There is currently no operational FDI screening regime in Ireland. However, the Screening of the Third Country Transactions Act 2023 (the “FDI Act”) was signed into law on 31 October 2023 and the Irish Department of Enterprise, Trade and Employment (the “Department”) has indicated that the FDI screening regime is likely to become operational during the course of Q2 2024. 

The FDI Act sets out a framework to enable the Irish Minister for Enterprise, Trade and Employment (the “Minister”) to review, for the first time, transactions involving foreign investment that may impact security or public order in Ireland. The FDI Act also grants the Minister the power to mitigate the effect of transactions in sensitive sectors identified as problematic or, if necessary, prohibit them outright. 

The Irish FDI regime will be focused on preserving the security and public order of Ireland in the context of investments from third countries.  See the response below to "On what grounds can enforcers review and block a foreign investment? How active have they been in the past 6 months?" for information on the factors to which the Minister will have regard in determining whether a transaction affects, or would be likely to affect, the security or public order of Ireland.

A “third country undertaking” is defined as any undertaking that is:

• Constituted or otherwise governed by the laws of a third country;
• Controlled by at least one director, partner, member or other person, who is a third country national or is constituted or governed by the laws of a third country; or
• A third country national.

A “third country” is defined as any country that is not a member state of the EU, a member of the EEA or Switzerland. Thus, for example, investments by UK and U.S. undertakings that meet the criteria for notification would be subject to the Irish investment screening regime.

The relevant matters for the purposes of the FDI Act reflect Article 4(1) of EU Regulation 2019/452 (the “EU FDI Regulation”). Therefore, the FDI Act applies to transactions that relate to, or impact upon, one or more of the following matters:

• Critical infrastructure, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defense, electoral or financial infrastructure and sensitive facilities, including the land/real estate used crucial for the use of such infrastructure;
• Critical technologies and dual-use items, including AI, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies, nanotechnologies and biotechnologies;
• Supply of critical inputs, including energy or raw materials, as well as food security;
• Access to sensitive information, including personal data or the ability to control such information; and
• The freedom and pluralism of the media.

The Act covers any transaction, acquisition, agreement or other economic activity resulting in a change of control of an asset in Ireland or the acquisition of all or part of any interest in an undertaking in Ireland. Such transactions are notifiable on a mandatory basis if they meet all of the following criteria:

• A third country undertaking (as described below), or a person connected with such an undertaking, as a result of the transaction:
  • acquires control of an asset or undertaking in Ireland; or
  • changes the percentage of shares or voting rights it holds in an undertaking in Ireland from (a) 25 percent or less to more than 25 percent; or (b) 50 percent or less to more than 50 percent;
• The transaction relates to, or impacts upon, one or more of the relevant matters as set out in the EU FDI Regulation;
• The same undertaking does not, directly or indirectly, control all the parties to the transaction (i.e., purely intra-group transactions will not trigger a mandatory filing); and
• The cumulative value of the transaction in question, as well as any other transaction between the relevant parties (or persons connected to them) in the 12 months prior to the signing of the transaction, is equal to or greater than an amount to be specified by the Minister (or, in the absence of specification, €2 million).

Yes – where a transaction meets all of the criteria set out above, it will be notifiable to the Minister on a mandatory basis.

The FDI Act also provides for the power for the Minister to call in transactions that do not meet the criteria for mandatory notification for a period of 15 months following completion. This power can be exercised where the Minister has reasonable grounds for believing that a transaction affects or would be likely to affect, the security or public order of Ireland.

Yes – the Irish FDI regime will impose a standstill obligation on the parties to a notifiable transaction that meets the criteria set out above.  Implementing the transaction prior to the Minister issuing a clearance decision (or being deemed to have done so under the provisions of the FDI Act) may result in a fine of up to €4 million and/or a term of imprisonment not exceeding 5 years.

Not applicable as the FDI regime is not yet operational.

Not applicable as the FDI regime is not yet operational.

The factors that the Minister will have regard to when reviewing transactions under the upcoming FDI regime include the following:

• Whether or not a party to the transaction is controlled (whether through ownership structures or by other funding) by a government (which reference to government shall include, the state bodies or armed forces of the third country concerned) of a third country and, where relevant, the extent to which such control is inconsistent with the policies and objectives of Ireland
• The extent to which a party to the transaction is, at the time the transaction is being reviewed, already involved in activities relevant to the security or public order of Ireland;
• Whether or not a party to the transaction has previously taken actions affecting the security or public order of Ireland;
• Whether or not there is a serious risk of a party to the transaction engaging in illegal or criminal activities;
• Whether or not the transaction presents, or is likely to present, a person with an opportunity to
  • Undertake actions that are disruptive or destructive to persons in Ireland, or enhance the impact of any such action,
  • Improve the person’s access to sensitive undertakings, assets, people or data in Ireland, or
  • Undertake espionage affecting or relevant to the interests of Ireland;
• Whether or not the transaction is likely to have a negative impact in Ireland on the stability, reliability, continuity or safety of one or more of the matters referred to in points (a) to (e) of Article 4(1) of the EU FDI Regulation;
• Whether or not the transaction would result in persons acquiring access to information, data, systems, technologies or assets that are of general importance to the security or public order of Ireland;
• Where applicable, comments of Member States and the opinion of the European Commission referred to in Article 6(9) of the EU FDI Regulation;
• The extent to which the transaction affects, or would be likely to affect, the security or public order of a Member State other than Ireland or of the European Union; and
• The extent to which the transaction affects, or would be likely to affect, projects or programs of Union interest within the meaning of Article 8 of the EU FDI Regulation.

As the regime is not yet operational, there is no enforcement record to date.

As set out in the response to "Please provide a short summary of the Foreign Investment Restrictions adopted by your jurisdiction." above, the Department has indicated that the FDI screening regime is likely to become operational during the course of Q2 2024.