The draft bill of the Federal Ministry for Economic Affairs and Energy (BMWE) for a stand-alone Investment Screening Act (Investitionsprüfungsgesetz – IPG), together with an Investment Screening Ordinance (Investitionsprüfungsverordnung – IPV), has now also been officially published (link, German only). Comments on the draft may be submitted until 12 November 2026.
The reform has been longer in the making than expected. Its declared aim is a more user-friendly regime: the rules so far scattered across the Foreign Trade Act (AWG) and the Foreign Trade Ordinance (AWV) are consolidated in the IPG, whereas the mandatory filing triggers will in future be defined in the IPV (which can be amended by the BMWE without parliament). Practice that has evolved over many years is being codified. The draft is not a grand overhaul in the sense of a regime change. In particular, greenfield investments will continue to fall outside its scope.
Nevertheless, the reform will leave its mark in practice. The expansion of the circle of relevant investors and transactions will likely have more impact on deal practice than the BMWE’s sober explanatory memorandum suggests. The BMWE is on course for more than 350 national screening proceedings this year – and the reform is likely to push that figure even higher in the future.
A wider circle of relevant investors
End of EFTA privilege. Investors from Switzerland, Norway, Liechtenstein and Iceland have so far been treated in the same way as EU investors – a uniquely German approach. This now ends because the new EU Screening Regulation (EU) 2026/1386 defines every non-EU state as a third country. The German government’s efforts to persuade the European Commission to preserve equal treatment have (so far) been unsuccessful.
Nationality instead of residence. For natural persons, nationality will in the future be decisive (so far: only domicile). Only persons who hold exclusively German nationality and are domiciled in Germany will be treated as domestic investors outside of the scope of the German FDI screening regime. Dual nationals with a third-country nationality will be treated as non-EU investors, even if they have lived in Germany for decades; in the sector-specific regime (defence and IT security), even a second EU nationality suffices to trigger a mandatory filing. Thus, the dual nationality of a single shareholder may be enough to bring (otherwise) purely domestic investments within the scope of the German FDI screening regime.
Private equity and funds. The explanatory memorandum hints at a possible change in how the BMWE will view private equity and other fund structures. So far, the BMWE has in practice generally looked to the manager or PE firm (usually the general partner); passive investors without influence were generally not of interest to the ministry. According to the explanatory memorandum, however, it is now assumed for ‘fund structures’ as well that whoever bears the economic risk is also able to influence the exercise of the voting rights. This suggests a potential re-interpretation under which, in addition to the manager or general partner, the (passive) investors themselves could be treated as relevant holders or acquirers of voting rights, respectively. For funds with significant non-EU limited partners, this would add a new layer of analysis.
Changes to the relevant transactions
Atypical acquisitions even without voting rights. So-called atypical acquisitions of control, e.g. through guaranteed board seats or veto rights, are already caught today, but only in connection with an acquisition of voting rights. This requirement is being dropped. In the future, it will suffice if board seats or governance rights on their own confer influence equivalent to that of the relevant voting rights threshold.
In addition, the standard to identify circumventions becomes objective: it is sufficient that a structure has the object or effect of circumventing a screening review to bring it within scope; an intention to circumvent is no longer required.
Asset deals – including licences. Relevant asset deals will in the future extend to the acquisition of substantial parts of a company’s assets and also to assets located in Germany belonging to foreign companies – which may bring global carve-outs into scope where the German assets form a substantial part of the seller’s assets. The explanatory memorandum expressly states that this may include the grant of a licence. In the technology and pharmaceutical sectors, where value lies largely in intellectual property, licensing and cooperation agreements will increasingly require proper FDI due diligence.
Thresholds. The draft simplifies the entry thresholds. 10% now applies in the sector-specific regime (defence, IT security) and to the particularly security-sensitive listed sectors of the new listed-sector regime, in particular critical infrastructures. All other transactions – whether subject to mandatory filing or merely reviewable – are subject to the general threshold of 25% of the voting rights. For top-up acquisitions, the 20% and 40% thresholds are dropped; the 25, 50 and 75% thresholds remain and are being supplemented by a new 100% threshold, so that even buying out the last minority shareholders may require a filing. Special thresholds apply to listed targets, in particular an entry threshold of 15% instead of 25%; for top-up acquisitions, a 30% threshold is also envisaged, although the draft is somewhat unclear as to whether this would replace or supplement the general thresholds.
Intra-group restructurings. The exemption for intra-group restructurings is broadened and drafted more clearly. In particular, it will in future also apply in the sector-specific regime.
Procedure: more pragmatic, but not necessarily faster
A single ‘approval’. In all procedures, the BMWE will in future grant a uniform approval. In case of doubt, it will no longer matter whether a target falls within one of the mandatory filing triggers and whether a clearance or a certificate of non-objection is to be issued.
Review periods. The review periods are being adjusted, partly to align with the new EU Screening Regulation. In practice, we would not expect significantly shorter proceedings. Phase 1 is shortened from two months to 45 days. However, it no longer starts when the BMWE learns of the signing, but only once the complete filing documents have been received. Moreover, Phase 1 can no longer be mutually extended to avoid the opening of Phase 2 with all its consequences. Phase 2 is now up to 120 days (previously four months). The BMWE’s power to extend it by up to 90 days essentially remains, as does the option of a mutual extension (now, however, even against the seller’s will). In addition, information requests from the EU cooperation mechanism will now also stop the clock in Phase 2. For transactions that have not been notified, the period within which the BMWE can call them in will be three years from signing (currently five years).
Involvement of other ministries. Prohibitions will no longer require a Cabinet decision, only the consent of the Federal Chancellery, the Federal Foreign Office and the Federal Ministries of the Interior, Defence and Finance. Overall, the trend continues towards leaner coordination within the Federal Government, particularly for prohibitions.
More powers, more formality – and more publicity
More robust powers. The BMWE gains an expanded toolkit. Provisional measures – bans on exercising voting rights, information barriers, the appointment of a trustee or a gun-jumping prohibition – will in the future be available as soon as the BMWE learns of an impending signing, including during ongoing proceedings. This is of particular practical relevance for acquisitions not subject to mandatory filing, as the BMWE will in the future be in the position to impose ad hoc gun-jumping prohibitions in individual cases. The BMWE may request information from third parties such as customers or competitors, now also backed by fines. Information exchange with FDI screening authorities outside the EU (for example in the US or the UK) is placed on a legal footing for the first time.
Tougher sanctions. For the first time, a breach of the filing obligation itself will be subject to fines of up to EUR 100,000 (so far, only gun jumping itself was sanctioned). Negligent breaches of gun-jumping prohibitions, orders or prohibition decisions may in future be punished by fines of up to EUR 1 million; intentional breaches remain criminal offences.
Judicial review. Much hitherto unwritten practice is to be codified, e.g. substantive review criteria such as the outflow of know-how, loss of production capacity and technological sovereignty, the discontinuation of proceedings, or the use of English for exchanges within the EU cooperation mechanism. This formalises the procedure and is intended to make decisions more robust in court. In future, the Higher Administrative Court of Berlin-Brandenburg will decide at first instance.
Publicity as a break with past practice. The BMWE will in future be required to publish prohibitions and allowed to publish orders and agreements – including the names of the parties and the sector concerned. Following a series of leaks and growing public interest, the BMWE thus aims to regain ‘control over information’. This marks a break with the ministry’s strictly confidential approach so far.
Outlook: the real debate is probably yet to come
As regards the listed sectors triggering a mandatory filing, the BMWE has for now largely carried over the existing catalogue. It has been expanded mainly where the new EU Screening Regulation makes this mandatory: all dual-use items will in the future be covered, along with, among others, certain AI models, a broader semiconductor category and electoral systems. The expanded dual-use category alone will have significant impact: until now, dual-use items were covered only selectively, mainly in the nuclear and aerospace sectors. In future, the acquisition of any company that develops, manufactures or – and this is new – merely distributes dual-use items will be subject to mandatory filing.
Moreover, the catalogue of mandatory-filing sectors in the draft is unlikely to remain as it is. The other ministries’ wish list is likely long and going to tighten rather than relax the draft. The Federal Ministry of the Interior is understood to be interested in also capturing acquisitions by EU investors in critical infrastructure – which would, for the first time, bring EU investors into scope beyond defence and IT security; the Federal Ministry of Defence is clearly focusing more on security of supply and on suppliers important to the supply chain than solely on classification under the German Export List.
We would expect the new law to enter into force probably in the first half of 2027. It is set to apply to agreements concluded on or after a cut-off date in 2027 still to be defined; the EU Screening Regulation applies from 17 January 2028. Anyone planning transactions with a longer time horizon should, however, already keep these legislative changes in mind when negotiating long-stop dates as well as closing and cooperation clauses.
Our experts will be happy to advise you on all aspects of FDI screening and continue to closely monitor the legislative process.
(29 October 2026)