DENMARK Law and Practice Contributed by: Thomas Weitemeyer, Pernille Nørkær, Jonas Høst and Jacob Kreutzmann, Moalem Weitemeyer
Outside the sensitive-sector scope, notification is vol - untary, but it can be advisable to seek legal certainty, particularly where the target’s activities may be close to the sensitive-sector definitions or where the investor structure is complex. This should be weighed against the possibility that the Danish Business Authority may, on its own initiative, initiate a review of certain non- notified transactions for up to five years after comple - tion where the transaction may be considered to pose a threat to national security or public order. 5.5 Procedure and Timelines The FDI/national security review is two-phased. Where the application is complete, Phase I must be concluded within 45 calendar days from the Danish Business Authority’s confirmation of completeness. If the authority opens Phase II, the review must gen - erally be concluded within 125 calendar days from the Phase II notice. In Phase II, the timetable may be adjusted where the authority requests additional infor - mation and later confirms the submission is complete. Most reviews are completed during Phase I. In practice, investment screening typically runs in parallel with merger control and any sector-specific approvals and is reflected as a separate condition precedent. As a result, long-stop dates are common - ly set to accommodate the statutory calendar-day timelines, with buffers for information requests and, in sensitive cases, potential escalation to ministerial decision-making. 5.6 Substantive Criteria and Risk Factors When assessing an investment under the Invest - ment Screening Act, the Danish Business Authority focuses on whether the transaction may pose a risk to national security or public order. A central element of this assessment is the profile of the foreign inves - tor, including its ownership and control structure, any direct or indirect state influence, the investor’s home jurisdiction and track record, as well as the transpar - ency of the ownership chain. The Danish Business Authority also places significant weight on whether the investment could grant the investor access to sen - sitive assets, data, technology or know-how, or other -
wise enable undue influence over critical infrastructure or strategically important business activities. Even where the likelihood of such risks materialising may be low, the Danish Business Authority typically considers potential worst-case scenarios. Any inter - vention is based on an overall, risk-based and propor - tional assessment, and will only occur where identified risks cannot be adequately mitigated. 5.7 Mitigation Measures, Conditions and Prohibitions The Danish Investment Screening Act allows the Dan - ish Business Authority to grant conditional approvals or to prohibit an investment or agreement. In practice, risk mitigation is typically addressed through conditions or undertakings tailored to the identified security concern. Common measures include governance restrictions (eg, limitations on board representation or veto rights), restrictions on access to sensitive information, ring-fencing of sensi - tive operations, local data handling or storage require - ments, and carve-outs or exclusions for security-rele - vant assets or activities. No public information on individual cases is available and detailed reasoning is generally not published. Based on available information and market practice, prohibitions appear to be exceptional, with most noti - fied transactions being cleared, sometimes subject to conditions where risks can be mitigated. 5.8 Enforcement and Sanctions The regime provides different enforcement tools. Fail - ure to notify where authorisation is required, or breach of conditions imposed in an approval, can result in orders to cease the infringement and may also lead to orders to unwind or terminate the investment or agreement. The Danish Business Authority has broad powers to request information and may conduct post-closing supervision to verify compliance with conditions. It can also review certain non-notified transactions on its own initiative, including after completion, based on a risk assessment.
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