New EU Rules on Foreign Direct Investment

The European Union has formally approved new measures to allow Member States to conduct FDI expertise in the EU to ensure security and public order. 

The European Union's single market has been recognized for the strength of its rules and the institutions governing the economy and the modernization of public relations. Indeed, it is impressive given how many protectionist barriers have been removed. Without supranational regulation, Europe today could be a fragmented space, consisting mainly of weak players. 

To ensure the effective operation of this market, legal, control, redistributive and other support mechanisms have been established.

If your company wants to invest FDI in the manufacturing or marketing of products in order to participate in the management of the enterprise in the EU, the IQ Decision UK team is ready to advise on investment activities through direct investment funds in the EU.

The draft resolution has been approved by the European Parliament and the European Council and will become law still this year. 

The key points of the resolution are as follows:

• EU Member States are empowered to verify FDI and will apply their own procedures for verifying direct investment in the EU. In doing so, they must notify the Commission of their inspection procedures.
• The Commission will be able to verify FDI if it considers that the investment “may affect projects or programs of interest to the European Union in terms of security or public order”, including where the project receives significant EU funding.

The Commission will not block FDI in EEC countries, but it can make recommendations to the member state on the FDI verification procedure.

Another important piece of news was that, following the EU initiatives, the United Kingdom proposed to replace the Financial Reporting Council with a new independent regulatory body.