Finland’s FDI Reform Reaches Parliament: 10 Key Features of the Government Proposal

Authors: Riikka Kuha, Minna Siekkinen, Mikko Huimala Read time: 8 min Luettavissa myös suomeksi

On 22 October 2026, the Finnish Government submitted its long-awaited proposal for a new Act on the Screening of Foreign Investments and Approval Procedures, which would replace the current Act on the Screening of Foreign Corporate Acquisitions (172/2012) in its entirety with a substantially revised framework.

Introduction

The proposal reflects both the EU’s recently renewed Foreign Investment Screening Regulation ((EU) 2026/1386) and Finland’s objective of safeguarding national security, military defence, security of supply and other functions vital to society, and foreign and security policy objectives, as the security environment has evolved rapidly in recent years. These national priorities also underpin several aspects of the proposal that go beyond the minimum requirements of the revised EU framework.

The key elements of the reform have been known since the publication of the draft government proposal earlier this year. Following a public consultation process during summer 2026, the final proposal now provides the clearest picture to date of Finland’s future investment screening framework and the extent to which stakeholder feedback has been reflected in the proposed regime. While a number of refinements and clarifications have been introduced, the core policy choices underpinning the reform remain largely unchanged.

10 Key Features of the Final Proposal

The final proposal introduces a number of significant changes to the current Finnish investment screening regime, some of which have attracted particular attention during the legislative process and consultation round. The most notable aspects of the proposed framework are outlined below.

1. The objects of screening — clarification and expansion

The current regime already defines the companies or businesses in the scope of screening by reference to an entity’s activities, products, or services but does so through three broad, general categories: defence industry entities, security sector entities, and other entities critical to society’s vital functions. The proposed framework retains this underlying approach but replaces the three general categories with eight more granular ones. The objects of screening are foreign investments into a company, business unit, or other entity whose registered domicile is in Finland and whose activities, products, or services meet one of the categories listed (at a high level) below:

1. production or supply of, or intention to produce or supply, defence materiel or other products or services important to military defence or Finnish defence industry;
2. export or transfer of export-controlled dual-use items produced in Finland;
3. utilisation, development, or processing of export-controlled dual-use items in Finland;
4. production or supply of products or services critical to the statutory functions of key Finnish security authorities;
5. access to confidential or classified information, data material, or data resources relevant to national security, comprehensive security, or security of supply;
6. production or supply of ICT and information security products or services relevant to national security, comprehensive security, or security of supply;
7. activities, products, or services relating to security of supply, critical infrastructure, or vital functions of society; and  
8. activities subject to mandatory screening under the revised EU FDI Screening Regulation ((EU) 2026/1386)1.

While the list of screened activities is considerably more detailed than under the current law, the practical impact is likely to lie more in clarifying and codifying existing screening practice than in materially expanding the scope of screened activities — though the EU Screening Regulation does bring new sectors into scope, such as semiconductor, quantum and artificial intelligence technologies, and critical raw materials. By contrast, the proposed extension of screening to greenfield investments in a more limited set of activities represents an entirely new dimension of the Finnish FDI regime (see Section 4 Greenfield investments below).

2. Expanding mandatory prior approval to all in-scope investments

Under the current regime, defence and security-sector acquisitions are subject to mandatory prior approval, while other acquisitions involving entities critical to the vital functions of society fall within a voluntary notification procedure. The proposal would abolish this distinction entirely, bringing all in-scope investments, including those involving critical infrastructure or other vital functions of society in sectors such as energy, transport, telecommunications, water supply, healthcare, and food production, which under the current regime typically fall within the voluntary notification procedure, within a single mandatory prior approval regime.

As a narrow exception introduced in response to consultation feedback, the proposal exempts EU-established or EU-registered alternative investment funds and equivalent structures conducting private equity investments, provided they are actually controlled by non-foreign investors and no foreign investor holds, directly or indirectly, at least 10 per cent of the fund’s voting rights or equivalent influence.

3. Removal of the EU/EFTA exception expands screening to all non-Finnish investors

Under the current regime, EU and EFTA investors are exempt from mandatory screening outside the defence sector. The proposal would remove this distinction, subjecting EU/EFTA investors to the same mandatory screening framework as third-country investors. The definition of ‘foreign investor’ would cover any non-Finnish individual or entity registered outside Finland. Furthermore, a Finnish-registered entity would be treated as a foreign investor if at least 10 per cent of the aggregate voting rights or equivalent actual influence is held, directly or indirectly, by a foreign investor.

The extension of screening to European investors represents a significant expansion of the regime’s scope and is also one of the most notable examples of the proposed national framework exceeding the minimum requirements of the EU screening regulation.

4. Targeted greenfield investments enter the screening

For the first time, Finnish FDI screening extends to certain greenfield investments, meaning that screening would capture investments into a newly established or soon-to-be-established company, business unit, or other entity whose purpose is to engage in defined activities. The proposal exhaustively describes the activities covered by the greenfield screening, including (at a high level) defence and dual-use goods; port and airfield infrastructure; logistics terminals serving the food supply, healthcare, liquid fuel, gas, hydrogen, or defence sectors, data centers of at least 100 MW or involving AI or quantum technologies, or other critical activities defined under the Act; energy projects exceeding the specified capacity thresholds (covering wind and solar power, other electricity generation or storage, hydrogen production, or district heating or cooling), including aggregated smaller projects, or licensed natural gas grid operations; and activities relating to the EU’s listed strategic raw materials.

As an entirely new category of screening, greenfield investments raised distinct interpretive questions during the consultation process, concerning, for instance, when the obligation to apply for approval arises and when ordinary business development crosses the threshold into a new approval-requiring activity. The final proposal addresses these questions in substantially more detail than the draft: screening would also capture an already-established entity that has not yet commenced operations, whose intention would be assessed through an overall evaluation of objective indicators such as business plans, financing decisions, project plans, or permit applications. The proposal also clarifies that an approval granted would cover the investor’s subsequent development of the target, provided that such development does not materially deviate from the activity described in the application. In the course of further drafting, the greenfield provisions were also refined, particularly as regards data centers, energy and hydrogen projects, and strategic raw materials.

Extending screening to greenfield investments represents another notable example of national regulation going beyond the minimum requirements of the EU screening framework.

5. Additional ownership thresholds

In addition to the existing thresholds of 10, 33.3, and 50 per cent, approval would also be required when an investor exceeds ownership or equivalent actual influence of 66.6 and 90 per cent. These thresholds align with the supermajority and squeeze-out thresholds under the Finnish Companies Act. Their purpose is to allow the review of subsequent increases in ownership or influence where the investor’s level of control increases significantly or the nature of the target’s business and customer relationships evolves over time.

6. A new two-stage review process

The proposal introduces a formal two-stage review framework. The first phase, handled by the National Emergency Supply Agency (NESA), would have a 45-day statutory deadline within which NESA must decide whether to approve the investment, decide not to screen it, or refer the case for a more extensive second-stage review by the Ministry of Economic Affairs and Employment (MEAE), which is subject to no statutory deadline.

7. Broader possibilities to impose conditions

Under current law, conditions may only be attached to an approval where necessary to safeguard a ‘particularly important national interest’. This requirement would be removed under the proposed legislation. Otherwise, however, the imposition of conditions would continue to be based on a case-by-case assessment and conditions could still be imposed only where the parties to the investment undertake to comply with them.

8. New mechanisms for non-compliant investments

The proposal introduces an explicit procedure for investments implemented without the required approval. Where a covered investment is completed without authorisation, NESA would direct the investor to file for approval or restore the situation to a lawful state. If neither happens within a set deadline, MEAE could declare the investment void and order restorative measures, such as requiring shares to be transferred back, prohibiting the exercise of voting rights, or barring the investor from board or executive positions in the target company.

9. From criminal fines to a significant administrative sanction

The proposal would replace the current criminal fine mechanism with an administrative sanctions payment regime. The payment could reach up to EUR 10 million or 10 per cent of a foreign investor entity’s global turnover, whichever is higher, or up to EUR 500,000 for a private person foreign investor. Administrative sanctions payments would be decided by a dedicated sanctions board operating in connection with NESA.

10. Entry into force and transitional provisions

The proposal is still subject to parliamentary approval, and its contents may still change during the process. The new law is intended to enter into force on 1 April 2027. Investments already completed, and applications or notifications already filed, before entry into force would remain governed by the current Act on the Monitoring of Foreign Corporate Acquisitions (172/2012).

Accordingly, investment planned around the 1 April 2027 cut-off may warrant particular attention from both a timing and regulatory perspective, as the applicable legal framework will depend on when an application or notification is filed.

Looking Ahead

Although the proposal remains subject to parliamentary review, its direction is clear: foreign investment screening is becoming relevant to a broader range of sectors, investors, and investments. Businesses should therefore begin assessing the potential implications now rather than waiting for the new rules to enter into force.

Foreign investors contemplating acquisitions, financing arrangements, or other investments in Finland should assess whether the proposed changes may affect investment structures, approval requirements, or execution timelines. Finnish companies operating in strategically important fields, such as defence and dual-use activities, critical infrastructure, technologies, and raw materials, should similarly consider how future financing rounds, strategic investments, ownership changes, and corporate transactions may be affected by the expanded screening regime.

We will continue to monitor the legislative process and provide updates as the proposal progresses.

[1] Investments in targets active in the areas of dual-use items; defence-related products; semiconductor, quantum, and artificial intelligence technologies; critical transport, energy, and digital infrastructure; critical raw materials; key financial-market actors; and electoral information systems