Current Developments in Foreign Direct Investment Control

The German Federal Government recently prevented two Chinese acquisitions of shares in German technology and infrastructure companies for national security reasons. A legal framework for controlling foreign direct investment (FDI) exists in Germany since 2004, but it remains largely untested even after the two new cases, which were resolved without formal prohibition decisions. However, the Government's action in these cases stands for an increasing concern over China's growing influence on key industries. FDI control may thus become more relevant in the future. In line with a global trend to view foreign investments more critically, the Government is currently discussing to tighten the legal framework even further