Foreign investments in Finland are primarily regulated in the Act on Monitoring of Foreigners’ Acquisitions. A revision of the act has been proposed in Government Bill 272/2010 (the Revised Act).
The purpose of the Revised Act is to improve the Finnish Government’s possibilities to intervene with planned corporate acquisitions if compelled by a highly important national interest.
The proposed Revised Act would apply to all acquisitions as a result of which (i) a minimum of ten per cent of the voting rights in a Finnish defence industry company would be acquired by a non-Finnish acquirer; or (ii) a minimum of ten per cent of the voting rights in some other monitored entity would be acquired by a foreigner.
For the purpose of the Revised Act, an acquirer would be deemed to be
- ‘foreign’, if the acquirer is established outside the EU or EFTA area or an entity outside the EU or EFTA area owns a minimum of ten per cent of the voting rights in the acquirer or exercises corresponding factual control; and
- ‘non-Finnish’, if the acquirer is established outside Finland or a minimum of ten per cent of the voting rights in a Finnish acquirer is owned by, or corresponding factual control is exercised by, an entity established outside Finland (including EU or EFTA entities).
Under the Revised Act, acquisitions by non-Finnish acquirers of Finnish companies in the defence industry should be notified in advance to the Ministry of Employment and the Economy for approval. Acquisitions by foreign acquirers of other Finnish entities, which are critical for fundamental operations of society due to their field of activity, business or undertakings, would be subject to voluntary notification to the said Ministry. The threshold for such monitored entities would not be determined in the proposed act. Hence, the interpretation would in practice be left to the eventual discretion of the said Ministry and the Finnish Government.
The Ministry of Employment and the Economy would be obliged to approve a notified acquisition unless a highly important national interest may be jeopardised. In the latter case, the matter would be transferred to the Finnish Government and approval could be denied should a highly important national interest be jeopardised.