New rules for FDI in the European Union

The EU issued new rules to enable member countries with the performance of the FDI expertise in order to guarantee security and public order.

As has been recognized, the single market of the European Union has strong rules and governing institutions as well as modernized public relations. It for sure makes an impression especially taking into account numerous protectionist barriers that were removed. If not for international regulation, modern Europe could be divided into pieces and consist of weak political actors.

The EU had the goal of an effectively operating market and, therefore, established legal, control, redistributive, and other support mechanisms.

For those who would like to invest foreign direct investments into the manufacturing or marketing of products with the intent of participating in the EU enterprise’s management, the team in COREDO is prepared to provide you with a full consultation on investment activities via FDI.

The European Parliament and the European Council have given their approval to the resolution draft which will become law next year. The resolution mainly states the following:

  • The members of the European Union have a right to pass a verification test on FDI applying their own procedures. Meanwhile, the state is expected to inform the Commission about how the inspection will be prosecuted.
  • The Commission is empowered to verify FDI when it views an investment as “able to affect programs or projects of interest to the European Union in terms of security or public order”. This includes projects that are to receive a substantial EU grant.

According to the resolution, the Commission will not block FDI in the countries of European Economic Community. Yet, it will deliver recommendations to the member states based on the FDI verification process.

In addition to this news, the UK followed the initiatives of the European Union and suggested a replacement of the Financial Reporting Council with a new regulatory body that would be independent.

To manage a company registration in the EU or the UK successfully, contact COREDO and arrange a consultation with our specialists. We will be happy to also advise you on FDI and long-term investment.