such business sectors will now require prior approval under Japan's FDI review regime
  • Newly added core sectors include: fertilizers; machine tools/industrial robots; storage batteries; metals and mineral products; metal 3D printers; permanent magnets; semiconductors (including manufacturing of semiconductor manufacturing equipment); natural gas; and marine equipment

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—a request for permission to conduct the action that is "inward direct investment" or "designated acquisitions" —and/or a post-transaction filing through the Bank of Japan to the MOF and relevant ministries in relation to each action constituting inward direct investment or designated acquisitions.

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; and entities in which the majority of directors or representative directors are non-residents.

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 just one share—of a non-listed company from another foreign investor.

Inward direct investments can cover many scenarios, for example where a foreign investor acquires 1 percent or more of a listed target entity's outstanding shares or total voting rights; or acquires any shares of an unlisted target entity from a resident shareholder.

Inward direct investments also include transactions where a foreign investor 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.

Transactions are also defined as inward direct investments where the foreign investor 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 or when holding 1 percent or more of the voting rights for a listed target company.

Other scenarios include where the foreign investor 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; or acquires the right to exercise 1 percent or more of a listed company's voting rights.

Also covered are situations where the foreign investor 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 (US$693,000), where the company's debt to the foreign investor accounts for more than 50 percent of the company's debt; or purchases corporate bonds that 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 and 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 also 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 regards 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 have made their prior notification filings within the six-month period prior to the completion of the transaction. In other words, approvals are valid until 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 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

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: firstly, that 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; secondly, that the foreign investor will not make proposals at shareholders' meetings to dispose of material businesses in designated industries; and finally, that the foreign investor will not access sensitive confidential technologies that are related to the target company's business in designated industries.

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 available.

To help this assessment, foreign investors may refer to (but cannot rely on) the MOF list of public companies discussed above, designating businesses as being involved in "non-core sectors," "core sectors" or "undesignated sectors."

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 and so on 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": Likely developments in the next year

No major changes to Japan's FDI review regime are expected within the next year. According to a public release from the MOF in June 2023, the number of pre-filings in FY 2022 (April 2021 to March 2022) was 2,426, showing a slight decline from 2,859 in FY 2021. The number of filings made for investments in cybersecurity-related businesses continues to be the highest, and this trend should continue in the coming years.

There are sometimes significant delays in reviews by the government and, somewhat frequently, filers are requested to withdraw a filing so that the government can unofficially extend the review period. These requests are likely to 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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