For M&A transactions, foreign direct investment (FDI) screening has become an important element in investment planning, in addition to merger control and the new European regime on the Foreign Subsidies Regulation (FSR).

Acquisitions by foreign investors of companies operating in strategic industries, infrastructure or technologies may be subject to mandatory screening under national FDI regimes on grounds of public order or security.

As is the case with merger control, where a mandatory screening is applicable, investors may generally not close the transaction before having received clearance from the relevant authorities. A number of regimes also have voluntary notification systems with an ability to “call in” transactions that were already completed.

Planning ahead is therefore key to mitigate risks and secure clearances in a swift and efficient manner.