Foreign Direct Investment Screening Mechanisms in Central Europe

On March 19, 2019, the European Union took a groundbreaking step in reshaping its approach to foreign investments with the enactment of EU Regulation 452. This landmark regulation, which came into full effect on October 11, 2020, introduced a Foreign Direct Investment (FDI) screening framework across all EU Member States. Its goal is to enable national governments to evaluate and monitor foreign investments in critical sectors, safeguarding key strategic interests from non-EU investors.

The FDI screening mechanism is designed with a dual objective: safeguarding the security and public order of the European Union while maintaining its position as an attractive and open investment destination. However, there isn't a standalone foreign investment screening procedure at the EU level. Instead, each of the 27 Member States is required to establish a comprehensive national FDI screening mechanism. Currently, 24 of EU Member States had already enacted FDI screening legislation.

Some countries in Central Europe, both EU Member States and countries that are not EU Members, have adopted a screening mechanism similar with the one envisaged by the FDI Regulation. This publication offers a detailed overview of the current FDI regimes in Central Europe. Currently, the following countries—Bulgaria, Czech Republic, Kosovo, Lithuania, Poland, Romania, and Slovenia—have implemented specific FDI legislation. In contrast, Albania, Croatia, Serbia, and Ukraine apply various regulations but have yet to implement a dedicated FDI regime.

We hope you will find this publication helpful to your work and will be pleased to connect with you to discuss the regulations and how we can support you in navigating them.