Investment screening refers to procedures by which government authorities in Germany monitor and evaluate transactions involving foreign direct investment (FDI). These screenings are meant to ensure that investments, especially those in security-sensitive or strategically important sectors, do not endanger national security or public order. Typically, they concern the acquisition of domestic companies or shares therein by investors from non-EU countries.

The legal basis for investment screening in Germany is outlined in the Foreign Trade and Payments Act (AWG) and the Foreign Trade and Payments Regulation (AWV). The Federal Ministry for Economic Affairs and Climate Action (BMWK) is authorized to examine and potentially prohibit acquisition activities if they could jeopardize the public order or security of the Federal Republic of Germany.

State Interests and Freedom Rights in Tension

These legal regulations and decisions can have economic policy implications. Global investment flows are crucial for the internationally interconnected German economy. State interventions in the freedom of capital movement and the fundamental right to property thus occur in a tense economic policy environment.

On matters of national security, politics takes precedence. However, overregulation threatens investment and thus economic growth and jobs. Government restrictions preventing companies, in whole or in part, from being sold to foreign investors should be well-founded and subject to judicial review. They must primarily serve to maintain public safety and order. Exercising proper judgment is therefore essential.

Statements by the DIHK

(only available in German)

DIHK statement on the draft bill amending the Foreign Trade and Payments Act and other legislation (PDF, 133 KB) (19 September 2024)

DIHK statement on the draft amendment to the 17th Foreign Trade Regulation (PDF, 212 KB) (26 February 2021)

DIHK statement on the draft amendment of the AWV (PDF, 179 KB) (30 April 2020)

DIHK statement on the draft bill for the First Act amending the Foreign Trade and Payments Act (PDF, 152 KB) (27 February 2020)