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Mixed picture: Germany clarifies its FDI regime in view of high-tech and further sensitive companies

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Krause Hartmut
Dr Hartmut Krause

Partner

Frankfurt am Main

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Olgemoeller Udo Herbert
Dr Udo Herbert Olgemöller

Partner

Frankfurt am Main

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Wuepper Alexander
Alexander Wüpper

Counsel

Frankfurt am Main

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04 May 2021

On 1 May 2021, the latest amendment of the German Foreign Direct Investment (FDI) regime entered into force, following a decision of the German government as of 27 April 2021.

The key element of this amendment is the expansion of the mandatory clearance requirement for transactions by which a Non-EU or Non-EEA investor acquires directly or indirectly 20 % or more of the voting rights in German companies active in specific sensitive sectors, most of them usually referred to as high-tech industries. Consequently, the German FDI regime will in the future differentiate between four categories of relevant acquisitions, each of these categories covering different target companies and focussing on different groups of investors. These categories provide for different thresholds which trigger either a mandatory clearance requirement or a screening right of the German government, which may make a voluntary filing advisable.

The latest amendment also clarifies in which situations add-on acquisitions fall under the German FDI regime, i.e. where a clearance is mandatory or may be advisable even though the initial threshold has already been reached or exceeded. Moreover, the amendment provides for more clarity with regard to internal restructurings which should not be subject to a clearance requirement.

Further amendments of the German FDI regime are expected to be enacted within the next weeks and months, particularly relating to the acquisition of shares via stock exchanges.

Read our full article, that summarises what investors need to know in relation to applicable thresholds, in-scope industries and particularities in cases of add-on acquisitions and internal restructurings.

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