Germany FDI control
Produced in partnership with Hogan Lovells

The following Competition practice note produced in partnership with Hogan Lovells provides comprehensive and up to date legal information covering:

  • Germany FDI control
  • 1. What is the applicable legislation?
  • 2. Which government or other body (or bodies) reviews foreign investments?
  • 3. What is the scope of the foreign investment regime? Does it only apply to specific sectors or types of investors (eg foreign or non-EU / non-WTO)? Are there specific rules for certain types of investors (eg state-owned enterprises)?
  • 4. What are the triggers or thresholds for the regime to apply? What types of transactions are caught? Is there a minimum level of shareholding or a control test that applies?  Are there any other thresholds that need to be met (e.g. based on turnover or market shares)?
  • 5. Are there any exceptions that may apply?
  • 6. Is there any discretion to review transactions that do not meet any thresholds for review?
  • 7. What are the grounds for review, eg public or national security or other grounds?
  • 8. What level of discretion do the relevant authorities have to approve or reject transactions? Is there scope for any other body to intervene?
  • 9. Where a transaction is caught by the regime, is notification mandatory and must closing be suspended pending clearance?
  • More...

Germany FDI control

A conversation with Falk Schöning, partner, and Stefan Kirwitzke, associate, in the Brussels and Berlin offices of global law firm Hogan Lovells on key issues of foreign direct investment (FDI) control in Germany.

1. What is the applicable legislation?

Foreign investment control in Germany is mainly governed by:

  1. Foreign Trade and Payments Act (Außenwirtschaftsgesetz – AWG), and

  2. Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung – AWV).

The AWG lays out the main framework for foreign investment control in Germany, including legal and procedural effects of screening procedures, deadlines and sanctions in case of infringements. The AWV specifies the provisions of the AWG in practice, notably defining which categories of investments are subject to investment screenings in general and enhanced scrutiny specifically. While both AWG and AWV underwent significant reforms in 2020, the AWV is amended more regularly than the AWG, as reforms may be passed by the Federal Government alone without involvement of parliament. The last reform of the AWV was passed in April 2021.

In practice, the Act on the Federal Office for Information Security (Gesetz über das Bundesamt für Sicherheit in der Informationstechnik – BSIG) and its subordinate Ordinance on the Identification of Critical Infrastructure (Verordnung zur Bestimmung Kritischer Infrastrukturen – BSI-KritisV) also play an important role in determining critical infrastructure subject to mandatory filing obligations under AWG and AWV.

2. Which government or other body

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