German FDI screening, also referred to as German foreign investment screening or Investitionsprüfung, is a review by the Federal Ministry for Economic Affairs and Energy (BMWE) of certain acquisitions of German companies by foreign investors. It is not merger control. The test is not whether a transaction impedes competition, but whether it is likely to affect public order or security (öffentliche Ordnung oder Sicherheit).
For telecoms, cloud, data, media and digital infrastructure transactions, a filing can be mandatory even where the target is neither a defence company nor a classic critical infrastructure operator. For notifiable acquisitions, German FDI screening creates a statutory closing impediment: clearance or deemed clearance is required before the acquisition can be implemented. The FDI analysis therefore belongs before signing, not shortly before closing.
Table of Contents
German FDI screening: legal framework
The German regime is set out in the Foreign Trade and Payments Act (Außenwirtschaftsgesetz, AWG) and the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung, AWV). The key provisions are:
- § 55 AWV: scope of the cross-sectoral review, including asset deals, intra-group transactions and circumvention;
- § 55a AWV: catalogue of sensitive activities, investor-related factors and the mandatory filing obligation;
- § 56 AWV: voting-rights thresholds, follow-on acquisitions, attribution of voting rights and atypical control;
- § 58 AWV: certificate of non-objection (Unbedenklichkeitsbescheinigung);
- § 58a AWV: clearance of notifiable acquisitions (Freigabe);
- § 59 AWV: prohibitions and orders;
- § 59a AWV: acquisitions of listed securities via a stock exchange;
- §§ 60 ff. AWV: sector-specific review;
- § 14a AWG: review periods;
- § 15 AWG: legal effects of the transaction and restrictions pending clearance;
- § 18(1b) AWG: criminal liability for breaches of the standstill obligation.
A reform of the German investment screening framework has been announced in light of the new EU Foreign Investment Screening Regulation, including a standalone Investment Screening Act (Investitionsprüfungsgesetz). Until new German legislation enters into force, the AWG and the AWV remain the applicable framework.
This article reflects the AWG as last amended on 3 February 2026 and the AWV as last amended on 11 March 2026. Statutory provisions and guidance documents may still refer to the ministry by earlier names or abbreviations, in particular BMWK or BMWi.
Two regimes
| Cross-sectoral review (sektorübergreifende Prüfung, §§ 55 ff. AWV) | Sector-specific review (sektorspezifische Prüfung, §§ 60 ff. AWV) | |
|---|---|---|
| Investors covered | Investors from outside the EU and EFTA (Unionsfremde); EU/EFTA acquirers in cases of circumvention | Any non-German investor (Ausländer), including EU and EFTA investors |
| Targets | Broad range of sensitive activities, including infrastructure, telecoms, cloud, media, data and technology | Military goods, certain defence technologies, BSI-approved IT-security products for classified government information and defence-relevant facilities |
| Protected interest | Public order or security of Germany, another EU Member State or projects of Union interest | Essential security interests of Germany |
Most technology, media, telecommunications, cloud and data transactions fall under the cross-sectoral review. In 2025, the BMWE handled 339 national screening procedures. Information and communications technology was the largest target sector with 64 cases, and investors from the United States accounted for 159 cases.
When is a filing mandatory?
A filing is mandatory if a non-EU/EFTA investor directly or indirectly acquires a German company, or voting rights in it that reach the relevant threshold, and the target carries out an activity listed in § 55a(1) AWV. The direct acquirer must notify the BMWE without undue delay after signing, i.e. after conclusion of the agreement under the law of obligations (schuldrechtlicher Vertrag) (§ 55a(4) and (5) AWV). For public takeover offers, the notification is due without undue delay after publication of the decision to make the offer.
Three points of scope are often overlooked:
- Asset deals. The acquisition of a separable business unit, or of all essential operating assets of a company or business unit, counts as an acquisition (§ 55(1a) AWV).
- Intra-group transactions. There is no right of review where all parties are wholly owned by the same parent and have their place of management in the same third country (§ 55(1b) AWV).
- Circumvention. Acquisitions by EU or EFTA entities can be reviewed where there are indications of an abusive structure, for example a vehicle without meaningful business activity or permanent presence in the EU, or coordinated acquisitions that individually stay below the thresholds (§ 55(2) AWV).
The catalogue includes, among others:
- operators of critical infrastructure within the meaning of the German BSI Act, and developers or manufacturers of critical components or sector-specific software for critical infrastructure (nos. 1 – 2);
- companies obliged to take organisational measures under § 170 TKG, and manufacturers of equipment for lawful interception of telecommunications (no. 3);
- cloud computing services, if the infrastructure used reaches the thresholds of the BSI Critical Infrastructure Ordinance (no. 4);
- telematics infrastructure (no. 5);
- media companies that contribute to public opinion formation with particular topicality and broad reach (no. 6);
- services required for the functioning of state communication infrastructures (no. 7);
- AI-based goods that can be used for cyberattacks, disinformation, surveillance or the analysis of movement, location, traffic or event data (no. 13);
- IT-security products (no. 17);
- goods specifically designed for the operation of wireless or wired data networks, including transmission technology, network elements, network monitoring and network management products (no. 22);
- semiconductors, quantum technologies, autonomous vehicles and drones, smart meter gateways and certain healthcare products (among others).
The decisive question is the target’s actual activity, not its commercial self-description.
German FDI thresholds: 10%, 20% and 25%
| Threshold | Targets | Consequence |
|---|---|---|
| 10% | Activities under § 55a(1) nos. 1 – 7 AWV: critical infrastructure, lawful-interception obligations and equipment, cloud computing above the KRITIS thresholds, telematics infrastructure, media relevant to public opinion, state communication infrastructure services | Mandatory filing, standstill |
| 20% | Activities under § 55a(1) nos. 8 – 27 AWV, including security-sensitive AI, IT-security products, data-network equipment and semiconductors | Mandatory filing, standstill |
| 25% | All other sectors | No mandatory filing; ex officio review possible |
Acquisitions below these thresholds can still be reviewed where the investor obtains atypical control (atypischer Kontrollerwerb, § 56(3) AWV), for example through board seats, veto rights or information rights. § 55a(4) sentence 3 AWV expressly excludes such acquisitions from the mandatory filing obligation. They remain subject to ex officio review, which makes a voluntary application for a certificate of non-objection worth considering.
Follow-on acquisitions trigger a new review when the investor’s stake crosses a further statutory step (§ 56(2) AWV): 20, 25, 40, 50 or 75% for targets in the 10% category; 25, 40, 50 or 75% in the 20% category; and 40, 50 or 75% for all other targets.
Voting rights of third parties are attributed to the acquirer where it holds a qualifying stake in them or has agreed with them to exercise voting rights jointly (§ 56(4) AWV). Joint exercise is presumed where the acquirer and another shareholder from the same third country are both controlled by that country’s government. Indirect acquisitions count where each intermediate holding reaches the relevant threshold (§ 56(5) AWV).
What if the filing obligation is unclear?
Digital and platform cases are often borderline. A service may not be a traditional media company but give broad access to current news. A software provider may not operate critical infrastructure but supply tools used to run or secure it. A telecoms supplier may not serve end users but provide network-management or surveillance-relevant components.
In such cases, a precautionary filing can be appropriate. It explains why the transaction is notified on a precautionary basis and why it raises no security concerns.
The outcome differs depending on classification:
- notifiable acquisition without concerns: clearance decision (Freigabe, § 58a AWV);
- non-notifiable acquisition: certificate of non-objection (Unbedenklichkeitsbescheinigung, § 58 AWV).
The two instruments exclude each other: a certificate of non-objection is not available where a notification obligation exists (§ 58(3) AWV). Both provide the legal certainty needed for closing, but they are legally distinct. A clearance can be made subject to the condition that further acquisitions of voting rights, even below the thresholds, are reported to the BMWE (§ 58a(3) AWV).
German FDI standstill obligation and closing restrictions
For notifiable acquisitions, German FDI screening creates a statutory closing impediment. The law distinguishes between the agreement under the law of obligations and the legal acts that implement it. Where the BMWE has a right of review, the agreement takes effect subject to a statutory condition subsequent: it lapses if the BMWE prohibits the acquisition within the statutory periods (§ 15(2) AWG). A legal act serving the implementation of the acquisition remains provisionally invalid (schwebend unwirksam) until the acquisition has been cleared, has not been prohibited within the statutory review periods, or clearance is deemed to have been granted (§ 15(3) AWG).
Until then, it is prohibited to exercise the voting rights attached to the acquisition and to disclose to the acquirer company information that relates to the security-relevant business areas of the target or that the BMWE has designated as significant (§ 15(4) AWG, § 59a AWV). Exercising voting rights or disclosing such information in breach of the standstill obligation is a criminal offence punishable by up to five years’ imprisonment or a fine (§ 18(1b) AWG).
Acquisitions of listed securities via a stock exchange may be settled before clearance if the filing is made without undue delay. Until clearance, however, the acquirer may not exercise the voting rights, and the information restrictions continue to apply (§ 59a AWV).
FDI therefore has to be reflected in the transaction documents:
- an FDI closing condition and a long-stop date that leaves sufficient buffer;
- cooperation covenants for the filing and information requests;
- rules on information exchange during due diligence and between signing and closing, for example clean-team arrangements;
- interim covenants that do not amount to premature implementation.
How long does the procedure take?
- Phase 1. The BMWE has two months to open a formal review procedure (Prüfverfahren). The period starts when the BMWE obtains knowledge of signing; receipt of a filing or of an application for a certificate of non-objection counts as knowledge (§ 14a(1) no. 1, (3) AWG). For public takeover offers, it starts with knowledge of the publication of the decision to make an offer (§ 14a(1a) AWG). If the BMWE does not open a review, the consequence depends on the classification of the case: for notifiable acquisitions, clearance is deemed granted; for non-notifiable acquisitions, a certificate of non-objection is deemed issued. Express clearance within this period is possible but should not be assumed in the timetable.
- Phase 2. If the BMWE opens a review, it may request further documents and information. Restrictions or obligations may only be imposed within four months after complete receipt of the relevant documents (§ 14a(1) no. 2 AWG). The BMWE can extend this period by three months in cases of particular factual or legal difficulty, and by a further month where defence interests are particularly affected (§ 14a(4) AWG). Both periods can also be extended with the consent of the direct acquirer and the seller (§ 14a(5) AWG). The four-month period is suspended while requested information is outstanding or while protective agreements are negotiated (§ 14a(6) AWG). For notifiable acquisitions, clearance is also deemed granted if the BMWE does not prohibit the acquisition or issue orders before these periods expire (§ 58a(2) AWV).
- Ex officio review and the five-year limit. The BMWE can also open a review on its own initiative, in particular for non-notifiable acquisitions. Once five years have passed since signing, a review can no longer be opened (§ 14a(3) AWG). A certificate of non-objection removes this uncertainty for the transaction concerned.
In practice, most cases end in Phase 1. Of the 339 national procedures opened in 2025, 139 (41%) ended within 30 days and a further 60 (18%) within 31 to 40 days. The BMWE opened a formal review in 31 cases. In 11 cases, the parties agreed to extend Phase 1, and the procedure then ended without a formal review. Restrictive measures were imposed in 8 cases (2%), and 11 further cases were closed with commitments before clearance. These figures are provisional: 45 cases from 2025 were still pending on 15 January 2026.
What does the BMWE assess?
The BMWE looks at the target, the investor and the transaction structure together. Relevant factors include:
- the investor’s ownership and control structure, including direct or indirect state influence;
- the financing of the acquisition;
- governance, veto and information rights;
- prior conduct relevant to public order or security, including sanctions, export-control or criminal-law issues;
- the strategic rationale of the acquisition;
- the target’s role in sensitive infrastructure, data flows or public-sector services;
- the substitutability and systemic relevance of the target’s products or services.
A good filing is factual and precise. It explains the business model, the sensitive interfaces and why the transaction does or does not create a security concern.
What if the BMWE has concerns?
If the BMWE identifies public order or security concerns, the case does not automatically end in prohibition. In the cross-sectoral review, the Ministry may prohibit the acquisition or issue orders to the parties involved and their affiliated companies in order to safeguard public order or security. In practice, concerns may also be addressed through commitments or protective arrangements before clearance is granted.
Possible mitigation measures depend on the risk profile of the transaction. They may include restrictions on access to sensitive information, governance safeguards, security protocols, supply or service-continuity obligations, restrictions on relocation or discontinuation of sensitive activities, notification obligations for future changes, or other ring-fencing measures.
For transaction documents, this matters. The SPA should allocate responsibility for dealing with information requests, negotiating possible commitments and accepting remedies. In sensitive transactions, the parties should decide in advance whether the acquirer must accept all measures required for clearance, only reasonable and proportionate measures, or no structural or operational remedies beyond a defined threshold.
Sector specifics in digital and regulated businesses
In digital and infrastructure cases, the security relevance rarely follows from market position. It follows from control over data, access, infrastructure, resilience or information flows.
Telecommunications
Telecoms transactions require a value-chain analysis. The target may provide end-user services, wholesale access, network operation, passive infrastructure, active equipment, network-management software, security products or surveillance-relevant components. “Active in telecoms” is not enough. The question is where the target sits in the technical and regulatory architecture.
Three catalogue entries are particularly relevant. A network operator can qualify as critical infrastructure (no. 1). Companies with lawful-interception obligations under § 170 TKG fall under no. 3, with a 10% threshold. Manufacturers of network equipment, network management and network monitoring products fall under no. 22, with a 20% threshold. Suppliers in the telecoms value chain are therefore often more exposed than their commercial profile suggests.
Classifications under telecoms regulation, such as significant market power, open-access obligations from subsidy schemes or operator status under the Telecommunications Act (Telekommunikationsgesetz, TKG), are not decisive for FDI purposes. They do, however, indicate where sensitive interfaces lie.
Cloud, hosting and data infrastructure
Not every SaaS provider is a cloud computing provider for FDI purposes. The analysis distinguishes between operating cloud infrastructure, providing hosted software, reselling third-party capacity and using cloud services internally. The more the target controls storage, processing, access rights or security-relevant workloads, the more carefully the filing obligation needs to be assessed.
Media, platforms and public opinion
The regime targets media companies that contribute to public opinion formation with particular topicality and broad reach. This is straightforward for publishers and broadcasters. For platforms, aggregators and distribution services, the questions are:
- Does the service provide access to current, opinion-forming content?
- Does it reach a broad audience?
- Does it exercise editorial, curatorial, ranking or access-related influence?
- Could the acquirer influence availability, ranking or access conditions after closing?
Artificial intelligence and data analytics
“AI platform” or “data analytics tool” is too vague for a filing. The filing should set out the use cases, the data processed, whether persons or groups can be identified, whether movement, location or traffic data are analysed, and which safeguards and customer restrictions exist. The task is to translate the technology into security-relevant capabilities.
Cybersecurity
Cybersecurity products can provide deep access to networks, credentials, vulnerabilities and incident data. The filing should identify the product category, deployment model, customer groups, remote-access and update mechanisms, and the sensitivity of the protected systems.
Public-sector customers
Public-sector customers do not automatically make a transaction sensitive. A municipal library is not an intelligence agency. Relationships with security authorities, emergency services, defence bodies, critical infrastructure operators or state communication systems are a different matter. The filing should separate ordinary public-sector customers from security-sensitive ones.
Do not argue an FDI filing like a merger filing
Deal rationales are usually framed in competitive terms: market entry, scale, customer base, data assets, platform effects. That language fits M&A documentation and merger control. In an FDI filing it can mislead.
FDI screening does not ask whether the acquirer becomes a stronger competitor. It asks whether the acquisition gives a foreign investor security-relevant influence. A rationale built on “access to data” or “control of a key platform” may be harmless in merger control and raise questions in FDI screening. In digital and infrastructure cases, it is often more accurate to describe the transaction in terms of investment, continuity, resilience, product complementarity and customer benefits, unless specific competitive facts are legally relevant.
Relationship with other regimes
| Regime | Authority | Question |
|---|---|---|
| FDI screening (AWG/AWV) | BMWE | Is the acquisition likely to affect public order or security? |
| German merger control (GWB) | Bundeskartellamt | Would the concentration significantly impede effective competition? |
| EU Foreign Subsidies Regulation (EU) 2022/2560 | European Commission | Do foreign financial contributions distort the internal market? |
| Sanctions and export control | Various | Are the investor, financing, products or customers restricted? |
The same transaction can trigger several of these regimes. Their tests, timelines and remedies differ. A transaction can be unproblematic under one regime and still require action under another, so all workstreams should start early and run on a coordinated timetable.
EU level: Regulation (EU) 2026/1386
Regulation (EU) 2026/1386 on the screening of foreign investments in the Union was adopted on 17 June 2026, published in the Official Journal on 26 June 2026 and entered into force on 16 July 2026. It will apply in full from 17 January 2028 and will replace Regulation (EU) 2019/452, subject to transitional rules. Certain institutional and preparatory provisions already apply.
The main changes include:
- every Member State must maintain a screening mechanism covering a common minimum scope of sensitive sectors and enabling review before completion of the investment;
- the concept of foreign investment extends to investments through EU subsidiaries controlled by foreign investors;
- the EU cooperation mechanism between Member States and the Commission is strengthened.
Until 17 January 2028, the existing cooperation framework remains relevant. How Germany implements the new Regulation will have to be assessed once the national reform has been adopted.
How is a filing made, and what must it contain?
Form and language
Filings, applications and the prescribed documents must be submitted electronically and in German, using the mandatory online form on the federal administration portal. Access requires an ELSTER organisation account. Attachments must be in common file formats without password protection, and templates published by the ministry must be used. Names written in non-Latin scripts must also be given in Latin characters. A foreign direct acquirer without an authorised representative in Germany must appoint a person in Germany authorised to accept service. (Allgemeinverfügung, BAnz AT 27.11.2023 B1)
According to the ministry’s own guidance, the completed online form is sufficient in many simple cases. In complex cases, an additional explanatory submission can avoid follow-up questions; it should not repeat the data already entered in the form.
Confidentiality
German FDI filings are not public register filings. The notification, the supporting documents and the Ministry’s decision are not routinely published. This is important for transactions where premature disclosure could unsettle customers, suppliers, employees or financing parties.
At the same time, confidentiality does not mean that the information remains only with the case handler. The Ministry may involve other competent German ministries and authorities and, where applicable, exchange information within the EU cooperation mechanism. Information exchanged in that framework is subject to confidentiality obligations under EU and national law.
For the parties, confidentiality also has a standstill dimension. Before clearance, the acquirer must not receive certain security-relevant company information relating to the sensitive business areas of the target. The filing process should therefore be aligned with due diligence, clean-team rules and the transaction’s information-sharing protocol.
Content of every filing
The general administrative order of 14 November 2023 requires, among other things:
| Topic | Required information |
|---|---|
| Target | Register data; managing directors and authorised representatives with personal data; detailed description of the business; all direct and indirect shareholders with qualifying stakes, including a chart; headcount; revenue for the last three financial years; business contacts with public bodies and the defence sector in the last five years; any security clearance or obligations to protect classified information |
| Classification | Type of procedure, applicable threshold, and every case group of § 55a(1) or § 60(1) AWV that may apply, with the underlying facts and the filer’s view on whether each is met |
| Transaction | Date of signing; purchase price in euros; type of acquisition; existing and acquired voting rights; purpose (in particular whether strategic); parallel procedures such as merger control, ownership control or FDI filings in other Member States |
| Acquirers | Direct acquirer and all indirect acquirers with qualifying stakes, including a chart; their business activities; all investor-related factors of § 55a(3) AWV, such as state control |
| Seller | Name, address and, for foreign sellers without a German representative, a person authorised to accept service |
Additional content once a formal review is opened
- the transaction agreement, or for takeover offers the offer document;
- a detailed description of the purpose and the post-closing business strategy, and how the acquisition may affect public order or security;
- planned changes, in particular relocation or discontinuation of activities in Germany and the EU;
- group structures, consortium agreements and joint ventures;
- the financing of the acquisition, with state or public funding shown separately;
- business contacts with public bodies in the last ten years, for the target and the acquirers.
Fees
The BMWE charges fees for procedures applied for on or after 1 January 2024. The direct acquirer is the fee debtor.
| Outcome | Fee (EUR) |
|---|---|
| Procedure ends in Phase 1 | 800 |
| Procedure ends in Phase 2 | 2,500 |
| Phase 2 extended by up to three months | 5,000 |
| Phase 2 extended by a further month (defence interests) | 6,000 |
| One-off increase where special protective measures are required | 10,000, 20,000 or 30,000, depending on effort and complexity |
The fee decision is issued together with the decision on the merits; in practice, the ministry sets payment within 30 days.
Checklist for deal teams
- Is the acquirer a non-EU/EFTA investor, or does the sector-specific regime apply?
- What voting rights are acquired, directly and indirectly, including attributed voting rights?
- Is it a share deal, or an asset deal covering a separable business unit or all essential assets?
- Are there board, veto or information rights amounting to atypical control?
- Does the target’s actual activity fall within a category of § 55a(1) AWV?
- Does the target operate, supply or support critical infrastructure, telecoms, cloud, cybersecurity, AI or media services?
- Does the target process sensitive data or serve security-sensitive customers?
- Is the acquirer state-owned, state-controlled or state-financed?
- Are there sanctions, export-control or foreign-subsidy issues?
- Does the SPA contain an FDI condition, a realistic long-stop date and cooperation covenants?
- Are standstill and information-sharing restrictions reflected in the deal process?
- Is the German-language filing prepared, including the ownership charts and public-sector contact lists, and is an ELSTER organisation account in place?
- Is the FDI workstream aligned with merger control and sector-specific regulation?
FAQ
Is German FDI screening the same as merger control?
No. Merger control protects competition; FDI screening protects public order and security. The same transaction can require both.
Is every acquisition of a German technology company notifiable?
No. The obligation depends on the investor, the voting rights acquired and the target’s actual activity under § 55a(1) AWV.
Who must make the German FDI filing?
The direct acquirer is responsible for the notification. The filing must be made without undue delay after signing, or, in public takeover cases, after publication of the decision to make the offer.
Can asset deals be caught by German FDI screening?
Yes. The acquisition of a separable business unit or of all essential operating assets of a company or business unit can be treated as an acquisition for German FDI purposes.
Can a digital platform be relevant?
Yes, if it controls access to sensitive infrastructure, data, media content, security functions, cloud or telecoms services.
Does clearance have to be express?
No. If the BMWE does not open a formal review within the statutory period, clearance or a certificate of non-objection is deemed granted, depending on the classification of the case. An express decision is usually preferable for closing certainty.
Can the parties close before clearance?
Not for notifiable acquisitions. Implementation acts remain provisionally invalid, and certain implementation steps are prohibited until clearance, deemed clearance or expiry of the relevant statutory review periods without prohibition.
Can a filing be made in English?
In principle, no. Filings must be made in German via the mandatory online form, and the prescribed information and documents must generally be submitted in German. This also matters once a formal review is opened and transaction documents are requested. In international deals, translations should therefore be planned for early, even if the ministry may deal pragmatically with individual foreign-language attachments in a specific case.
Are there fees?
Yes. A procedure that ends in Phase 1 costs EUR 800; a formal review costs at least EUR 2,500. The direct acquirer pays.
How long does a typical case take?
In 2025, 41% of national procedures ended within 30 days and 59% within 40 days. A formal review was opened in 31 of 339 cases.
Working with lead M&A counsel
We regularly act as German FDI and merger control counsel in transactions led by other M&A firms. In these mandates, we typically:
- prepare FDI questionnaires with separate sections for the acquirer and the target side;
- assess filing obligations under the AWV and the German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB) in parallel;
- prepare filings and handle communication with the BMWE and the Bundeskartellamt;
- align the regulatory workstreams with the SPA, the signing and closing timetable and the information-sharing arrangements;
- advise on remedy strategy and the allocation of FDI-related risk in the SPA where the Ministry raises concerns;
Because filings must be made in German and follow the ministry’s templates, the German workstream usually sits with German counsel even in international transactions. Our background in telecoms regulation, competition law and digital market regulation is particularly relevant where the target operates networks, platforms or data-driven services.
Conclusion
German FDI screening has become a standard workstream in digital, data, media, telecoms, cloud and infrastructure transactions. The question is not whether the target looks like a defence company. It is whether the acquisition gives a foreign investor influence over infrastructure, data, technology, services or information flows relevant to public order or security.
For straightforward cases, a concise filing is often sufficient. For regulated digital and infrastructure businesses, the quality of the factual explanation can make a material difference to whether the BMWE treats a case as routine or considers a formal review necessary.
