Changes to the German Foreign Direct Investment Control Regime Take Shape Amid the COVID-19 Crisis

Even before the COVID-19 pandemic, the German Federal Ministry of Economics and Energy (Bundesministerium für Wirtschaft und Energie – BMWi), led by federal minister Peter Altmaier, announced a major revision of Germany’s foreign direct investment control regime (FDI Regime) to come into force in 2020, in what would become the third amendment of the FDI Regime since 2017.

This announcement was made as part of the introduction of the BMWi’s “National Industry Strategy 2030”. The aim of this new industrial policy is to “protect and regain Germany’s commercial and technical expertise, competitiveness and industrial leadership at national, European and global level”.

The amendment of the FDI Regime is primarily envisaged to align it with the new EU Investment Screening Regulation (Regulation), which came into force on April 11, 2019 and will take full effect as of October 11, 2020. The Regulation implements an EU-wide mechanism, institutionalizing the exchange of information and the cooperation between Member States and the European Commission with respect to foreign direct investment reviews. Although the Regulation does not provide for a separate European screening regime, it allows Member States as well as the European Commission to participate in national foreign direct investment investigations, inter alia, by requesting information and issuing opinions. 

Please click here for the full memorandum.