Finland is preparing a significant reform of its foreign investment screening regime. On 3 June 2026, the Ministry of Economic Affairs and Employment opened a consultation round on a draft Government Proposal for a new Act on the Screening of Foreign Investments and Permit Procedures, informally referred to in Finnish legislative materials as the “Investment Permit Act”. According to the current legislative timetable, the final Government Proposal is expected to be presented in autumn 2026, and the new Act is intended to enter into force in spring 2027.

The proposed new Act would repeal the current Act on the Screening of Foreign Corporate Acquisitions. While Finland’s basic position remains open and positive towards foreign investment, the reform would move the regime from a relatively narrow corporate-acquisition screening system towards a broader, more systematic and more strongly enforced investment control framework.

The reform reflects two overlapping developments. First, Finland’s security environment has changed materially in recent years. Second, the EU is revising the Union’s FDI screening framework, which will require more harmonised national screening mechanisms, a minimum scope of mandatory screening and more structured cooperation between Member States. The European Parliament approved the new EU rules in May 2026, and the Council formally adopted the revised regulation in June 2026. The new rules are expected to apply 18 months after their entry into force.

From voluntary confirmation to mandatory advance permits

One important practical change is that the current voluntary confirmation route would largely be replaced by a mandatory pre-closing permit requirement for in-scope investments. Under the current Finnish regime, mandatory applications for advance confirmation mainly concern defence industry enterprises and certain security-sensitive companies, while other corporate acquisitions involving entities subject to screening may be notified voluntarily. Under the proposed new Act, if a foreign investment falls within the scope of the Act, the investor would have to apply for a permit before completion, and the investment could not be implemented before clearance.

This change is partly EU-driven. The Finnish proposal notes that the revised EU framework requires a mandatory prior-authorisation model for investments falling within the EU mandatory minimum scope. Finland has, however, chosen to implement the reform more broadly by bringing all investments falling within the national Act’s scope into a single mandatory pre-completion permit procedure.

EU and EFTA investors would no longer be largely outside the regime

Another major change is the investor test. The current Act focuses mainly on investors from outside the EU and EFTA, with important exceptions for defence-sector acquisitions. The new proposal would treat foreign investors more uniformly. In principle, all investors outside Finland, including EU and EFTA investors, could fall within the permit requirement where the target or investment is otherwise in scope. The proposal would also capture Finnish entities where a foreign investor has at least 10 per cent of voting rights or corresponding actual influence.

This is one area where Finland appears to go further than the EU minimum. The EU reform brings certain intra-EU investments into scope where the EU investor is ultimately controlled by a non-EU investor. Finland’s draft, by contrast, would not generally distinguish between EU/EFTA and non-EU/EFTA investors for in-scope investments. The stated rationale is clarity, equal treatment of in-scope cases and reducing the risk of circumvention through EU or EFTA structures.

The list of entities subject to screening becomes broader and more explicit

The current Act defines entities subject to screening at a relatively high level, including defence industry enterprises, companies producing or supplying critical products or services to Finnish authorities, and entities considered critical for securing functions vital to society. In practice, this has left much to case-by-case authority assessment. The new proposal would make the categories more explicit.

The new regime would cover, among other things, defence-related products and services, dual-use products and technologies, critical products or services supplied to Finnish authorities, targets with access to classified or otherwise security-relevant information, certain ICT and cybersecurity products and services, and activities linked to security of supply, critical infrastructure or other functions vital to society. The scope would also include the categories required by the revised EU FDI framework.

This matters for transaction planning. The reform is not merely about classic defence deals. It is likely to be relevant for infrastructure, data, energy, raw materials, cybersecurity and technology transactions, and for businesses that may not intuitively see themselves as “defence” or “security” companies.

Greenfield investments enter the screening regime

Perhaps the most visible conceptual expansion is the inclusion of certain greenfield investments. The current Finnish Act is built around corporate acquisitions and the transfer of influence in existing companies. The proposed Act would also cover the creation of new business in Finland in selected sensitive sectors, for example by establishing a new company, business unit or other entity.

The Finnish proposal keeps this extension targeted. Greenfield screening would apply in specified areas such as defence, dual-use manufacturing or development, port and airport infrastructure, port operation and cargo handling, ground handling services, certain logistics terminals critical for security of supply, large data centres, energy infrastructure projects, electricity network operations and strategic raw materials activities.

While greenfield investments fall within the revised EU regulation’s overall scope, they are excluded from the mandatory minimum scope for prior authorisation. Finland’s targeted inclusion of selected greenfield investments therefore goes a step further than the EU minimum requirement.

New ownership thresholds and earlier trigger analysis

For acquisitions of existing Finnish targets, the proposed Act would retain the familiar 10 per cent, 33.3 per cent and 50 per cent review points, but add new thresholds at 66.6 per cent and 90 per cent. A permit would be required before completion when the foreign investor crosses these thresholds or otherwise obtains corresponding actual influence. For in-scope greenfield investments, a permit would be required where the investment gives the foreign investor at least 10 per cent ownership or corresponding actual influence.

This would require more careful monitoring of follow-on investments and incremental increases in ownership. A transaction that was cleared at 50 per cent may not be the end of the analysis if the investor later moves towards full ownership or if the target’s business becomes more security-sensitive over time.

A two-stage process with the National Emergency Supply Agency at the front line

The institutional set-up would also change. Under the current Act, the Ministry of Economic Affairs and Employment acts as both the screening authority and the national contact point. Under the proposed Act, the National Emergency Supply Agency would become the first-stage permit authority and would take over the role of national contact point. The Ministry of Economic Affairs and Employment would remain responsible for second-stage, more in-depth reviews and could also take over a first-stage case if the significance of the matter so requires.

The first-stage review would have to be completed within 45 calendar days once the authority has received all information needed for the assessment. Cases that cannot be cleared at that stage would move to the Ministry for deeper review, including a fuller assessment of the investment’s effects on comprehensive security and other protected interests. This two-stage structure and the 45-day initial review period are among the clearest elements flowing from the revised EU framework.

Non-compliance would carry more significant consequences

The current Act relies on criminal fines for certain infringements, which has been seen as a relatively weak tool, especially for corporate investors. The new proposal would introduce an administrative penalty payment for implementing an in-scope foreign investment without the required permit. For legal persons, the maximum penalty would be the greater of EUR 10 million or 10 per cent of the investor’s worldwide annual turnover. For natural persons, the maximum would be EUR 500,000.

The proposal would also introduce a clearer mechanism for dealing with unauthorised investments. If an investor does not submit a permit application or restore the investment to a lawful state when required, the Ministry could declare the investment void and order unwinding measures. Such voidness would not, however, automatically affect the rights of third parties.

What should investors and targets take away?

The proposed Act would retain broadly the same protected interests as the current Act, although the current Act’s term “key national interest” would be removed and the relevant interests would be expressed directly in the purpose and assessment provisions. The more important change is procedural and practical: many more investments would come before the authorities before completion.

The reform would affect not only acquisitions by non-EU investors, but also EU and EFTA-led deals, follow-on investments, and certain greenfield projects in sectors such as defence, data, energy, logistics, infrastructure and raw materials.

For deal teams, this means FDI analysis should move earlier in the transaction timetable. It will no longer be sufficient to ask whether the target is a defence company or whether the buyer is from outside the EU. The more relevant questions will be whether the target, project, technology, data access, customer base or infrastructure role brings the investment within the new Act — and whether the timetable allows for a mandatory pre-closing permit process.

In that sense, the Finnish reform is best understood as part of a wider European trend: foreign investment remains welcome, but the perimeter of security-based screening is expanding.