Germany: New Trends Emerging from Established National FDI Regime

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Overview: investment screening

Regulatory framework and recent developments

The German foreign direct investment regime (the German FDI Regime) is based on the Foreign Trade and Payments Act (AWG)[2] and the Foreign Trade and Payments Ordinance (AWV),[3] which regulates the implementation of the provisions of the AWG. The AWV especially contains the procedural rules and defines the reporting provisions.

Both the AWG and the AWV have been amended and adapted various times in the past few years. Three amendments occurred in 2020 alone, in response to the covid-19 pandemic and to implement the EU FDI Regulation[4] into national law. A further amendment came into force in May 2021. In 2022, only minor changes have been made.[5]

These recent legislative acts have led to substantial changes to the German FDI Regime by tightening the regime and expanding the types of entities that trigger filing obligations. According to recently published figures by the German government, the number of national FDI cases increased from 66 in 2017[6] to 306 in 2022 (plus an additional 264 EU notifications).

In June 2020, as a first reaction to the covid-19 crisis, the legislator extended the types of entities triggering a mandatory filing obligation to companies who are active, inter alia, in the field of personal protective equipment, various medicinal products and in vitro diagnostics. These changes were made in the context of (unsubstantiated) media reports[7] that former US President Trump attempted to acquire German pharmaceutical company CureVac to secure exclusive covid-19 vaccine production for the United States.

With another significant amendment, the legislator considerably lowered the thresholds for intervention in respect of FDI in Germany. Previously, the intervention threshold required an actual threat to public order or safety. However, pursuant to amendments that entered into force in July 2020, it is now sufficient if the foreign investment is likely to affect public order or security.

The legislator also introduced a standstill obligation for all transactions in which a filing obligation exists. This includes ‘cross-sectoral’ entities (covering the acquisition of critical infrastructure, among other things, by non-members of the European Union (EU) and European Free Trade Association (EFTA) (see below)) as well as sector-specific screening cases, covering the acquisition of defence and related industries by non-German buyers (see below).

With a further amendment, the implementation of the EU FDI Regulation in Germany was completed by introducing the EU-wide cooperation mechanism.

The latest substantial amendment occurred in May 2021, whereby the scope of application was significantly expanded by, inter alia, introducing 16 new types of entities for mandatory filing. The definition of the new entities is kept very narrow and therefore more specific than the EU FDI Regulation and the regulations of other EU Member States covering,[8] inter alia, future and key technologies such as artificial intelligence (AI), cybersecurity, quantum technology, robotics or autonomous driving, but also closing existing gaps by introducing types of entities relating to airlines or large agricultural farms.

The coalition agreement of the current German federal government, signed in December 2021,[9] raised the question whether in the event of clearly defined security threats due to takeover of critical infrastructures (such as power grids or broadband networks) through foreign investors, current legal instruments are sufficient. In this regard, the German the Federal Ministry of Economic Affairs and Climate Protection is planning to reorganise the direct investment regime to fuse existing regulations into a single law.[10] However, no relevant amendments to the law have been made yet.

In the light of these recent developments, the current German FDI Regime can be described as follows.

Competent authority

The German Federal Ministry of Economic Affairs and Climate Action (BMWK or the Ministry)[11] in Berlin is the sole competent authority for all investment screenings in Germany.[12]


Transactions falling under the scope of the German FDI Regime can be divided in two parts: first, acquisitions that trigger a filing obligation (owing to the specific activities of the target) and, second, other activities for which the BMWK can open investigations ex officio (without a filing obligation). As the latter is not limited to specific sectors, in theory any acquisition of any German company can be subject to an FDI screening if certain thresholds are exceeded (see further below).

For legal practice, the most relevant question is if a specific transaction triggers a filing obligation. In this context, the AWV distinguishes (more for historical than for practical reasons) between two categories – the cross-sectoral screening[13] and sector-specific screening.[14] The latter applies to the acquisition of companies active in the fields of defence or information technology (IT) security only. The cross-sectoral screening covers a broad variety of types of entities triggering a filing obligation, most prominent of which are critical infrastructures. In total, the AWV currently includes 27 types of entities plus seven critical infrastructures (with sub-sectors), triggering a mandatory filing obligation under the conditions outlined below.

In general, the German FDI Regime applies[15] when a foreign investor acquires:

  • a German company (meaning the whole company, a branch or a permanent establishment) via a share or asset deal;
  • a direct or indirect interest of more than 10 per cent of the voting rights of a German company operating in a critical infrastructure (see below) or in other specifically defined sectors such as IT and telecommunications services and cloud computing services relating to critical infrastructures, media contributing to the formation of public opinion or being active in the defence or technology sector;
  • a direct or indirect interest of more than 20 per cent of the voting rights of a German company operating in the area of medical products such as personal protective equipment, medicine and related components, in vitro diagnostics or in one of the emerging technologies (e.g., semiconductors, artificial intelligence (AI), 3D printing, quantum technology, automated or autonomous driving, robotics and cybersecurity); or
  • a direct or indirect interest of more than 25 per cent of the voting rights of any other German company.

The German company must be active in the respective sectors. Therefore, greenfield investments are not covered by the German FDI Regime and require no filings.[16, [17]]

Under the German FDI Regime, neither the annual turnover nor any other monetary threshold relating to the German company is of relevance. However, there are specific thresholds for cross-sectoral screening of some types of entities, especially critical infrastructures. The latter are defined as facilities, installations or parts thereof belonging to the energy, IT and telecommunications, transportation and traffic, health, water, food, and finance and insurance sectors that are of great importance to the functioning of the community because their failure or impairment would result in significant supply shortages or threats to public safety.[18], [19] To determine whether a target is to be classified as a critical infrastructure, the Ordinance for Determining Critical Infrastructures under the Act on the Federal Office for Information Security (BSI-KritisV) defines specific threshold values according to which such a facility is classified. These thresholds relate to the output or capacity of the facility (e.g., energy generated, food produced, units of medicine sold), not to their turnover. For example, power generation systems are considered as critical infrastructures with an installed net nominal output (electrical) of 420MW or more, and a passenger handling system at an airport requires a minimum of 20 million passengers per year.

Types of investors

The German FDI Regime always relates to a foreign investor investing in a German company. However, the legislator does not use this term consistently. Rather, the potential groups of investors described by the term ‘foreign investor’ depend on the sector in which the target is active. The distinction is made between the cross-sectoral screening and the sector-specific screening.

According to the cross-sectoral screening rules, all investors located outside the customs territory of the EU and EFTA are considered foreign investors.[20] Under these rules, an acquisition falls under the scope of the German FDI Regime if (1) the direct acquirer is located outside the EU and EFTA territory, or (2) one of the direct acquirer’s direct or indirect shareholders, with a minimum amount of voting rights (10 per cent or 20 per cent depending on the specific sector) is located outside the EU and EFTA territory.

Under the sector-specific screening rules, all investors not resident in Germany are considered foreign investors.[21] Since the sector-specific screening involves areas of particular security relevance for Germany, investors from other EU Member States are also considered foreign investors. Under these rules, an acquisition falls under the scope of the German FDI Regime if (1) the direct acquirer is located outside Germany, or (2) if one of the direct acquirer’s direct or indirect shareholders, with a minimum amount of 10 per cent of voting rights, is located outside Germany.

The screening rules also apply if a German, EU or EFTA company is established by a foreign investor with the sole purpose of avoiding a cross-sector or sector-specific screening process (e.g., a shell corporation).[22] According to the AWV, indications of such an avoidance approach or a transaction circumventing the filing obligations shall in particular include cases in which the direct acquirer does not maintain any significant business operations of its own other than the acquisition itself. Furthermore, an avoidance approach could be assumed if the direct acquirer does not have any permanent establishment (including offices, employees, equipment) within the EU or EFTA.

In general, subsidiaries and permanent establishments of a non-EU or non-EFTA acquirer (or in the case of a sector-specific screening, a non-German acquirer) shall not be considered as EU or EFTA resident (non-German respectively) subsidiaries or establishments and therefore cannot avoid the possibility of a transaction falling under the German FDI Regime.

Notification and review process

As set out above, there are three categories under which the German FDI Regime provides the BMWK with the competence to investigate a specific transaction: (1) cross-sectoral screening, requiring a mandatory filing; (2) sector-specific screening, requiring a mandatory filing; and (3) any other transaction, for which the BMWK has the competence to initiate an FDI proceeding ex officio under specific conditions, without a corresponding filing obligation.

For the first two categories, the filing obligation lies with the direct acquirer of the German company and arises with the signing of the underlying contract. It is possible to initiate a filing in advance of signing; however, the documentation to be provided to the BMWK must already include the essential content of the contracts, and the risk of any material deviation between the draft and the final version lies with the applicant.

Notification requirements

Cross-sectoral screening

The mandatory filing obligation (mainly) exists for the following entities:[23]

  • companies that operate critical infrastructure in the energy, water, food, telecommunications, media and technology, finance and insurance, health and transport sectors (all subject to a specific threshold as outlined above);
  • companies that manufacture industry-specific software for a critical infrastructure;
  • providers of specific cloud computing;
  • companies within the media industry that contribute to the formation of public opinion and are characterised by particular topicality and breadth of impact;
  • companies that are obliged to carry out organisational measures regarding telecommunications surveillance or products or have produced technical equipment used to monitor telecommunications;
  • companies considered indispensable for the trouble-free operation of the communications infrastructures operated by the Federal Authority for Digital Radio of Security Authorities and Organisations;
  • companies holding a licence for providing telematics infrastructure components or services;
  • manufacturers or developers of personal protective equipment (as defined by Article 3 No. 1 of Regulation (EC) 2016/425);
  • companies that develop or manufacture, market or hold a corresponding marketing authorisation for specific medicinal products and vaccines, including starting materials and medical compounds;
  • companies that develop or manufacture medical devices (such as surgical masks and respiratory equipment);
  • companies that develop or manufacture in vitro tests for the diagnosis, prevention, monitoring, prediction, prognosis, treatment or alleviation of life-threatening and highly contagious infectious diseases;
  • companies that develop or manufacture goods using AI procedures to be used for automatically conducting cyberattacks or imitating persons so as to actively spread disinformation, analysing voice communication or biometric identification, and analysing data for surveillance;
  • companies that develop or manufacture vehicles or unmanned aircraft that dispose of technical equipment for the control of automated or autonomous driving or navigation functions or essential components for the control of those functions or the relevant software;
  • companies that develop or manufacture IT products or essential components for the protection or defence of attacks on IT systems or for IT-based investigations of crimes;
  • companies operating specific satellite systems;
  • companies that develop or manufacture robots for handling explosives or designed to function in space, deep sea or under radiation exposure;
  • companies that develop, manufacture or finish (inter alia) specific nanoelectronic components;
  • companies that produce specific smart meter gateways;
  • companies that employ people who work for specific state organisations in security-related functions;
  • companies that are active in the extraction of specific raw materials;
  • companies that develop or manufacture goods that are subject to the protection of a patent or protected design under state security;
  • companies that develop or manufacture goods that specifically serve for the operation of wireless or wired data networks;
  • airlines and companies that develop or manufacture specific components for aerospace;
  • companies that develop or manufacture goods or components relating to quantum IT, quantum communication or quantum measuring technologies and other specific high-technology products and components; and
  • companies farming (directly or indirectly) an area of at least 10,000 hectares.

Sector-specific screening

Transactions are subject to a mandatory notification to the BMWK if the acquisition concerns a company that:

  • develops, manufactures, modifies or actually disposes of weapons, ammunition or armour;
  • develops, manufactures, modifies or actually disposes of defence technology goods covered, inter alia, by a patent rendered confidentially pursuant to the respective rules under the German Patent Act;
  • manufactures or has manufactured products with IT security functions to process classified state material or components essential to the IT security function of those products; and
  • that is a facility that is vital to defence.[24]

Ex officio screening

If a German company is not one of the types of entities that triggers a notification requirement, the BMWK may open FDI proceedings ex officio at its own discretion.

This requires a minimum direct or indirect acquisition of 25 per cent of the voting rights of a German company by an investor from outside the EU and EFTA.[25] The BMWK has the power to scrutinise any transaction that it believes is likely to affect the public order or security of Germany, any other EU Member State or the EU itself.

If there is no filing obligation, investors have the opportunity to apply for a ‘certificate of non-objection’[26] to minimise their risk. The BMWK will review in case of a minimum direct or indirect acquisition of 25 per cent of the voting rights in the German company and issue the certificate if the specific transaction does not have a negative effect on public order or service (see below for more details).

Relevant thresholds in the context of screening categories

As described above, in the context of the different meanings of the term ‘foreign investor’, various thresholds exist, triggering a filing obligation.

A filing obligation exists with respect to (1) critical infrastructures (and other defined sectors) and the defence sector if the acquirer directly or indirectly holds 10 per cent of the shares of the relevant company after the acquisition or (2) other filing entities if the acquirer directly or indirectly holds 20 per cent of the shares of the relevant company after the acquisition.[27]

In this context, it makes no difference if the acquirer already holds shares in the target before the acquisition or not. The relevant factor is the total number of voting rights held after the transaction.

With the latest amendment, the legislator introduced new rules on how to deal with the acquisition of additional shares if the number of shares held by an investor is already above the relevant threshold. Until this latest amendment, in theory, the acquisition of each share triggered a new filing obligation.

Now, a filing obligation is only (re-)triggered if the total number of shares will exceed specific thresholds, namely:

  • critical infrastructure: 20, 25, 40, 50 or 75 per cent;
  • any other filing entity: 25, 40, 50 or 75 per cent; or
  • in respect of ex officio proceedings: 40, 50 or 75 per cent in total after the relevant acquisition.[28]

Furthermore, the AWV now includes various stipulations, further clarifying atypical forms of acquisition. In particular, if a foreign investor does not exceed the relevant thresholds but does obtain an effective stake in the control of a German company by the assurance of additional seats or majorities in supervisory bodies or management, the granting of veto rights in respect of strategic business or personnel decisions or the granting of specific rights to information, which do not correspond with the number of voting rights, the AWV deems the arrangement to be an atypical acquisition. If this is the case, there is no filing obligation but the BMWK is entitled to initiate ex officio proceedings.

Timeline for review proceedings

The BMWK has two months from becoming aware of the signing of a transaction to decide whether to initiate formal proceedings. The Ministry will be deemed aware on receipt of a mandatory filing or an application for a certificate of non-objection, or from other sources (e.g., press releases).[29]

In the event that the BMWK comes to the conclusion that the grounds for opening a formal proceeding exist, additional documentation is requested for conducting an in-depth analysis, following the procedure outlined in a general ruling published in the Federal Gazette.[30] Once the BMWK has received full documentation for its review, the Ministry will have an additional four months to reach a decision whether to permit the transaction, or to prohibit or impose restrictions or obligations concerning the transaction.

The BMWK may extend this deadline for the formal proceeding by three months in individual cases when there are particular difficulties of a factual or legal nature. The deadline may be extended by a further month if the acquisition affects the defence interests of the Federal Republic of Germany to a particular extent and the Federal Ministry of Defence asserts this circumstance to the BMWK within the first extension of the deadline.

Therefore, the maximum period between filing and receiving a decision could be 10 months. However, there might be a substantial gap between the end of the initial proceeding and the beginning of the formal proceeding if the BMWK is not provided with the required documentation. This could delay the final decision for an indeterminate period.

Furthermore, the maximum period of 10 months can also be exceeded in individual cases. In this respect, the AWG provides that the four-month review period is suspended in two situations: namely, if the BMWK requests further information in the course of the formal proceeding from any affected party by means of an administrative act; or if the BMWK enters into negotiations about contractual provisions with those involved in the acquisition. The suspension will end on receipt of the requested information or at the end of negotiations.

If an acquisition has not been notified, and the BMWK has not become aware of the transaction from other sources, the BMWK is entitled to review the acquisition and to intervene for up to five years following the execution of the transaction documents. The opening of such ex officio investigations must occur within five years of signing.

Timeline for the certificate of non-objection

If a non-EU/EFTA investor directly or indirectly acquires a minimum of 25 per cent in voting rights of a German company, which does not fall under the sector-specific screening and does not trigger a filing obligation under the cross-sectoral group, a certificate of non-objection can be applied for. With this certificate, the investor can be assured that the BMWK will not open ex officio investigations.

The investor will submit documentation for filing comparable to that required for a mandatory filing. After receiving the application, the BMWK has two months to decide whether to issue a certificate of non-objection or to initiate formal review proceedings. If no decision is rendered, the certificate of non-objection shall be deemed to have been granted.

Should the BMWK decide to initiate formal proceedings, the subsequent steps will follow the timeline of a cross-sectoral screening.

Sanctions for non-compliance

Acquisitions by asset purchase agreement or stock purchase agreement, triggering a mandatory filing obligation, are deemed subject to a condition subsequent that the acquisition shall not be prohibited by the BMWK. The closing of such transactions is considered temporarily invalid until the acquisition has been permitted by the BMWK.[31] Alongside these civil law-based mechanisms, the legislator has introduced a sanctions system.

With the latest amendments to the German FDI Regime, a standstill obligation was introduced for all transactions that are subject to a mandatory filing obligation.

The German FDI Regime defines the following as punishable violations of the standstill obligation:[32]

  • to enable the purchaser to directly or indirectly exercise voting rights, in particular by handing over bearer securities, by endorsing registered securities, by specific transfers, by concluding voting trust agreements, accepting instructions to exercise voting rights or similar actions;
  • to grant the acquirer the right to receive all dividends or their economic equivalent accompanying the acquisition;
  • to provide or otherwise disclose to the acquirer company-related information, including data stored electronically or otherwise, about the German company, insofar as the information relates to departments or objects of the company that are subject to the German FDI procedure; or
  • to provide or otherwise disclose to the acquiring company information about the German company that has been separately identified by the BMWK as significant and for which the Ministry has ordered a specific safety relevance.

An intentional breach of this standstill obligation is considered a criminal offence, punishable by imprisonment for up to five years or a fine for the individuals responsible. Negligence is considered an administrative offence, punishable by a fine of up to €500,000. This concerns both sector-specific and cross-sector transactions. Note that the omission of a legally required, mandatory FDI filing per se is not considered as a crime or administrative offence.

Substantive assessment process and main evaluation criteria

In the course of the FDI proceeding, the BMWK will assess whether a transaction is permissible under the statutory requirements, must be prohibited or may be permitted subject to specific instructions.

The statutory criteria for this assessment are (1) under the cross-sector rules, whether the acquisition could have a likely effect on public order or security in Germany, another EU Member State or special EU programmes,[33] and (2) under the sector-specific rules, whether the acquisition is likely to impair essential national security interests.[34]

In respect of both assessments, the AWV sets out the criteria to be considered. Even though it is not an exhaustive list, it clarifies that (inter alia) circumstances relating to the acquirer itself may be of particular relevance for the underlying risk assessment of the acquisition. These statutory criteria are that:

  • the acquirer is directly or indirectly controlled by a foreign government or other government authority or the armed forces of a third country (where control can be exercised by the ownership structure or by financial resources);
  • the acquirer has already been involved in activities that had an adverse effect on public order or public security in Germany or any other EU Member State; or
  • there is a significant risk that the acquirer or the individuals acting on his or her behalf are, or have been, involved in specific criminal acts (e.g., financing terrorism, money laundering, fraud, bribery or corruption) or have been committing a crime or administrative offence under the scope of the AWG or the German War Weapons Control Act.

The BMWK is not entitled to prohibit transactions on any grounds other than those statutorily defined.[35] Therefore, a prohibition or particular instructions to strengthen the competitiveness of certain sectors or companies in Germany would be considered illegal under the German FDI Regime.

Furthermore, the AWG and AWV have implemented the EU FDI Regulation review scheme, by empowering the BMWK – in respect of cross-sector screenings – to also examine the interests of EU Member States or special EU programmes in the course of a German FDI filing.

The BMWK will either permit or prohibit a transaction, or grant permission under specific conditions. If the BMWK has not made a decision within the statutory deadlines set out above, clearance of the transaction shall be deemed to have been issued. Other than in the preliminary proceeding, for which the two-month period cannot be extended, it is rather unlikely that the BMWK will not make a positive decision one way or the other within this time frame in order to conclude the formal proceeding.

Judicial review

A decision by the BMWK to prohibit a transaction or to permit it under specific conditions constitutes an administrative act. Administrative acts are subject to judicial review by the Berlin Administrative Court. If an affected party decides to file a claim at the Court, the claim does not have a suspensive effect per se.

In the course of a new draft amendment to the AWV, it will be possible to issue these administrative acts in electronic form. Likewise, the digital submission of applications or documents in electronic form is to be made possible for all documents to be submitted within the framework of investment reviews.[36]


Typically, in the course of a formal proceeding, the BMWK will invite the affected parties to enter into negotiations on remedies that are then contained in a contract under public law, which can be agreed instead of rendering a decision by an administrative act. By negotiating such a contract under public law, the acquirer (and other potentially involved parties such as shareholders and the seller) might offer specific remedies to secure conditional clearance of the transaction.

There is no formal list of potential remedies to be offered but, typically, the acquirer guarantees to carry out specific actions (such as continuing to produce and sell specific products in Germany to the German market) or to refrain from specific actions (e.g., not to transfer specific know-how to other jurisdictions).

Impact of the pandemic

In the context of the covid-19 pandemic, the German FDI Regime was amended by introducing additional entities that are subject to a filing obligation, namely:

  • manufacturers or developers of personal protective equipment (as defined by Article 3 No. 1 of Regulation (EC) 2016/425);
  • companies that develop or manufacture, market or hold a corresponding marketing authorisation for specific medicinal products and vaccines, including starting materials and medical compounds;
  • companies that develop or manufacture medical devices (such as surgical masks and respiratory equipment); and
  • companies that develop or manufacture in vitro tests for the diagnosis, prevention, monitoring, prediction, prognosis, treatment or alleviation of life threatening and highly contagious infectious diseases.

It is expected that these additional types of entities will remain permanently within the German FDI Regime.

Enforcement practice

The BMWK does not usually publish its decisions, but in 2023 it published facts and figures on the German investment screening process for the second time.[37] The data release showed that a total of 306 transactions were filed in 2022: 262 were cross-sectoral transactions and 44 were sector-specific transactions.

Of these transactions 110 investors were US-based, 40 were UK-based. and 37 were based in China. The sectors targets of these transactions were active in were:

  • IT: 87
  • health and biotechnology: 34;
  • engineering: 29;
  • energy: 18;
  • media and semiconductors: 18;
  • aerospace: 14;
  • logistics: 14;
  • finance: 7; and
  • defence: 3.

Ninety-two per cent of the filings were decided in under two months. Only 8 per cent went to Phase II. Measures (i.e., prohibition or remedies) were taken in only seven cases (2 per cent of the filings) in 2022.[38] In 2021, measures were taken in 4.5 per cent of the filings, and 7.5 per cent of the filings in 2020.

These figures show that the BMWK prohibits transactions only in very exceptional cases. The statistics do not give information on cases where the acquirer ceased the transaction and withdrew the respective clearance application before an expected prohibition order could be rendered. However, the overwhelming majority of filings are permitted.

In January 2022, an FDI decision became subject to court proceedings for the first time: a preliminary decision[39] of the administrative courts of Berlin. which was decided in favour of the BMWK. Further cases are currently pending.

In October 2022, the Federal Cabinet decided by way of a partial ban that a foreign investor could only acquire shares below the threshold (25 per cent at that time). The company simply reduced its purchase to 24.9 per cent.[40] Another transaction that received increased attention was prohibited by the BMWK in November 2022. The reason given was a threat to public order and security of Germany, particularly given the huge dependence on microprocessor production.[41]

Practical insights and strategic guidance for investors

As the German FDI Regime is subject to continuing developments, a constant review of the current statutory requirements is essential to guarantee compliance with German law. Further, the BMWK is currently developing its administrative practice – which is again an ongoing process, given the constant changes in law. Again, this must be monitored closely.

Until the most recent amendments, it was recommended to apply for a certificate of non-objection, as it could be applied for even if there was a filing obligation. This is no longer possible. However, if there is any doubt (which is especially possible in all cross-sectoral filings without specific thresholds), the BMWK might accept (after prior discussion) an application for a certificate of non-objection in combination with an official filing, issued under the condition that the BMWK is of the opinion that a filing obligation exists. This approach can save up to two months as, otherwise, the BMWK could reject the application for the certificate of non-objection after a period of up to two months, requesting in this context to submit an official filing.

Further, the BMWK can be approached with a request for guidance in cases where investors have doubt as to whether a specific filing obligation exists or not. Even though the BMWK is not obliged to answer these requests, it is typically cooperative as such requests for guidance can help to avoid unnecessary filings, which is in the interest of all parties.

In any case, each direct or indirect investor should consider a German FDI filing and seek relevant advice with regard to any transaction with a German aspect, even if it relates only to a German branch or subsidiary.

Reform proposals

The German FDI Regime has been amended various time during the past few years. The EU FDI Regulation has now been fully implemented, new entities subject to mandatory filing obligations have been introduced and new rules have been confirmed on the relevant thresholds of shares in a German company that trigger an (additional) filing obligation.

One can only assume that the legislator will not introduce further amendments for a while, or at least reduce the speed of amending the existing regime.

Furthermore, the BMWK has already announced that the measures under the current AWV will be evaluated in 2022. The Ministry might come to the conclusion that specific sectors are no longer of such relevance for German public order or security that a mandatory filing obligation is justified or that additional evolving industries have become more important and therefore should fall within scope.[42] One can expect that the new technical rules will be reviewed regarding their practicability and be adjusted as deemed necessary. So far, the evaluation has not been published.

In any case, the German FDI Regime will remain a dynamic field of law and subject to constant review by the BMWK and the legislator.


1 Marius Boewe is a partner and Kristin Kattwinkel is an associate at Herbert Smith Freehills LLP.

2 Außenwirtschaftsgesetz (AWG).

3 Außenwirtschaftsverordnung (AWV).

4 Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union.

5 In March 2022, the scope of the administrative offences was expanded to include violations of sanctions concerning restrictive measures against Russia and arms embargoes (see 18th Regulation Amending the Foreign Trade and Payments Ordinance, Federal Gazette 18. Available at In December 2022, the export list was expanded (see 19th Regulation Amending the Foreign Trade Regulations, available at AT 23.12.2022 V1.pdf)). However, these changes leave investment control largely unaffected.

6 In 2017, the mandatory filing obligation for specific cross-sectoral case groups was implemented.

11 Bundesministerium für Wirtschaft und Klimaschutz (BMWK).

12 See AWV, Section 55 (1).

13 Sektorübergreifende Prüfung – AWV, Sections 55 to 59.

14 Sektorspezifische Prüfung – AWV, Sections 60 to 62. Until 2017, a filing obligation existed only regarding acquisitions within the sector-specific group.

15 See AWV, Section 56.

16 This is explicitly confirmed by the BMWK on (last accessed 16 September 2021).

17 The Ministry now plans to examine whether, particularly in areas relevant to security in justified special cases, the FDI Regulations should be extended to greenfield investments as well (see

18 cf. Act on the Federal Office for Information Security [BSIG], Section 2(10).

19 It is expected that the definition of ‘critical sectors’ will be extended to other critical areas, in particular the production of microprocessors in Germany, which is to be subjected to particularly close scrutiny (see

20 AWV, Section 55(1).

21 id., Section 60(1).

22 See id., Section 55(2).

23 See id., Section 55a and the Ordinance for Determining Critical Infrastructures under the BSIG [BSI-KritisV], Annex I to VII.

24 See AWV, Section 60(1).

25 id., Section 56(1) No. 3.

26 According to AWV, Section 58.

27 See AWV, Section 56 (1) Nos. 1 and 2.

28 id., Section 56(2).

29 The full timelines are stipulated in AWG, Section 14a.

30 BAnz AT 11 April 2019 B2.

31 AWG, Section 15, (2) and (3).

32 id., Section 15(4).

33 AWV, Section 58a.

34 id., Section 61.

35 The ministry plans to introduce a reversal of the burden of proof using a standard example. Instead of the government having to prove that a transaction is a security risk, companies will have to prove that it is not (see

38 The figures are as of 9 January 2023. At that time, 39 cases instigated in 2022 have not yet been completed. Therefore, changes are likely to occur here.

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