The German government wants to take a closer look at takeovers of German high-tech companies from China, for example, in future. The cabinet approved an amendment to the Foreign Trade and Payments Ordinance on Tuesday. Essentially, it concerns new reporting obligations for investments in high-tech and future technology sectors, where German security interests could also be affected, emphasized the Ministry of Economic Affairs.

The group of companies that are considered particularly relevant to security when reviewing company acquisitions under foreign trade law is to be expanded. The background to this is also an EU regulation.

In future, the government will be able to review investments by companies from third countries in German companies, for example in the fields of artificial intelligence, semiconductors or quantum technology - from a share acquisition of 20% or more. The investment review would also apply not only to a first-time investment in a company, but also to subsequent, additional investments.

According to the Ministry of Economic Affairs, the government will only have to prohibit foreign direct investment in exceptional cases in the future. Germany is and will remain an open investment location. However, where security interests are affected, close scrutiny must be possible.

BDI criticizes "tighter corset for investors"

Criticism came from the Federation of German Industries. Wolfgang Niedermark, a member of the main management board, said that the German government was tightening the corset for investors and companies with regard to state investment reviews. "It is a problematic signal for Germany as an investment location if the state tightens the approval requirement for investments from third countries for more and more companies, but we can understand some of the arguments for this."

According to Niedermark, the amendment addresses key concerns of German industry. Certain sub-sectors such as robotics should not be subject to a blanket review obligation. German industry welcomes the fact that in future the state will only review the acquisition of additional shares if defined thresholds are exceeded.

According to the ministry, the amending ordinance will come into force in a few days and will then be forwarded to the Bundesrat and Bundestag. According to the information provided, the Bundestag can repeal the amendment within four months. The approval of the Bundesrat is not required.