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FDI Screening in Slovakia

FDI Screening in Slovakia

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New investment screening legislation entered into force on 1 March 2021. Under the new FDI regime the acquisition of a shareholding in certain designated entities or of the business of these entities needs to be reported and may be subject to approval of the Slovak Government.

This obligation applies regardless of whether the acquirer is a Slovak or foreign entity and also applies to indirect transactions, i.e. a change in the persons having a direct or indirect participation in the operator of critical infrastructure exceeding a 10 % shareholding or voting rights is eligible to be screened.

Legal basis

Legal basis and status of the FDI regime Act No. 45/2011 Coll., on Critical Infrastructure, as amended by Act No. 72/2021 Coll., as entered into force on 1 March 2021.

Filing requirement

The notification obligation is triggered upon the acquisition of a shareholding in certain designated entities (share deal) or the business of these entities (asset deal).

With respect to share deals, the law applies to investments exceeding 10 % (voting rights/equity) and investments that allow for the exercise of influence over the management of an operator, which is comparable to a 10 % share. In addition, the law applies to indirect acquisitions. This means that, for instance, a change in the persons having a direct or indirect participation in the operator of critical infrastructure exceeding a 10 % shareholding or share in voting rights is eligible to be screened.

Relevant sectors

The new law only applies to businesses designated as part of the critical infrastructure in the following industries:

  • mining;
  • electric power engineering;
  • gas;
  • petroleum and petroleum products;
  • pharmaceutical;
  • metallurgical; and
  • chemical.

The secondary law names such specific companies (currently there are around 20 entities falling under this regime).

Process and timetable

Competent authority: Ministry of Economy and the Slovak Government

Mandatory filing requirement: Yes

Filing deadline: The notification must be filed without undue delay. Until the review process is finalised, the exercise of rights and obligations under this transaction related to Slovak critical infrastructure is prohibited.

Responsibility for filing: Depending on the circumstances, the operator of the critical infrastructure itself, pledgee, liquidator, insolvency administrator, enforcement officer or other person authorised to transfer the business, or the person who is to acquire the critical infrastructure.

Sanctions: No specific sanction mechanism.

Length of the proceedings: The Ministry of Economy has 60 days to review the transaction, after which it will prepare a motion to the Slovak Government on whether to grant consent, to grant consent subject to conditions (like in the case of competition law proceedings related to merger control) or to prohibit the transaction. The Slovak Government does not have a specific time limit to adopt its decision.

By Michal Lucivjansky, Counsel, Schoenherr

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