Starting from March 1st, a new law on the screening of foreign investments has taken effect, focusing primarily on the country’s security and protection of critical infrastructure. The state may prohibit investments and impose fines in the millions.
In addition to the existing sanctions concerning business transactions with companies from Russia and Belarus, this is yet another measure to bolster the scrutiny of investors from third countries. The new Act on the Screening of Foreign Investments introduces stricter oversight of entities outside Slovakia or the European Union or those based in the EU but controlled by entities from third countries.
Act No. 497/2022 Coll. on the screening of foreign investments and the amendment and supplementation of certain acts (“Foreign Investments Act”) came into effect on March 1st, 2023, and applies to foreign investments made after this date. It does not apply to investments made before this date. In addition to the existing restrictive measures, this new legislation is yet another reason for companies to conduct a thorough due diligence, to screen their contractual partners based in third countries and to keep an eye on the subject of the contracts they made.
Critical foreign investments subject to government screening
