New practice area: Foreign Direct Investments


In recent years, screening of foreign direct investments (FDI) has become a more significant factor in M&A and other international transactions. As the first Danish law firm, we have established a new practice area dedicated to FDIs.
In the past, FDI screenings have been most prevalent in the defence and military sectors. However, in recent years, many countries have expanded the scope of their screening mechanisms to address the possible risk of foreign investors gaining control of critical national industries. 

An EU regulation on screening of FDIs, effective on 11 October 2020, establishes a framework for cooperation between the Member States and the European Commission for screening of FDIs. The Regulation places, inter alia, an obligation on the Member States to share certain information about the national investments that are undergoing screening but also upon request information about national investments that are not subjected to a screening, thus allowing the other Member States and the Commission to provide comments, which the Member State must give "due consideration" to. 

In recent years, an increasing number of jurisdictions have tightened or proposed to tighten their national rules on foreign investments. The trend has been accelerated by the COVID-19 pandemic, which have increased focus on national security of supply and dependence on critical infrastructure, etc. It is a new and different regulatory landscape, we find ourselves in”, says Christian Lundgren, partner in Kromann Reumert and head of the new practice group. 

Our expectations for the Danish screening system

Denmark currently has no cross-sectoral screening system. Today, the Danish Act on War Materials is the only act addressing FDIs directly. 

However, the Danish government is expected to submit a specific proposal to the Danish Parliament in 2020/2021. We expect that the framework for such new regime will reflect the new EU rules with particular focus on specific sectors of critical importance to Denmark, including utilities, critical infrastructure, companies that process substantial amount of personal data, and – in light of the COVID-19 pandemic – likely also a number of important health and life science-related companies. 

For Danish businesses, investors, and advisers this means that certain transactions in the future will be subject to both notification and approval. 

The development will have significant impact on the way we handle certain transactions in Denmark, which FDI regulation already has in cases where we assist Danish businesses in acquisitions, etc. abroad. We have therefore decided to be “first mover” in the area in Denmark and have dedicated significant resources to develop this practice area.” says Christian Lundgren.

We have published an Insight that summarises recent trends in FDI regulation in Denmark and Europe. Here you will also find our recommendations on how to mitigate the risks and handle the uncertainty associated with these new screening systems. 

Read more.

Specialist advice

In Kromann Reumert, we have extensive experience in advising on all aspects of cross-border transactions, investments, and international trade across various sectors and industries. 

We cooperate with leading law firms all over the world, including firms from our Lex Mundi network. We are therefore in a unique position to assist Danish and international clients on FDI regulation. 

Our advice includes inter alia:


  • Conducting cross-border FDI screenings 
  • Structuring transaction to mitigate FDI concerns
  • Process planning and project management 
  • Drafting FDI notifications and assistance in obtaining approval, including preparation of remedies

Read more about the practice area.