FDI & Investment Screening in Sweden: Requirements, Scope & Key Considerations
What is important to know in relation to Investment screening (FDI) in Sweden?
Sweden has the most far reaching scope of investment controls in the EU which means that all transactions should be scrutinized early in the process to avoid surprises and delays.
Foreign direct investments in Sweden are subject to the Screening of Foreign Direct Investments Act, which has applied since December 2023 and requires mandatory notification to the Inspectorate of Strategic Products (Sw. Inspektionen för strategiska produkter, ISP) when an investor acquires influence in a business considered essential to national security, public order or public safety. Notification is required when voting thresholds such as 10, 20, 30, 50, 65 or 90 percent are reached, or when influence is gained through agreements or board representation. The system is intentionally broad and can also capture domestic transactions, including intra‑group reorganizations, if the operations are classified as worthy of protection. The regime complements the Protective Security Act (Sw. Säkerhetsskyddslag (2018:585)), which governs acquisitions involving security-sensitive activities and further frames Sweden’s national security considerations.
From a practical perspective, companies should incorporate an early screening of whether the target business is active in a protected sector and whether the transaction meets voting thresholds or otherwise grants influence. This assessment should be conducted at the outset of any transaction, as a standstill obligation applies until the ISP has issued its decision. Internal restructurings should not be overlooked because they may also trigger notification requirements. By integrating this review into the due diligence and transaction planning phases, organizations can avoid delays, ensure compliance and manage regulatory risks more effectively.
The Expert
Lawyer & Partner, Head of the International Commercial & Trade Group Baker McKenzie