FINLAND Law and Practice Contributed by: Christoffer Waselius and Niko Markkanen, Waselius
Under the Act on the Screening of Foreign Corpo- rate Acquisitions (172/2012, as amended), a foreign buyer must apply for prior approval from the Ministry of Economic Affairs and Employment (MEAE) for an acquisition that would result in it holding at least one- tenth, one-third or one-half of the voting rights (or cor- responding actual influence) of a Finnish defence sec- tor (including dual-use) or security sector company. In addition, a foreign buyer may submit a notification to the MEAE for an acquisition resulting in the buyer holding at least one-tenth, one-third, or one-half of the voting rights (or corresponding actual influence) of a company or business holding a key position with respect to maintaining vital functions of Finnish soci- ety. A “foreign buyer” is defined as (i) a person, organisa- tion or foundation not domiciled in an EU or EFTA (European Free Trade Association) member state; or (ii) any organisation or foundation domiciled within an EU or EFTA member state in which a foreigner or entity referred to in (i) holds at least one-tenth of the vot- ing rights in the case of a limited liability company, or corresponding actual influence in the case of another entity or business. In the case of Finnish defence com- panies, the definition of a foreign buyer also includes entities domiciled in an EU or EFTA member state (other than Finland). The MEAE approves acquisitions resulting in the con- trol of these companies, unless the acquisition endan- gers key national interests, in which case, the matter is referred for consideration to the Council of State. The Council of State may either approve the acquisition or, if necessary due to a key national interest, refuse to approve it. Such interests include: • military national defence; • national security and public order; and • functions vital to society (including safeguarding critical infrastructure and security of supply). The MEAE may impose conditions on an acquisition if it is necessary to secure key national interests. The conditions must be accepted by the parties to the acquisition. If approval is not granted, the buyer must decrease its ownership to less than one-tenth (or less than one-third or one-half) of the shares in the com-
pany, and can only exercise the corresponding voting rights at a general meeting of the company’s share- holders or other relevant corporate body. In addition, foreign real estate acquisitions are sub- ject to a separate permit procedure under the Act on Real Estate Transfers Requiring Special Permission (470/2019, as amended). A permit from the Ministry of Defence is required before purchasing real estate if the buyer is: • a private individual without EU or EEA nationality; • a company or entity domiciled outside the EU or EEA; or • a company or entity domiciled in the EU or EEA in which a non-EU/EEA individual or entity holds at least 10% of the votes or equivalent actual influ- ence. 5.4 National Security Review/Export Control Finland conducts national security reviews of certain acquisitions under the Act on Monitoring Foreign Cor- porate Acquisitions (refer to 5.3 Restrictions on For- eign Investments ), where the Ministry of Economic Affairs and Employment may review transactions involving defence-related businesses or critical infra- structure and, if necessary to protect essential nation- al interests, impose conditions or block the deal. Export control regulations are well established. The Ministry of Foreign Affairs oversees export controls for dual-use items and technology under statutory supervision under the Act on the Export of Dual-Use Items (500/2024, as amended) and Regulation (EU) 2021/821. Exports of dual-use goods outside the EU require prior authorisation, and extremely sensitive items, such as nuclear materials, require authorisa- tion even for intra-EU transfers. The Ministry of Defence regulates defence materiel exports under the Act on the Export of Defence Mate- riel (282/2012, as amended). A licence is mandatory for exporting, transferring, transiting, or brokering defence materiel. Each application is assessed indi- vidually, and approval depends on alignment with Fin- land’s foreign and security policy and assurance that national security is not compromised.
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