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In 2020, there were two major developments that significantly impacted the screening of foreign investments in Austria. First, in July 2020, a new regime on foreign investment controls replaced the existing (limited) foreign direct investment (FDI) screening mechanism. Second, Regulation (EU) 2019/452 (Foreign Direct Investment Screening Regulation) became applicable in October 2020, thereby initiating the establishment of the EU consultation mechanism to strengthen communication among Member State FDI regulators and enhance transparency of relevant foreign investments throughout the bloc.

For almost three years there have been political discussions in Austria around the necessity of strengthening Austrian controls on foreign investment. While these discussions slowed down during 2019, in the wake of the covid-19 pandemic, they gathered significant pace, bringing with them a shift in focus, which is now mainly on the pharmaceutical or healthcare and technology or digital sectors.

The result is a new Austrian foreign investment control regime with a significantly expanded scope of foreign direct investment controls both in terms of potentially sensitive economic sectors and types of transactions involving Austrian businesses that trigger mandatory FDI filings in Austria. More details on the scope and process are provided below, but it is fair to say that the new Austrian FDI regime is now one of the broadest foreign investment controls in Europe and the Austrian regulator is taking an active approach to imposing these rules.