SWEDEN Law and Practice Contributed by: Corinne Ekman, Mikael Nagy and Joacim Kanstedt, Gernandt & Danielsson Advokatbyrå KB
In order for the FDI Act to be applicable, the fol - lowing conditions must be met: • the investee entity or any of its subsidiaries must be incorporated in Sweden; and • the transaction, irrespective of form (eg, green field investments, new share issues and acquisition of shares) must result in the investor: (a) acquiring at least 10% of the votes in the company (or increasing its existing stake to 20%, 30%, 50%, 65% or 90%); or (b) gaining influence over the investee – eg, by way of the right to appoint a board member or the right to influence the over - all business of the investee. Once it has been determined that the FDI Act applies, the process will, on a high-level, look as follows: a complete notification is filed with the Inspectorate of Strategic Products (ISP), after which an initial assessment (phase 1) is carried out by the ISP pursuant to which it has 25 busi - ness days to determine if an enhanced review (phase 2) is required. If the ISP deems that “phase 2” review is required, such review can
take up to three months to complete, extended by an additional three months if deemed neces - sary by the ISP. During the duration of the review period there is a standstill obligation until the ISP explicitly issues a no action letter or an approval (ie, no implicit approval when the statutory dead - line lapses). It should furthermore be pointed out that a transaction not subject to a mandatory filing obligation may nevertheless be “called-in” at the discretion of the ISP. During the period from 1 December 2023 until November 2024 (ie, the first year after the imple - mentation of the FDI Act), the ISP received 1,206 notifications for which an enhanced review was initiated in 24 cases, out of which 11 investments were approved without any conditions and five approved with conditions. The large number of transactions having been notified to the ISP is likely a result of the risk of hefty fines and trans - actions being considered null and void in case of non-compliance with the FDI Act, together with certain difficulties in determining whether a transaction is in fact notifiable under the Act, given its broad scope and a lack of clear guiding precedents from the ISP.
532 CHAMBERS.COM
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