By MRL Advisors Research
Germany, as the EU’s largest economy, has revised and tightened its screening mechanisms for foreign direct investment (FDI) in recent years. Investments in key sectors such as AI, semiconductors, quantum computing and biotechnology were scrutinized with increased attention, particularly in response to global trends towards technological sovereignty.
Does this mean the end of direct investments from countries outside the EU? By no means. Despite an increase in applications since 2021, only 8% of cases had to undergo an in-depth Phase II review in 2023, and only 5% resulted in restrictions – a clear sign that the vast majority of investments continue to run smoothly.
This also applies to investments in key sectors. In recent years, Chinese investors have successfully acquired a number of medical and life science companies in Europe. At the same time, discussions at the EU level on the standardization of FDI review mechanisms signal a step towards greater transparency and predictability – factors that should benefit long-term investors.
The evolving regulatory environment should therefore be seen as an enabler rather than an obstacle. Today more than ever, successful investors are those who act proactively – carrying out thorough risk analyses, working with experts and advisors at an early stage and structuring their transactions in accordance with the rules.
Further insights can be found in the complete study by MRL Advisors, which we will be happy to send to interested parties.
