Legal Alerts/26 Mar 2026
Finnish FDI Screening Regime to Expand Materially
As the geopolitical landscape has changed significantly, the Finnish Government is planning to reform the Finnish FDI screening regime. The current Monitoring Act, which has been in force since 2012, would be replaced by the new Act on the Monitoring of Foreign Investments and Authorisation Procedures (the Investment Authorisation Act) to better address the risks posed by foreign investments to national security, security of supply, and wide-ranging influence activities.
The new Investment Authorisation Act would materially amend the existing Finnish FDI regime and, in particular, broaden its scope of applicability, with several of the proposed changes reflecting the requirements of the new EU FDI Screening Regulation entering into force in the summer of 2026. We anticipate that the number of authorisation applications under the new Act will increase considerably.
Key Changes
Yesterday, the Ministry of Economic Affairs and Employment presented to stakeholders its proposed amendments to the Finnish FDI regime. Based on yesterday's stakeholder discussion, the key amendments would include the following:
- Expanded Sectoral Scope: The current Monitoring Act covers sectors such as the defence industry, dual-use products, and other national security sectors. The new Act would extend its scope to include businesses whose products may give access to classified information or which provide ICT services relevant to national security. It would further encompass businesses whose operations or products are connected to security of supply, critical infrastructure, or related areas. Finally, all sectors covered by the new EU FDI Screening Regulation would fall within its scope, namely: defence and dual-use products, critical technologies, key functions in traffic, energy and digital infrastructure, strategic raw material supply chains, actors critical to financial and payment services, and IT systems designed for electoral processes.
In addition, greenfield investments would require authorisation under the new Act where they concern, inter alia, defence, dual-use products, port or airport infrastructure, logistic hubs critical to security of supply or defence, data centres, energy infrastructure projects, or the mining of strategic raw materials.
- Mandatory Filing in All Sectors: The new Act would make FDI filing mandatory across all sectors within its scope. Voluntary filing, as provided for under the current regime, would no longer be available.
- All Non-Finnish Acquirers Subject to Review: The current regime distinguishes between EU/EFTA and non-EU/EFTA acquirers. This distinction would be abolished. Accordingly, all non-Finnish acquirers falling within the scope of the new Act would be required to file. This obligation would also cover businesses registered in Finland but with direct or indirect foreign ownership exceeding 10% or equivalent actual decision-making power.
- Additional Ownership Thresholds: Under the current regime, filing obligations are triggered by acquisitions of 10%, 33.3%, or 50% of voting rights or equivalent actual decision-making power. The new Act would introduce additional thresholds of 66.6% and 90%. The FDI authority would retain the power to call for filing even where these thresholds have not been crossed.
- Two-Phase Review Process: The new regime would introduce a two-phase review process. The first phase would be conducted by the Finnish National Emergency Supply Agency within 45 days – compared to the current average processing time of 58 days (based on the latest statistics from 2024). If a transaction requires more detailed examination, the matter would be referred to the Ministry of Economic Affairs and Employment (the current FDI authority) for a second-phase review, with no legal deadlines.
- New Sanctions for Non-Compliance: To our knowledge, no sanctions for non-compliance have been imposed under the current FDI regime. While the current regime’s sanction provisions are relatively unclear and based on criminal penalties, the new Act would introduce new, significant administrative sanctions for non-compliance: where an acquirer fails to file a transaction requiring an authorisation, a penalty payment of up to EUR 10 million or 10% of the acquirer’s annual global turnover, whichever is higher, may ultimately be imposed. For natural persons, the maximum penalty would be EUR 500,000. Furthermore, where a mandatory filing has not been made even following a request by the FDI authority, the acquisition may be ordered null and void, obligating the parties to restore the situation to its pre-acquisition state.
Next Steps
A public consultation, based on a draft Investment Authorisation Act is expected to open in April 2026. The Government proposal for the new Investment Authorisation Act is anticipated to be submitted in September 2026, with the Act scheduled to enter into force in early 2027.
We will continue to monitor the legislative process closely and are happy to discuss any questions you may have regarding this reform and the Finnish FDI regime overall.
