SWEDEN Trends and Developments Contributed by: Louise Rodebjer, Ólafur Steindórsson, Per Dalemo and Johannes Wårdman, CMS Wistrand
• water; • sewerage and waste; • energy; • construction of infrastructure; • finance and insurance; • road transport; • shipping and aviation; • security-sensitive operations; and • the defence industry.
was upheld by the Stockholm Administrative Court on appeal. By 31 December 2024, 1,377 notifications had been submitted. The pace has continued to accelerate dra - matically: during the first three quarters of 2025, 1,335 further notifications were received – with a record 499 notifications in Q3 2025 alone – bringing the cumula - tive total to approximately 2,710 by the end of Q3 2025. The European Commission’s 5th Annual Report on Investment Screening noted that Sweden alone accounted for over 40% of all FDI cases handled across EU member states in the reporting year, high - lighting the exceptionally wide scope of the Swedish regime by international standards. The overwhelming majority of notifications – approxi - mately 90% – are cleared in Phase 1 without further review. During the first three quarters of 2025, only 11 Phase 2 in-depth investigations were initiated, and five investments have been approved with conditions in total since the FDI Act came into force. Two prohibitions have now been issued, both alleg - edly relating to Chinese investments in greenfield bat - tery component manufacturing. At least one of these decisions has been appealed. Under the FDI Act, pro - hibition decisions are appealed directly to the Swedish government, not to the courts. Additionally, two noti - fications were withdrawn in 2025 after ISP indicated an intention to prohibit. ISP has been overwhelmed by the volume of filings, leading to long processing times and frustration among investors. Revisions to clarify and potentially narrow the scope of the legislation are being considered, reflecting concerns about the dis - proportionate regulatory burden on smaller investors and transactions that are plainly irrelevant to national security. The Swedish PSA Act The Swedish Protective Security Act ( säkerhetsskydd - slagen (2018:585) ) (the “PSA Act”) sets out a screen - ing process for certain transactions involving secu - rity-sensitive activities. The screening mechanism under the PSA Act specifically targets activities that are sensitive to Swedish security interests. Thus, the scope of the PSA Act is narrower than the screening mechanism under the FDI Act.
The buyer/investor is responsible for notifying ISP. However, the target company is obliged to inform the buyer/investor that the transaction is notifiable and to provide the investor/buyer with necessary information regarding the applicability of the FDI Act. A notification must be made before an investment is completed (ie, before an investor can actually exercise voting rights in, or influence over, the target company). The parties to a transaction can enter into an agree - ment regarding the investment before a notification is made, but the fulfilment of the agreement must be conditional on ISP not prohibiting the investment. Thus, a notification to ISP can be made after signing, but must be completed before closing. A notification should be made when the investment is imminent and when completion of the investment is in the near future. Documentation showing this (such as an SPA or an LOI) must be submitted as an annex to the noti - fication. Upon receipt of a complete notification, ISP will decide within 25 working days to either take no further action or to initiate an in-depth investigation. If ISP chooses to conduct an in-depth review, it must conclude the assessment within three months (extendable to six months under specific circumstances), after which it will make a decision to either sanction the investment, impose conditions or prohibit it entirely. While the obligation to notify does not depend on the nationality of the investor, only investments made by non-EU investors/buyers may be prohibited. The consequences for not filing or for filing too late by an EU investor/buyer are a fine, which may range from SEK25,000 to SEK100 million. ISP imposed its first administrative fine – SEK200,000 – in January 2025 for a late notification in the defence sector. This fine
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