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30 September 2020
In July 2020 a new foreign direct investment (FDI) screening act, the Investment Control Act (ICA), entered into force, following the general trend of tightening FDI regulatory frameworks.(1)
The ICA largely transposes the requirements of the EU Foreign Investment Screening Regulation (2019/452). The cooperation mechanism set out in the ICA will take effect concurrently with EU Regulation 2019/452, on which it is based, on 11 October 2020.(2)
Under the ICA, a mandatory filing requirement is triggered if:
No approval is required for an investment in an undertaking with:
The 10% share threshold (voting rights) applies to investments in certain highly sensitive sectors. An exhaustive list of these sectors is provided in Part I of the annex and includes:
For investments in other sensitive sectors relevant for public order or security, the triggering threshold remains 25% and 50% (voting rights). Part II of the annex contains a non-exhaustive list of these sectors, which include:
Other key elements of the ICA are as follows:
The ICA has considerably extended the scope of the old regime. A broad range of investments must now undergo a screening process. This is in line with the general EU trend of tightening or enacting FDI screening instruments, which has been fuelled by concerns of buy-outs of critical European infrastructure by foreign investors due to the COVID-19 pandemic.(3)
For further information on this topic please contact Volker Weiss or Constantin Fladerer at Schoenherr by telephone (+43 1 53 43 70) or email (email@example.com or firstname.lastname@example.org). The Schoenherr website can be accessed at www.schoenherr.eu.
(1) For further details please see "Austrian government proposes new FDI screening act".
(2) For further details please see "A new regulation on FDI screening in Europe".
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