Key Considerations ^ The Screening of Third Country Transactions Act (STCTA) of 2023 established Ireland’s first foreign investment screening regime (and gave effect to the EU Screening of FDI Regulation (EU) 2019/452). It entered into force on January 6, 2025. ^ The STCTA establishes a “process to allow for certain transactions that may present risks to the security or public order of the State to be reviewed by the Minister for Enterprise, Trade and Employment” (the Minister). ^ Unusually for FDI laws, the STCTA contains criminal provisions for failure to notify the Minister of a transaction, among other things.
FDI Regime Overview The STCTA creates a mandatory pre-notification and approval obligation on parties to any “transaction”– defined to include any acquisition, agreement, or other economic activity, including minority investments, resulting in a change in control of an asset in Ireland or the acquisition of any amount of interest in an Irish company – that meets the following criteria: ^ The transaction relates to or has an effect on sectors such as critical infrastructure (e.g., communications, energy, aerospace, transportation), critical technologies and dual-use items (e.g., semiconductors, artificial intelligence, biotechnologies), supply chain needs (e.g., energy, raw materials), access to sensitive information (e.g., personal data) and the freedom of the media; ^ An investor, or person connected to the investment, is from a “third country” (any country outside the European Union, European Economic Area and Switzerland); ^ Such person does not, directly or indirectly, control all the parties to the transaction; and ^ The cumulative value of the transaction (and other related transactions between the parties) is equal to or greater than €2 million in the 12 months prior to the transaction.
Transactions that result in the acquisition of shares or voting rights, rather than a change in control, do not require prior notification unless each of the four elements previously listed are met and the percentage of voting rights or shares shifts from: (i) an amount equal to or less than 25%, to an amount more than 25%; or (ii) an amount less than or equal to 50%, to an amount more than 50%. In practice, the scope of activities that trigger a notification obligation is interpreted broadly by the Minister. The Department of Enterprise, Trade and Employment (Department) indicates in its Guidance that a significant supply relationship with entities in the scope of one or more sectors of the Irish FDI regime may be sufficient to trigger a mandatory filing obligation. Due to the uncertainty and the absence of case-law, parties in borderline cases may decide to submit precautionary filings to achieve legal certainty.
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