Ministry of Economic Affairs and Employment monitors foreign corporate acquisitions
The purpose of the Act on the Monitoring of Foreign Corporate Acquisitions in Finland (172/2012) is to monitor and, if key national interests so require, to restrict transfer of influence to foreigners and to foreign organisations and foundations.
Key national interest mainly refer to
- national defence
- security of supply and
- functions fundamental to society.
Official matters concerning the monitoring and approval of corporate acquisitions are considered by the Ministry of Economic Affairs and Employment, which also requests opinions from other authorities to the extent necessary. The ministry must approve the corporate acquisition unless it potentially conflicts with a key national interest. If the corporate acquisition may conflict with a key national interest, the ministry must refer the matter for consideration at a government plenary session.
A positive attitude to foreign ownership is the guiding principle in the Act on the Monitoring of Foreign Corporate Acquisitions in Finland. However, the Finnish authorities can also exercise control over the ownership of companies considered essential in terms of the security of supply and national security and, if necessary, restrict foreign ownership in such companies.
When do corporate acquisitions require approval of the Ministry of Economic Affairs and Employment?
Under the law, corporate acquisition refers to activities as a result of which:
- a foreign owner gains control of at least one tenth,
- at least one third
- or at least one half of the aggregate number of votes conferred by all shares in the company, or a holding that otherwise corresponds to decision-making authority in a limited liability company or other monitored entity.
For a specific reason, the authority dealing with the matter (Ministry of Economic Affairs and Employment or the Government) may also oblige the buyer to file an application or a notification concerning a step to increase the buyer’s influence that will be taken after the consideration and that will not result in the exceeding of these limits.
All corporate acquisitions concerning the defence and dual-use sector always require advance approval by the authorities (application). In the non-military sector, the monitoring targets Finnish enterprises considered critical for securing vital functions of society.
In non-military corporate acquisitions that come under the scope of application of the act, the foreign owner may also submit the acquisition for advance approval of the Ministry of Economic Affairs and Employment if the acquisition has reached the stage immediately preceding the final conclusion (notification).
As regards the defence materiel industry, monitoring covers all foreign owners. In other sectors, monitoring only applies to foreign owners residing or domiciled outside the EU or EFTA.
There are no formal requirements for the layout of the application and notification submitted to the Ministry of Economic Affairs and Employment. However, the ministry has drawn up instructions for preparing the application/notification and these are set out in the appendix.
Decree of the Ministry of Economic Affairs and Employment on Chargeable Performances of the Ministry of Economic Affairs and Employment (1384/2019) has entered into force on 1 January 2020 and it will remain in force until the end of 2020. From 1 January 2020, a fee of EUR 5,000 will be charged for the processing of each application for confirming a foreign company acquisition.
Marjaana Aarnikka - marjaana.aarnikka(at)tem.fi
Lasse Puroma - lasse.puroma(at)tem.fi