New FDI Screening Act Submitted to Parliament – Proposed Scope Substantially Expanded

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The Government submitted its proposal to the Parliament for a new FDI Screening Act (in Finnish: Sijoituslupalaki) on 22 October 2026. The proposal suggests substantial expansions to the scope of the notification obligation.

The reform is driven by the rapid and significant changes in the security environment, with safeguarding and maintaining national security increasingly reflected in business operations, including corporate acquisitions and investments. The Act is expected to enter into force on 1 April 2027 and the key reforms are reviewed below.

1   Mandatory Notification

The Government Proposal introduces a mandatory notification obligation for all foreign investments falling within the scope of the Act. This would eliminate the distinction in the current Act between mandatory and voluntary notifications.

2   All Foreign Investments Within the Scope of the Act

The proposal eliminates the current distinction between notification obligations of EU/EFTA-based investors and those based outside the EU/EFTA.

The proposal is simply a single definition of the notification obligation, which would cover all entities with registered offices outside Finland and natural persons who are not Finnish citizens, who invest in any company falling within the scope of the Act.

A Finnish-registered entity also falls under the definition where a foreign investor directly or indirectly holds at least 10% of its aggregate voting rights or otherwise exercises equivalent de facto influence. However, the proposal provides a limited exclusion for certain EU-established or EU-registered alternative investment funds and equivalent private-equity structures, subject to conditions concerning actual control and foreign investors’ voting rights or equivalent influence.

3   Expansion of Sector Coverage

The current Act does not include a list of sectors covered by its scope of application. This has been a deliberate choice aimed at maintaining flexibility and avoiding the need for updates through the legislative process every time the security environment shifts.

The Government Proposal has settled on a hybrid model. It includes the previous, broadly defined industries, as well as the more specific sectors defined in the EU’s new FDI Screening Regulation, in which investments must be monitored in all EU countries. The approach is intended to provide greater clarity regarding the scope of the screening regime while addressing the EU Regulation’s requirements.

The Government Proposal suggests that the authorisation procedure would apply in the following sectors:

  1. Entities that produce or supply defence materiel and controlled dual-use items – these remain under the scope of the Act largely as defined currently. With regard to defence materiel, however, the scope also includes entities that intend to produce or supply defence materiel or other products or services essential to military national defence or the Finnish defence industry.
  2. Entities that produce or supply critical products or services to Finnish authorities essential to public safety and in connection with their statutory duties.
  3. Entities whose operations, products or services involve access to confidential or security-classified information, datasets or data repositories relevant to national security, the implementation of comprehensive security or safeguarding security of supply.
  4. Entities that produce or supply information and communications technology or cybersecurity products or services that are significant for national security, the realisation of comprehensive security, or for ensuring security of supply.
  5. Entities whose operations, products, or services relate to ensuring security of supply, critical infrastructure, or other vital functions or services of society.
  6. Entities subject to mandatory screening under the EU FDI Screening Regulation. The proposal does not propose to set these out in the text of the Act, but currently they include defence and dual-use items, critical technologies (semiconductors, quantum technologies, certain artificial intelligence solutions), key functions of transportation, energy, and digital infrastructure, the value chain for strategic raw materials, key entities in the financial and payment systems, and information systems designed for electoral processes.

In principle, this is a significant change, as sector-specific listings have been deliberately avoided in the past. In reality, however, many of the sectors listed above are already subject to the notification requirements under the current Act, either explicitly or in practice. For example, companies operating in the semiconductor, quantum, and artificial intelligence sectors that are covered by the EU FDI Screening Regulation would very likely already fall under the definition of companies producing dual-use items subject to export controls. The final proposal indicates that the more detailed sector list is intended to clarify and codify existing practice, rather than to materially expand every category.

On the other hand, the scope also included entirely new sectors, for example, companies operating in the critical minerals sector, for which the applicability of the current Act would have been less clear. It is also worth noting that the Act is proposed to cover entities that intend to produce or supply defence materials or other services or products important to military national defence, extending the Act’s scope beyond actual production.

4   Obligation to Notify New Business Activities

One key reform is to bring investments that create new business activities in Finland under the notification obligation when the investment targets certain sectors.

The notification obligation would apply to foreign investments in a company, business unit or entity which intends to be active in the following sectors:

  1. Production or supply of defence materiel or other products or services important to the operation of military national defence or the Finnish defence industry;
  2. The production or development of controlled dual-use items;
  3. Construction and maintenance of port infrastructure, as well as port operation and cargo handling services;
  4. Construction and maintenance of airport infrastructure, as well as ground handling services;
  5. Establishment of a logistics terminal in the food, healthcare, liquid fuel, gas or hydrogen sectors, or to serve the needs of national defence and the defence industry;
  6. Provision of data centre services or establishment of certain data centres, including those with a potential electrical capacity of at least 100 MW;
  7. Energy projects involving:
    • electricity generation from wind or solar power with a capacity of at least 300 MW,
    • other electricity generation or electricity storage with an electrical capacity of at least 100 MW,
    • hydrogen projects, district heating or cooling production, subject to the applicable capacity thresholds or licensed natural gas network operations and related critical activities; and
  8. Mining and processing projects related to the EU’s strategic raw materials.

Screening these so-called greenfield investments will raise questions of interpretation, starting with when exactly in the process of setting up a new business activity should the notification be made, though the proposal has added some detail following the consultation phase. For example, the final proposal clarifies that screening may also apply to an entity that has already been established but has not yet commenced operations. The entity’s intended purpose would be assessed based on the overall circumstances and objective indicators, such as business plans, financing or investment decisions, project plans and permit applications.

The final proposal also clarifies that an authorisation would cover subsequent development of the investment target, provided that the development does not materially depart from the business described in the application.

Guidance from the authorities immediately upon the Act’s entry into force will be important to prevent unnecessary friction in international investments in innovation.

5   New Thresholds

The Act proposes new ownership thresholds which trigger the notification requirement. In addition to the current thresholds of 10%, 33.3%, and 50%, the acquisition of ownership interests or de facto influence of 66.6% and 90% would also require prior notification. These new additional thresholds align with significant ownership and control thresholds under Finnish company law and aim to increase the authorities’ ability to intervene in situations where the nature of the investment target or its client base has changed following after the majority 50 % investment.

The establishment of new companies in sectors subject to monitoring would be subject to authorisation where the investment involves an ownership interest of at least 10% or equivalent influence. When acquiring additional shares, the same assessment criteria apply as for other investments falling within the scope of the Act.

6   A Two-Phase Process

Another key reform introduced by the EU’s FDI Screening Regulation is a two-phase process and statutory review periods. Another new feature is the division of the phases between two authorities.

Under the proposal, the National Emergency Supply Agency (in Finnish: Huoltovarmuuskeskus) would act as the authority in the first phase, while the Ministry of Economic Affairs and Employment would conduct the second phase.

  • The Government Proposal includes a first phase, during which the National Emergency Supply Agency would review the application. The maximum duration of this phase would be 45 days. In practice, after the first phase, the authority would either grant permission for the investment or refer the matter to the second phase for review. A decision to prohibit the investment could only be made after the second phase.
  • Applications could then be referred to the Ministry of Economic Affairs and Employment for a second phase The Act does not specify a review time for the second phase. After this, a decision to prohibit the investment would still have to be made in the plenary session of the Government, as is the case under the current Act.

Completing the first phase within 45 days and the role of the new authority will require changes to current processes. According to data from the Ministry of Economic Affairs and Employment, in 2025 the processing time averaged 71 days for cases falling within the scope of the Act. The 45-day deadline applies to the first phase of the screening procedure. The proposal does not specify an equivalent deadline for the second phase, meaning that cases referred for an in-depth review may take longer to resolve.

7   Penalties

The assessment memorandum published at the beginning of the preparation phase already noted that the existing Act is lenient both in terms of the variety and the severity of penalties. Significant changes to the penalty system are indeed proposed, as the system would shift from criminal fines to an administrative penalty.  All penalty payments would be imposed by a penalty payment board operating in connection with the National Emergency Supply Agency. The proposed maximum penalty payment would be EUR 10 million or 10% of the foreign investor entity’s worldwide annual turnover in the preceding financial year, whichever is higher, and EUR 500,000 for a natural person.

8   What does this mean for companies and transactions?

The aim of the reform is to enable a wide-ranging and effective response to various risks, which is understandable given the changed geopolitical climate. However, the cumulative effect of the changes is an Act which, overall, has a much broader scope than the current Act on the Screening of Foreign Corporate Acquisitions.

For transactions and investments, this means, above all, that the process under the FDI Screening Act will need to be incorporated as an integral part of the project plan in those sectors covered by the Act. On the other hand, the single mandatory prior-authorisation obligation for all investments falling within the scope of the Act provides certainty. Statutory review times and the two-phase process also make the course and duration of the process more predictable.

In addition to transactions, the proposed Act would impose an on-going obligation on the owners of affected companies to report changes in ownership interests even after acquiring a majority interest. The Act’s new thresholds trigger the obligation to submit a prior application for authorisation even for the acquisition of 66.6% and 90% ownership interests or de facto influence. In this regard, particular care must also be taken by investors in companies whose operations evolve or that have been presented with new customer opportunities that bring them within the scope of the Act, even where this was not previously the case. Investments falling within the scope of the proposed Act would require prior authorisation. Companies should therefore assess whether an investment is subject to the authorisation requirement before proceeding with the transaction.

The proposed Act would also extend the screening regime to certain investments creating new business activities in specified sectors and activities, making it important to assess the scope of the Act at an early stage of investment planning.

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