Leandros Papaphilippou, Pantelis Christofides, George Valiantis, Marios Menelaou, Irene Christina Anthi Christofide, Christina Paraskeva and Irene Skitsa (L Papaphilippou & Co LLC) and Maria Vasileiadi (White & Case) co-authored this publication

Introduction

The Establishment of the Framework for the FDIS Law of 2025 (Law 194(I)/2025) was published in the RoC Official Gazette on November 14, 2025. On March 27, 2026, the RoC Ministry of Finance ("MoF") announced that the FDIS Law will take legal effect on April 2, 2026. The MoF is the competent authority and contact point under Regulation (EU) 2019/452 and has also launched a dedicated FDI screening webpage, through which interested parties can access contact details for the competent authority, a draft Notification Form dated March 16, 2026, and a List of Supporting Documents relating to a notification.

Summary of major recent changes

The FDIS Law concerns inbound foreign direct investments ("FDI") and introduces a number of novel features.

A key development is the introduction of significant look-back provisions. The MoF may screen any FDI, irrespective of whether it falls within the framework of obligatory notification, where there are valid reasons to consider that the FDI could affect the security or public order of the RoC. In particular, where the FDI:

• is not subject to obligatory notification, the MoF may exercise this power within 15 months from the date on which the investment is made; or
• is subject to obligatory notification and has not been notified, the MoF may exercise this power within five years from the date on which the investment is made.

Another important feature is the forthcoming establishment of the Advisory Committee, which is composed of representatives of the competent ministries. The Advisory Committee provides information and reasoned written advice to the MoF regarding notified FDIs and is, among other things, entitled to call before it representatives of a ministry, deputy ministry or other service, as well as representatives of the private sector, professional associations or other stakeholders, to provide their expertise, subject to a conflict check and confidentiality declaration. The reasoned written advice to the MoF is based on a written suggestion from the representative of the ministry, deputy ministry or other service within whose jurisdiction the FDI under screening primarily falls.

A further implementation step occurred on March 27, 2026, when the MoF announced the commencement date of the FDIS Law and published, on its dedicated FDI screening webpage, a draft Notification Form and a List of Supporting Documents. These materials provide additional practical guidance on the information and documentation expected to accompany a notification.

Who files?

A foreign investor intending to proceed with an FDI is required to notify the MoF of the investment by submitting a written application prior to its materialization.

The term "foreign investor" refers to:

• a natural person who is not a citizen of a Member State of the EU, the European Economic Area ("EEA"), or Switzerland; or
• an undertaking of a third country, meaning any country other than the EU, EEA Member States or Switzerland, which either intends to materialize or has materialized an FDI.

"Materialization of investment" refers to the point in time at which the final condition precedent connected with the investment decision of the parties to a foreign investment transaction is fulfilled, while "transaction" refers to any acquisition, agreement or other financial activity that leads to the acquisition of the entirety of, or part of, or any interest in, an undertaking within the RoC.

The notification obligation arises where the following criteria are cumulatively met:

• the FDI results in the acquisition of special participation;
• the FDI value, whether in isolation or in combination with other transactions between the same parties within 12 months from the date on which the FDI is scheduled to be materialized, equals or exceeds €2 million; and
• the FDI concerns an undertaking of strategic importance.

"Special participation" is considered the acquisition, whether directly or indirectly, in isolation or in concert with other persons, of a percentage corresponding to at least 25 percent of the share capital and/or voting rights, or a corresponding possibility of exercising decisive influence over the undertaking's activities.

Thus, even where EU, EEA or Swiss citizens participate in the undertaking concerned, the prospective acquisition of special participation by a foreign investor could still trigger the screening process, with the MoF looking through to the ultimate investor or ultimate beneficial owner.

In addition, any undertaking, organization, foundation or other legal entity in which at least 25 percent of the share capital and/or voting rights is held by a foreign investor, and/or where the ultimate beneficial owner is a foreign investor, and/or in which the foreign investor possesses, directly or indirectly, control of such entity, and which intends to proceed with an FDI in an undertaking of strategic importance (meeting the cumulative criteria above), is subject to the notification obligation.

Finally, a further increase of special participation that results in the foreign investor's share capital and/or voting rights moving (a) from below 25 percent to 25 percent or more, or (b) from below 50 percent to 50 percent or more, also gives rise to a notification obligation, irrespective of the FDI value.

Types of deals reviewed

The FDIS Law explicitly refers, as to its scope, to undertakings of strategic importance, that is, undertakings performing activities falling within particularly sensitive sectors, as defined in the FDIS Law Annex. The term "undertaking" refers to:

• any entity, whether a legal person or not, other than a natural person, including a company established pursuant to the RoC Companies Law or any entity established in any other manner, including partnerships, clubs, foundations and trusts; or
• any entity recognized or established in accordance with the legislation of a country or territory other than the RoC that carries out activities or provides goods or services in the RoC.

"Control" refers to the possibility of exercising decisive influence over the activities of an undertaking, organization, club, foundation or other legal entity, in particular through:

• the ownership or right of use, whether directly or indirectly, of all or at least 25 percent of the voting rights or assets of the undertaking or other legal entity; or
• rights, contracts or other means that, either individually or in combination and taking into account the relevant factual or legal circumstances, provide the possibility of exercising decisive influence over the composition, votes or decisions of the management bodies of the undertaking or other legal entity. De facto power to exercise such rights is also taken into consideration as a triggering factor.

FDIs that concern ships under construction, or ships that constitute the subject matter of sale or purchase, other than Floating Storage and Regasification Units (FSRUs), are exempt from the notification obligation.

Scope of the review

The FDIS Law sets out expansive criteria and a wide range of factors the MoF may consider when screening an FDI.

First, the factors taken into consideration by the MoF in evaluating whether an FDI is likely to affect the security or public order of the RoC, include, among others:

• whether the undertaking, in which the FDI is envisaged to be materialized is active in a particularly sensitive sector concerning critical infrastructure, whether physical or virtual, including energy, transport, water, health, education, tourism, communications, media, data processing or storage, aerospace, defense, electoral or financial infrastructure, including systemic credit institutions, sensitive facilities, as well as land and immovable property crucial for the use of such infrastructure;
• the likely consequences of the FDI concerning access to sensitive information, including personal data, or the ability to control such information;
• the freedom and pluralism of the media;
• critical technologies and dual-use items as defined in Point 1 of Article 2 of Council Regulation (EC) No. 428/2009, including technologies in the fields of artificial intelligence (AI), robotics, semiconductors, cybersecurity, aerospace, defense, energy storage, quantum and nuclear technologies, as well as nanotechnologies and biotechnologies; and
• the supply of critical inputs, including energy or raw materials, as well as food security.

Second, the MoF may also consider:

• whether the foreign investor is directly or indirectly controlled by the government of a third country, including state bodies or armed forces, among others, through ownership structure or the provision of significant funding;
• whether the foreign investor has already been involved in activities affecting the security or public order of an EU Member State;
• whether there is a serious risk that the foreign investor will engage in illegal or criminal activities;
• comments submitted by EU Member States and/or the opinion of the European Commission pursuant to Article 6, Paragraph 9, of Regulation (EU) 2019/452;
• the degree to which the FDI under screening affects, or is likely to affect, the security or public order of another EU Member State other than the RoC, or of the EU as a whole; and
• whether the FDI is likely to affect projects or programs of EU interest, as defined in the Annex to Regulation (EU) 2019/452.

Finally, any contract, agreement or transaction requiring prior approval under the FDIS Law is deemed subject to a condition precedent of obtaining that approval.

Review process timeline

Indicative FDI screening timeframes are as follows:

Phase I: The MoF will decide, after consulting the Advisory Committee, within 20 business days of receipt of a complete FDI notification whether the transaction will be subject to screening. During this initial assessment, the MoF may request additional data, information, explanations or clarifications. The 20-business-day timeframe is suspended until the requested information is submitted. If the MoF determines that the FDI will not undergo screening, it notifies the foreign investor within five business days of that decision.

Phase II: If the MoF determines that the notified FDI is subject to screening, it notifies the foreign investor within five business days. The MoF then decides, within 65 business days, from the date it designates the FDI under screening, whether the FDI could affect the security or public order of the RoC. This timeframe is suspended if additional information is requested, until such information is provided.

During this process, the MoF consults the Advisory Committee, which may request the appearance of the foreign investor or its legitimate representative to provide clarifications. Nothing in the FDIS Law restricts the European Commission's jurisdiction to issue an opinion or the right of other EU Member States to submit comments under Regulation (EU) 2019/452.

If the MoF concludes that an FDI does not affect the security or public order of the RoC, it informs the foreign investor within five business days. If it concludes otherwise, the MoF may impose conditions or prohibit, terminate or reverse the FDI and will notify the foreign investor accordingly.

In preparation for the entry into force of the FDIS Law, the MoF has also published a draft Notification Form and a List of Supporting Documents, which give investors additional visibility into the expected filing process.

How foreign investors can protect themselves

A foreign investor should consider at the outset, prior to engaging in the concentration control or corporate law due diligence process, whether:

• the proposed FDI falls within the scope of the notification obligation;
• the MoF may nonetheless proceed with a retrospective screening within the broad statutory timeframe, even if the proposed FDI does not fall within the notification obligation; and
• the investor is in a position to provide complete information and documentation required under the FDIS Law, both at the submission date and in response to any subsequent data requests by the MoF and the Advisory Committee, bearing in mind that the Advisory Committee is entitled, if deemed necessary, to request the presence of the foreign investor or its legitimate representative to provide clarifications regarding the FDI.

Foreign investors should also review the draft Notification Form and List of Supporting Documents published by the MoF, as these materials provide an early indication of the content, supporting evidence and level of detail likely to be required in practice.

This evaluation must be carried out on a case-by-case basis, particularly as MoF decisions will not be published. Two further issues merit close attention:

• notification may still be required for internal restructurings, such as increases in special participation; and
• the existence and content of notifications that have been made, or should have been made, before the competent FDI screening authorities of other EU Member States, as the degree to which the FDI affects or is likely to affect the security or public order of another EU Member State or of the EU as a whole constitutes an express indicative consideration for the MoF's assessment.

Foreign investors should also be mindful of the possible outcomes of the screening process, as well as the sanctions that may apply. Any MoF decision issued under the FDIS Law may be challenged through an administrative recourse before the Administrative Court under Article 146 of the Constitution. Where circumstances so dictate, the MoF is entitled to:

• authorize the FDI under screening subject to specific terms and conditions, which will be notified to the foreign investor; or
• prohibit, terminate or reverse the FDI under screening, to the extent that it concerns an undertaking of strategic importance, if it considers that the FDI affects the security or public order of the RoC and/or does not fulfil the terms and conditions imposed by the MoF.

Failure to notify a notifiable FDI constitutes an automatic breach of the FDIS Law. In such cases, the MoF may take any measures at its disposal to prohibit, terminate or reverse the relevant FDI, including applying to a competent RoC court for prohibitory, mandatory or interim orders.

In addition, the MoF may impose administrative sanctions, including administrative fines, on a foreign investor or any person exercising direct or indirect control over the FDI in the event of an infringement or omission to comply with the provisions of the FDIS Law, including:

• an omission to proceed with the notification of an FDI;
• either (i) the provision of false or misleading information or (ii) an omission to provide information, in connection with any obligation imposed pursuant to the FDIS Law; or
• an omission to comply with any measure ordered by the MoF.

Lastly, foreign investors may wish to include protective contractual mechanisms, such as purchase price adjustment or re-evaluation clauses linked to potential MoF conditions.

_{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.}

_{© 2026 White & Case LLP}