Investment screening (FDI)
Investment screening (Foreign Direct Investment or FDI) comprises the regulatory scrutiny of certain investments – in particular the acquisition of shares above a certain threshold by certain foreign investors – and their official approval. It serves to protect national security and public order interests as well as those of the European Union.
For companies, investment screening is becoming increasingly important, also because the sectors covered have been significantly expanded in recent years. Transactions may be subject to investment screening and therefore require approval, particularly in sensitive sectors (such as technology, infrastructure, energy or healthcare). The legal framework is derived from national regimes and, in the EU, also from the EU Screening Regulation.
For companies, this means: For transactions, potential investment screening obligations must be assessed, and any required approvals prepared and submitted accordingly. Breaches of approval requirements create significant risks for the company and, in some cases, also for the individuals involved. Early and sound advice in the area of investment screening is therefore crucial to ensure the security of the transaction and to effectively manage regulatory risks.
We support companies with all matters concerning investment screening in Austria and with the investment screening assessment of other countries.
Legal advice on investment screening
Investment screening affects a multitude of business acquisition transactions. Our investment screening advisory service begins at an early stage and guides you through the entire transaction process.
Sound legal guidance is particularly necessary for:
- M&A and transactions: As part of investment screening, we examine whether the transaction is subject to the respective investment screening regimes and assist companies with the assessment. Through proactive and transaction-accompanying design, we legally safeguard transactions and avoid unnecessary delays.
- Support with administrative procedures: We represent your interests in proceedings before the Austrian authorities and also handle co-ordination with local lawyers in other countries.
Our expertise in investment screening
Our advice on FDI law is interdisciplinary and practice-oriented. We combine regulatory know-how with transactional experience and strategic advice.
From due diligence to approval, we support all regulatory steps.
We manage complex administrative procedures in Austria and the EU and co-ordinate cross-border screening processes efficiently and in a targeted manner.
Our advice takes into account not only legal requirements but also the commercial objectives of the companies.
Thanks to our close integration with related areas of law (in particular M&A, competition law, state aid law, FSR and public commercial law), we offer integrated and practical solutions.
Risks and sanctions
The FDI regime is characterised by strict requirements and far-reaching powers of intervention by the authorities. Companies that do not comply with regulatory investment screening requirements expose themselves to significant risks. Early legal involvement significantly minimises these risks and creates planning security:
- FDI screening procedure: Transactions can be delayed or blocked by lengthy FDI screening procedures. Authorities can also prohibit transactions or only approve them subject to conditions.
- Reversal of transactions: Contraventions of approval requirements can lead to transactions that have already been executed being deemed invalid.
- Fines and liability: Contraventions of approval requirements or conditions lead to significant sanctions (fines and liability).
Interfaces with adjacent areas of law
FDI law does not stand in isolation, but is closely linked to other areas of law.
- M&A: FDI screenings are an integral part of many transactions and influence structure, timing and completion.
- Competition law: Parallel review proceedings in competition law (in the context of merger control) and investment screening require aligned and coordinated strategies.
- Foreign trade law: Export control and sanctions law aspects can overlap with FDI issues.
- Compliance and Governance: FDI requirements are part of modern corporate compliance systems.
References & success stories
We successfully advise national and international clients on complex transactions involving investment screening approvals:
Legal advice on the acquisition of Rosenbauer
SAXINGER advised the consortium led by Pierer Industrie, Mark Mateschitz and RLB Oberösterreich on the majority acquisition of the firefighting equipment manufacturer Rosenbauer. The transaction also included legal advice and support on investment screening matters.
Legal advice on the investment by Knill, Invest AG and RLB Steiermark in Pankl
SAXINGER provided legal advice to the KNILL Group, Invest AG and RLB Steiermark, as an Austrian consortium, on their investment in Pankl Racing Systems AG. As part of the transaction, the consortium jointly acquired two-thirds of the shares in the Styrian technology company from Pierer Industrie AG. The transaction also included legal advice and support on investment screening matters.
Contact
Investment screening requires an early and careful legal review. We support you and guide you through the entire process – efficiently and solution-focused. SAXINGER has offices in Graz, Linz, Salzburg, Vienna and Wels and is on hand to reliably assist you with all investment screening matters.