Foreign Direct Investments

The Danish FDI rules are among the most far-reaching in the world. Many investments in and agreements with Danish companies in sectors considered to be particularly sensitive, made by foreign companies or individuals and foreign-controlled Danish companies, require prior authorisation.

The rules apply to Danish companies operating in particularly sensitive sectors, i.e. the defence sector, IT security functions and classified information processing, manufacturing of dual-use products, other critical technologies and critical infrastructure.

The rules cover both direct and indirect investments in the form of acquisition of or control over shares or voting rights, or so-called "equivalent control by other means," which includes, inter alia, asset acquisitions and long-term loan agreements.

The rules cover acquisitions of 10% or more of the shares, voting rights, or equivalent control by other means, as well as subsequent increases to or beyond 20%, 1/3, 50%, 2/3, and 100%. The rules also cover the establishment of new companies in the particularly sensitive sectors ("greenfield investments").

Additionally, the rules extend to "special economic agreements", which include certain joint venture, supplier, operation, and service agreements that entail decisive influence over the Danish company. This is, inter alia, considered fulfilled if the agreement is entered into for a longer period than 24 months or is irrevocable for a longer period than 12 months.

We have built up extensive experience in applying the Danish FDI rules and assist Danish and foreign clients on all aspects of the rules, including assessments of authorisation requirements, applications for investments in and special economic agreements with Danish companies in particularly sensitive sectors, pre-screening requests from both Danish companies and potential foreign investors, informal consultations with the Danish Business Authority, and process planning.

We also have extensive experience in screening for (possible) notification requirements in other jurisdictions, and if the screening shows that an investment or agreement will or may require authorisation in one or more other jurisdictions, we can facilitate contact with local counsel.

We have authored the chapter on the Danish rules on FDI screening in the International Bar Association's Foreign Direct Investment guide. Read the chapter here