FINLAND Trends and Developments Contributed by: Anna-Stéphanie Roubier, Johanna Kauppinen and Milja Vuopio, HPP Attorneys Ltd
issues pursuant to the national FDI legislation came significantly under scrutiny during the COVID-19 pan - demic, with the focus very much on medicines and personal protective equipment. By early 2022, the focus had widened, and there has been increased regulatory interest in the energy and other critical raw materials sectors – in addition to the obvious interest in defence and security sector acquisitions. The Finnish rules on FDI control are contained in the Act on the Screening of Foreign Corporate Acquisi - tions (the “Screening Act”) of 2012, which replaced its predecessor passed in 1992, and in the Act on Transfers of Real Estate Requiring Special Permission of 2019, which applies exclusively to the acquisition of real estate. The Screening Act is premised on a clear demar - cation between mandatory, pre-closing approval of foreign corporate acquisitions and Finnish corporate targets (or business operations) active in the defence and security sectors. Voluntary pre- or post-closing approval applies to corporate acquisitions in other sectors that may be deemed critical for securing vital societal functions. This approval is wide, vague and expressly time- and situation-specific, to reflect any particular prevailing societal circumstances. In the defence sector, the legislation applies to all non-Finnish registered or domiciled “foreign inves - tors”, while for security sector acquisitions and the voluntary “other sectors” regime, a “foreign investor” is a non-EU or non-European Free Trade Association (EFTA)-registered or -domiciled person. The applica - tion of the Screening Act is triggered by the acquisi - tion of at least one tenth, one third or one half of the aggregate votes conferred by all shares, or by acquir - ing a corresponding share of de facto control over a Finnish target. The Screening Act has been applied for well over a decade, and the number of notifications has steadily increased since the late 2010s. Legislative proposals at the EU level, namely the proposed EU regulation on FDI screening, and changes in the security situa - tion have called for a re-assessment of the scope and application of the national rules. To this end, a work - ing group was appointed in March 2025 to assess
the need to review the Screening Act. A background memorandum on the reform was published in Febru - ary 2025, in which the following issues, among others, were identified: • The framework for distinguishing between man - datory and voluntary approval regimes should be abandoned and replaced by a single and uniform, ex ante, pre-closing screening system of notifiable foreign corporate acquisitions. • Critical infrastructure, including service infra - structure, should expressly fall within the ambit of the new regime. To date, the Finnish screening authority, the Ministry of Economic Affairs and Employment of Finland (the “Ministry”), which has a co-ordinating role with respect to the Screening Act, has reviewed notifications relating to renewa - bles projects. To the extent that such projects have involved “foreign investors”, the Ministry has indicated its interest, particularly in cases where a project has significant future electricity generation capacity. Ultimately, however, notifications relating to such projects have been found to be outside the scope of the current legislation, given the absence, in the project phase, of links to the authorities (ie, no commitments from the Finnish authorities). In this respect, the proposal, while potentially increas - ing the administrative burden for both foreign investors and the regulator, would bring clarity and legal certainty regarding the application of the screening rules. • Aside from the defence and security sectors, as well as the critical infrastructure and infrastructure service sectors, the amendments would not intro - duce a sectoral list defining the ratione materiae of the screening legislation. Rather, based on the ini - tial views presented, the current, vague description of sectors that may be critical should be retained, given the inherent difficulty in drafting a compre - hensive sectoral list. A wider definition could be accompanied by decrees and guidelines clarifying the scope of application of the Screening Act. • Whether the screening rules should be extended to greenfield investments. Presently, greenfield investments have been excluded from the scope of the Screening Act. This has been premised, on the one hand, on the fact that there is no corporate acquisition (as opposed to the incorporation of a
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