Foreign investment ownership

The Private Investment Law and its investment regimes 

In Angola, the Private Investment Law (PIL) establishes the general principles and sources of private investment, the benefits and facilities granted to private investors, the criteria for access to such benefits and facilities, as well as the rights, rights and guarantees of private investors. 

Since 2018, there is no minimum value for private investments under the law, so it applies to private investments of any value, whether made by internal or external investors. 

The PIL indicates that the investor may freely opt for either scheme when presenting a Private Investment Project (PIP). The special regime enjoys more favorable benefits and the prior declaration regime provides for other types of benefits. In both cases, companies must be previously incorporated and the presentation of the Private Investment Registration Certificate at the time of incorporation is dispensable, since this document will be issued at the time of the decision of the private investment request by AIPEX (the competent entity according to the PIL), and it is this document that certify the decision to approve the said request. 

When registering a PIP, AIPEX is responsible for the verification of whether the object of the main activity of the PIP falls within the economic classification of the priority activity sectors. 

The PIL provides that investors who are covered by the law will enjoy the benefits and facilities provided for therein, which are as follows: 

• Benefits, which can be of (i) tax or (ii) financial nature:
  • Deductions from taxable income, accelerated depreciation and amortization, tax credit, exemption and reduction of tax rates, contributions and import duties, deferment in time of payment of taxes and other exceptional measures that benefit the investor;
  • Consists of access to credit, through the Executive's programs to support the economy, such as microcredit, interest subsidies, the public guarantee and risk capital for obtaining financing.
• Administrative convenience services (“Facilidades”) 

Amendment to the Private Investment Law  

AIPEX is the competent entity according to the PIL, and respective regulation, for the purpose of granting the above mentioned benefits (both tax and financial) and administrative convenience services. 

Law no. 10/21, of April 22, amended PIL, and made significant changes to the Private Investment regime, of which the following stand out:

• New obligation for investment projects regulated by special law to be registered with the competent institution, under terms to be regulated for the purposes of statistical control and attribution of the status of private investor;
• Within the scope of internal investments, the means of payment available to be used by foreign exchange residents must be available in the national territory (although with recourse to financing contracted abroad);
• Inward investment and foreign investment can be carried out using non-equity capital and foreign investment can also be carried out using raw materials (where permitted by law);
• Investors are now able to transfer abroad: i) dividends; ii) the proceeds from the liquidation of its ventures; iii) the indemnities due to it; and iv) royalties or other income associated with the transfer of technology, without the need for the Private Investment Project to be completely executed, maintaining only the obligation to pay the taxes due and the constitution of mandatory reserves;
• External investors and companies majority held by them are now eligible to resort to internal credit (under the terms of the legislation in force), before having fully implemented the respective Private Investment Project;
• Two impact factors were added for the attribution of benefits and facilities: i) Value of the investment; and ii) Number of jobs;
• The Contractual Regime is re-introduced, which is applicable to Private Investment Projects referring to any sector of activity in which a negotiation is carried out between the project promoter and the Angolan State, regarding the content and conditions applicable to the project.
• As a general rule, for the implementation of the Private Investment Project, investors are now exempt from obtaining provisional licenses and other authorizations from the Public Administration Bodies (OAP), the CRIP (Investment Registration Certificate) being sufficient for this purpose; and
• Without prejudice to cases in which it is considered essential to issue opinions, approvals, authorizations or the practice of other acts or formalities in the procedures applicable to investment projects, the OAP is obliged to comply with the deadlines established in the execution and implementation schedule Private Investment Project, under penalty of tacit approval.

• Foreign direct investment in Australia amounted to AUD1,026 billion at the end of 2020.
• The Federal Government reviews foreign investment proposals against the national interest on a case-by-case basis through the Foreign Investment Review Board (FIRB).
• The FIRB regime is governed by the following legislation:
  • The Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA);
  • The Foreign Acquisitions and Takeovers Regulation 2015 (Cth) (FATR);
  • The Foreign Acquisitions and Takeovers Fees Imposition Act 2015 (Cth); and
  • The Foreign Acquisitions and Takeovers Fees Imposition Regulations 2020 (Cth), and

is further supported by Australia’s Foreign Investment Policy dated 1 January 2021, which can be accessed here.

• Australia's thresholds for investment requiring FIRB approval depend on whether the investor is from a country which has a free trade agreement with Australia, and also on whether the investor is a government or non-government entity. In general, although some exceptions apply, foreign persons should notify the Australian Government before acquiring an interest of 20% or more in an Australian business or corporation that is valued above AUD289 million.¹
• Land rich corporations and trusts will be considered Australian land corporations/trusts where the value of their interests in Australian land exceeds 50% of the value of total assets. An acquisition of any interest in an Australian land corporation/trust requires notification where the relevant monetary notification threshold is met. If public infrastructure, such as a system or facility that provides generation, transmission, distribution or supply of electricity services, or supply of gas to the public is located on land held by Australian land corporation/trust a lower AUD63 million monetary notification threshold applies. Similarly, if vacant commercial land interests comprise more than 10% of the Australian land corporation/trust the total assets, a AUD0 monetary notification threshold applies.
• In an effort to strengthen Australia’s national security by scrutinizing investments in Australia, the FIRB regime underwent further significant reforms by introducing the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020 (Cth) and the Foreign Investment Reform (Protecting Australia’s National Security) Regulations 2020 (Cth) (Amending Legislation).
• The Amending Legislation came into effect from 1 January 2021 and varied Australia’s foreign investment regime by introducing (among other changes):
  • a "national security" test, in addition to the existing "contrary to the national interest" test;
  • a new category of “notifiable national security actions” which must be notified to FIRB for review regardless of the value of the investment, the nature of the investor (i.e. private, government or whether from a free trade agreement country) or whether those actions are otherwise significant or notifiable actions under the existing regime; and
  • and new “call in” power and “last resort” power for the Treasurer to call certain investments for review if the Treasurer considers the investment may pose a national security concern regardless whether they are proposed or already taken.
• The scope of the types of businesses covered by the “national security” test was also significantly expanded on 2 December 2021 following significant amendments to the Security of Critical Infrastructure Act 2018 (Cth) (SOCI Act) which expended the SOCI Act’s coverage from four sectors (electricity, gas, water and ports) to eleven critical infrastructure sectors including the energy sector (which includes electricity, gas, liquid fuel and power businesses and assets).
• Although each sector has certain prescribed criteria that limit the types of businesses and assets within the sector considered critical (e.g. thresholds relating to size, type of service, etc.), companies should seek advice before proceeding with any acquisition that may fall within any of these sectors, as the business or corporation may be considered a national security business for the purposes of FATA.
• On 22 July 2022, the Treasurer announced changes to the FIRB application fee regime, which effectively resulted in the doubling of application fees applying to foreign investment notifications and applications made after 29 July 2022. If a notice of a notifiable action was given or an application was lodged before 29 July 2022, the fee payable was the fee specified in the pre-29 July 2022 fee schedule. As a result of the new rules, foreign investors may incur significantly higher costs to invest in Australia.

Note 1: The monetary thresholds range depending on the percentage acquired, the nature of the acquisition and may be subject to exceptions. 

• In Austria the legislation on screening of foreign direct investment is based on the (Foreign) Investment Control Act (InvKG) at national level (mainly since 2020).
• At EU level the legislation is based on Regulation (EU) 2019/452, the FDI-Screening-Regulation, which mandatorily applies also since 2020.

• On the European level, Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 established a framework for the screening of FDI in the European Union.
• On the federal level, a legislative proposal to implement an FDI screening mechanism was submitted on 23 February 2021. This draft legislation is still pending. The draft legislation includes a notification obligation for foreign ( meaning non-EU) entities who are considering investing in a sector of strategic importance (subject to certain conditions). Following the notification, the minister responsible for economic affairs can either allow the investment, impose conditions, or block the intended investment. Blocking the planned foreign direct investment or the imposition of additional conditions can only be decided if this is necessary to protect national security or public order.
• On the Flemish level, an FDI screening is already in place. This mechanism consists of an ex-post screening mechanism of legal acts (e.g. a share deal) by Flemish governmental institutions, which give control or decision-making power to foreign (to be understood as non-EU and non-EEZ) entities.  In case a foreign entity would, following a certain legal act, acquire control or decision-making power over a Flemish public body, and if the strategic interests of the Flemish Community or the Flemish Region are thereby threatened (in particular where the continuity of vital processes is endangered, where certain strategic or sensitive knowledge is threatened to fall into foreign hands or where the strategic independence of the Flemish Community or the Flemish Region is endangered) then the Flemish Government may annul, suspend, or declare inapplicable such legal act.

Renewables companies that participate in the Brazilian power sector must be located in Brazil and incorporated under Brazilian laws. However, there are no restrictions regarding foreign participation in renewables companies, nor on any sort of foreign investments in renewables.

• Foreign investment into Canada is regulated pursuant to the Investment Canada Act (ICA). The ICA mandates that foreign investments be subject to either a notification requirement or a formal review process. The question of whether a foreign investment is subject to notification or review depends on several factors, although generally it is based on a monetary threshold.
• Where the investor is a resident of a WTO member state, investments will be subject to review if the investor directly acquires ownership and control of a Canadian business that has an enterprise value of CAD1.140 billion or more. For non-WTO investors, the threshold is CAD5 million.
• Special rules may apply for investments by state owned enterprises (SOEs).
• Any investment by a non-Canadian investor that is below the relevant monetary threshold (described above) will be subject to a notification requirement. 
• If an investment is subject to review, the investor will be required to satisfy the government that the transaction will be a "net benefit" to Canada. Some of the factors considered in assessing whether this is the case are as follows:
  • how the investment will impact competition within Canadian industry
  • the level of participation of Canadians in the Canadian business
  • whether the investment is consistent with Canada's economic and cultural policies
  • the impact of the investment on research and development, as well as productivity
  • the impact of the investment on Canadian employment and resources and
  • the impact of investment on services and parts produced in Canada.
• The approval process can take up to 45 days. While most transactions are ultimately approved, the government may require undertakings as a condition of the approval (such as maintaining or increasing production and employment in Canada).

• In general, Chilean law does not discriminate against foreign investors, who enjoy the same conditions as local investors. Indeed, there are no limitations on a foreign investor wholly or partially owning a Chilean company. Additionally, as a general rule, foreign companies and individuals can invest in all activities and sectors of the economy, with a few exceptional situations.
• Foreign investment in Chile is principally covered by two regulations:
  • Law No. 20,848 on foreign direct investments enacted on January 21, 2016, which sets out an elective legal framework for the protection of eligible foreign direct investment in Chile and abrogates the former regime established by Decree Law No. 600 of 1974; and
  • Chapter XIV (Chapter XIV) of the Compendium of Foreign Exchange Rules of the Central Bank of Chile (BCCH) which grants access to the Formal Foreign Exchange Market (Mercado Cambiario Formal)  in relation to investments over USD10,000 or its equivalent in another foreign currency. 
• From an international standpoint, foreign investments can also be governed by: Bilateral Investment Treaties (BITs) or Agreements of Reciprocal Promotion and Protection of Investments (APPIs) entered into by the State of Chile, and by the investment chapters of Free Trade Agreements (FTAs) to which Chile is a party. There are 31 Trade Agreements subscribed by Chile currently in force, which include Strategic Partnership Agreements, FTAs, Economic Complementation Agreements, and Partial Scope Agreements.

The Order n°2018-646 of August 1, 2018, on the Investment Code (the Investment Code) is the main legislative instrument governing foreign investment in Côte d'Ivoire. 

It provides several incentives aimed at facilitating foreign investment in the country. It guarantees fair and equitable treatment for foreign investors, unlimited access to foreign exchange, free transfer of assets subject to compliance with tax legislation, free access to raw materials, as well as a guarantee of repatriation of expatriate workers’ remuneration. 

Although foreign investors have no specific constraints to invest in conjunction with local entities, or to recruit local staff, the Investment Code defines specific incentives for foreign investors who willingly apply local content requirements.

The Investment Code provides tax credit for companies that apply local content requirements and invest a certain amount, depending on the geographical location where the investment is done. These advantages are provided for investments in the hospitality, agribusiness, health and agricultural sectors.

The Foreign Investment Screening Act (2021) is the main legislative instrument governing foreign investment in the Czech Republic. The Act implements the EU legislation, and it establishes rules for examination of certain foreign investments. This is due to protection of internal security of the Czech Republic.

This Act is aimed at investors whose ultimate owner comes from a non-EU country. The Act applies to investments where more than 10% of the Czech target company is acquired. And the sector must be important for security, public or internal order of the Czech Republic. If the company is engaged in the production of military equipment, selected dual-use goods, or belongs to critical information infrastructure, the investor will need approval before closing.

• New restrictions on direct foreign investments were enacted in 2021. In respect of renewable energy related assets, the consequence is that direct foreign investments into critical infrastructure and businesses related to industrial scale storage of energy, conversion of energy and transmission of energy will require prior approval from the Danish Business Authority.

• Prior authorization from the Minister of Economy is required for foreign investments if they are made in respect of certain "sensitive industries".
• Foreign investments in relation to technologies involved in renewable energy generation are subject to prior authorization from the Minister of Economy since January 1, 2022. 

In an effort to create an enabling environment for foreign investment, Ghana has promulgated some essential laws on investment. The main legislation is the Ghana Investment Promotion Centre Act, 2013 (Act 865) (“GIPC Act”). Some key elements of the Act are as follows:

• The 2013 GIPC Act establishes the Ghana Investment Promotion Centre as an agency to register, monitor and keep records of all business enterprises in Ghana.
• Under the GIPC Act, foreign investments are subject to the following minimum capital requirements: USD200,000 for joint ventures with a Ghanaian partner, who should have at least 10% of the equity; USD500,000 for enterprises wholly owned by a non-Ghanaian; and USD1 million for trading companies (firms that buy or sell imported goods or services) wholly owned by non-Ghanaian entities. The minimum capital requirement may be met in cash or capital goods relevant to the investment. Trading companies are also required to employ at least 20 skilled Ghanaian nationals.
• Ghana’s investment code excludes foreign investors from participating in eight economic sectors which are reserved for Ghanaians.
• The GIPC Act grants certain investment incentives such as free transferability of dividends and profits; personal remittances, immigration quotas and exemptions from certain duties and Taxes under the Internal Revenue Act and under the Customs Harmonized Commodity and Tariff Code.
• Special tax incentives may also be granted to foreign investors upon acquisition of Parliamentary approval.
• The GIPC Act also contains provisions dealing with the protection of investments, expropriation and dispute settlement. 

The Free Zones Act is another major piece of legislation which also contains provisions on investment.

Sector-specific laws further regulate investments in minerals and mining, oil and gas, industries within free zones, banking, non-bank financial institutions, insurance, fishing, securities, telecommunications, energy, and real estate. Some sector-specific laws, such as in the oil and gas sector and the power sector, include local content requirements that could discourage international investment. Foreign investors are required to satisfy the provisions of the GIPC Act as well as the provisions of sector-specific laws.

Investment in the power sector

In December 2017, Ghana introduced regulations requiring local content and local participation in the power sector. The Energy Commission (Local Content and Local Participation) (Electricity Supply Industry) Regulations, 2017 (L.I. 2354) specify minimum initial levels of local participation/ownership and ten year targets.

The regulations also specify minimum and target levels of local content in engineering and procurement, construction, post-construction, services, management, operations, and staff. All persons engaged in or planning to engage in the supply of electricity are required to register with the Electricity Supply Local Content and Local Participation Committee and satisfy the minimum local content and participation requirements within five years. Failure to comply with the requirements could result in a fine or imprisonment.

Outward investment

Ghana has no specific outward investment policy. It has entered into bilateral treaties, however, with a number of countries to promote and protect foreign investment on a reciprocal basis. A few Ghanaian companies have established operations in other West African countries.

Ghana has concluded the Bilateral Investment Protection and Protection Agreements (IPPAs) with 27 countries in total. Ghana has signed and ratified tax treaties commonly referred to as double taxation agreements with a number of countries as well.

There are generally no restrictions on foreign investment in Hong Kong. It does not distinguish in law or practice between investments by foreign-controlled companies and those controlled by local interests. Foreign firms and individuals can incorporate their operations in Hong Kong, register branches of foreign operations, and set up representative offices. There is no restriction on the ownership of such operations. Company directors are not required to be citizens of, or resident in, Hong Kong. Reporting requirements are straightforward and not onerous.

The Hungarian FDI regime has two legs:

• the 2018 FDI Regime introduced by Act LVII of 2018 and the related government decrees. The 2018 FDI Regime covers a national security-type screening in “classic” very strategic sectors (including defense, certain services under the respective Hungarian acts on electricity, natural gas, as well as the manufacturing of double-use products (in Hungarian: kettsfelhasználású termék), etc.). The Minister of Interior is in charge of the notification procedures;

• the regime introduced in 2020 in relation to the state of emergency (by Act LVIII of 2020 (“2020 FDI Act”) and related government decrees “2020 FDI Regime”). The 2020 FDI Regime covers a much wider array of sectors and activities, including retail trade, wholesale, manufacture of light metal packaging, aluminium production, manufacture of other chemical products n.e.c., manufacture of plastics in primary forms, manufacture of paints, varnishes and similar coatings, printing ink and mastics. The Minister of Innovation and Technology is in charge of the notification procedures.

• The Foreign Investment Attraction Committee (CAIE) was established by Decree Law No. 133 of September 12, 2014, (Sblocca Italia Decree – Article 30), which can avail itself of the participation of representatives of the central and territorial administrations involved in the investment project from time to time.
• The CAIE:
  • formulates proposals, including regulatory proposals, on the operational methods that can strengthen and make more effective the activities for attracting foreign investments, with the aim of increasing national competitiveness;
  • acts as an observatory on current policies and international trends in foreign investment and the attractiveness of the Italian system, promoting the dissemination of studies and research in these fields;
  • promotes links between central and territorial administrations and the diplomatic-consular network, through the member of the Ministry of Foreign Affairs and International Cooperation, to promote Italy as a country of destination for foreign investment in the international community.

• The control of foreign investment in Italy was governed by the Golden Power legislation. The Golden Power originally entered into force in 2012 and was limited to defense, national security, and infrastructure (e.g. transportation, energy, communications). It has recently been extended to additional strategic sectors (e.g. high technology, fintech, insurtech) following Law Decree 23/2020. The Golden Power is the special power of the Italian government to limit or stop foreign direct investments and corporate transactions involving Italian strategic assets. All transactions falling within the field of application of Golden Power must be reported in advance to the Italian Presidency of the Council of Ministers.
• To increase the flow of investment and new capital from abroad, recent measures have been taken to improve the environment for foreign companies and investors. The new National Transition 4.0 Plan is the main focus of the Italian Recovery Fund. This measure has two main objectives: to stimulate private investment and provide stability and certainty to businesses with measures that take effect from November 2020 to June 2023. In particular, the Plan envisages a greater focus on innovation, green investments and design activities.

Under the Foreign Exchange and Foreign Trade Act (the FEFTA), the inward direct investments from foreign investors in Japanese energy sector generally requires the prior filing with the Bank of Japan and they will be reviewed by METI and the Ministry of Finance.

In 2020, the Japanese government designated general transmission and distribution operators, transmitters and power producers with output capacity of 50,000 kW or more as core businesses by amending the FEFTA. Stricter requirements and narrower exemptions apply to investments in core businesses.

• The Investments Promotion Act, 2004 is one of the legislative instruments governing foreign investment in Kenya. It established the Kenya Investment Authority, which promotes and facilitates investments in Kenya. The Authority assists foreign investors by issuing investment certificates, assisting in obtaining any necessary licenses and permits, and assisting in obtaining incentives or exemptions under various tax laws in Kenya. It provides that a foreign investor is entitled to an investment certificate from the Authority if:
  • the application is complete and satisfies the applicable requirements under the Act;
  • the amount to be invested by a foreign investor is at least USD 100,00 or the equivalent in any currency; and
  • the investment and the activity related to the investment are lawful and beneficial to Kenya. 
• The Foreign Investments Promotion Act, Chapter 518 of the Laws of Kenya, gives protection to certain approved foreign investments in Kenya. It allows a foreign national who proposes to invest foreign assets in Kenya to apply to the Minister for a certificate that the enterprise in which the assets will be invested is an approved enterprise for purposes of the Act. It provides for protection from compulsory acquisition and permits the transfer of profits outside of Kenya.

• In regards to institutional and regulatory changes, the government created the Mauritius Renewable Energy Agency (MARENA) under the MARENA Act 2015. MARENA is empowered, among other things, to oversee and promote the development of renewable energy in Mauritius, including research and innovation.
• In 2017, the CEB Act was amended to allow CEB (Green Energy) Co Ltd, whose function is to promote renewable energy, to participate in power projects without having recourse to public procurement.
• It should be noted that non-citizens are still unable to hold more than 15% of shares in listed sugar companies without the prior written consent of the Financial Services Commission.
• Most renewable energy producers such as Alteo or Terra are listed sugar companies.

• The main investment legislation in Mozambique comprises:
  • Law n. º 3/93, of 24 June, (the “Investment Law)”;
  • Decree n. º 43/2009, of 21 August as amended by Decree n. º 21/202, of 13 April, (the “Regulations of the Investment Law”);
  • Law n. º 4/2009, of 12 January (the “Code of Fiscal Benefits”);
  • Decree n. º 56/2009, of 7 October (the “Regulations on the Fiscal Benefits Code”).
• Foreign investors with a project in Mozambique must register their project as well as the funds imported as FDI with the Bank of Mozambique (the Central Bank). This registration is carried out through their commercial bank. The funds from foreign direct investment must be registered at the commercial bank within 90 days from the entry of funds into Mozambique.
• There are four main investment incentives available in Mozambique:
  • Tax incentives;
  • Customs incentives;
  • Incentives related to the repatriation of capital invested and profits; and
  • Protection/guarantees provided by the Mozambican state for private property and investments.

European Union

Regulation EU 2019/452: EU Foreign Investment Screening Mechanism 

• Although the screening of Foreign Investment ownership still remains with the individual member states, this regulation gives the member states more options to keep foreign investors out of vital sectors such as ICT, Energy and military. Relevant provisions of the Regulation include:
  • Definition of Foreign Investment
  • Guidelines about collaboration between member states
  • Definition of investors (outside EU) 

National legislation

Electricity Act 1998

• Under this Act, any (direct or indirect) change of control over electricity generating installations with a capacity exceeding 250 MV must be notified to the Bureau Toetsing Investeringen, an office of the Ministry of Economic Affairs. The Minister will review whether the change of control may compromise public safety, the integrity of energy generation or the security of supply. If the Minister determines that such threat exists, the transaction may be prohibited, or conditions may be imposed which must be observed by the person or entity acquiring control.
• The review considers, among other things, the financial reliability of the acquirer, the transparency of its activities and the way in which it is managed. Also the acquirer’s track record will be examined with regard to guaranteeing safety and their technical expertise for the reliable operation of the relevant activities. 

Vifo Act

• The Wet veiligheidstoets investeringen, fusies en overnames (Vifo Act) entered into force on 1 June 2023. This law introduces a security test for investments, mergers and acquisitions that could pose a risk to national security.
• The security test applies to two types of companies with activities in the Netherlands: vital providers and companies that have sensitive technology. Vital providers are companies that carry out vital processes that are so important to Dutch society that failure or disruption can lead to major social disruption. Sensitive technology covers military and dual-use goods and technology, as well as certain highly advanced technologies.
• In relation to the energy sector, in particular certain heating networks, nuclear energy generators and companies active in natural gas exploration or gas storage are considered to be vital providers.
• Transactions that are in scope of the Vifo Act may only be completed after notification to, and approval by, the Bureau Toetsing Investeringen, an office of the Ministry of Economic Affairs. In its review of the proposed transaction, the Minister assesses whether it may pose a risk to national security. If there appear to be such risk, conditions may be imposed on the acquiring party or, if no other solution can be found, the transaction can be prohibited.

The Overseas Investment Office (OIO) assesses applications from overseas investors to make sure they meet the criteria in the Overseas Investment Act 2005 (Act).  Overseas people and organisations (more than 25% foreign-owned) wanting to invest in sensitive New Zealand assets must get consent before they do so.  Consent decisions are made by Ministers, with advice from the OIO, or by the OIO itself, under delegation from Ministers.

An “overseas person” requires the approval under the Act to acquire significant business assets and sensitive land. 

Significant business assets are assets in New Zealand that are valued at NZD 100 million or more.  Generally, overseas persons need consent (among others):

• to acquire a more than 25% ownership or controlling interest in an entity if either the consideration paid or the value of the shares or the value of the entity's assets (including its subsidiaries) exceeds NZD 100 million;
• where they intend expending more than NZD 100 million to establish a business in New Zealand before commencing the operation of the business; and
• to acquire property used in carrying on business in New Zealand if the total value of consideration provided exceeds NZD 100 million.   

Sensitive land includes land that is the fresh or seawater areas, the bed of a lake, land on islands (other than the North Island and South Island), residential land and non-urban land that exceeds five hectares. An interest in sensitive land requiring consent is a freehold estate, or a lease or any other 'interest' in land for a term of ten years or more (unless it is residential land), including rights of renewal that are not an exempted interest. Licences and easements over land are generally not interests in land requiring consent.

• The Companies and Allied Matters Act 2020 (“CAMA 2020”) is the principal law governing the formation and management of companies.  Under CAMA 2020, a foreign company intending to carry on business in Nigeria (except for companies exempted by the minister) shall be incorporated as a separate entity in Nigeria.
• The Nigerian Investment Promotion Commission Act (NIPC Act) established the Nigerian Investment Promotion Commission (the “Commission"). The Commission’s objectives include encouraging, promoting and coordinating investments in Nigeria. Section 17 of the NIPC Act provides that a foreigner may invest and participate in the operation of any enterprise in Nigeria. In addition, every foreign investor is guaranteed unconditional transferability of funds through an authorized dealer. Furthermore, an enterprise with foreign participation seeking to commence business in Nigeria shall first be incorporated under CAMA 2020 and registered with the Commission.
• The Industrial Development (Income Tax Relief) Act (“IDTRA”) provides tax relief with respect to certain industries upon issuance of a pioneer certificate. Section 1 of the IDTRA empowers the President to designate a list of  industries and products that may be considered pioneer industries. Conferment of pioneer status operates as a tax holiday for an initial period of three years which may be extended for an additional period of two years (i.e., 5 years in total).

Norway has a relatively new Security Law (in force 2019) – Lovdata. 

The authorities may screen investments in Norwegian businesses form a “national security” perspective. If anything is considered as a not insignificant (potential/actual) treath to Norway, an infrastructure/renewable energy project or investment may be denied or blocked by the Norwegian State. We have seen few examples in practice of this, but a Russian acquisition was stopped one year ago on these grounds. 

Should a foreign investor be subject to AIF-rules, please see legal requirements on Act on the Management of Alternative Investment Funds (PDF).

• The Legislative Decree No. 662 enacted in 1991 is the main legislative instrument governing foreign investment in Peru. It does not demand any regulatory requirements to make foreign investments in Peru. In this sense, foreign investments made in the country are automatically authorized.
• The Legislative Decree No. 757, Framework Law for Private Investment Growth, enacted in 1991 promotes the participation of foreign investment, so that there should be equal treatment in terms of exchange matters, prices, tariffs or non-tariff duties for national and international investors.

• Conducting business activity in generating electricity in Poland is a regulated activity. For installations that have installed capacity exceeding 1 MW, it requires an Electricity Generation License issued by the President of ERO. The licenses are granted for a period from 10 to 50 years.
• To obtain an Electricity Generation License, the applicant should meet a number of conditions, the fulfilment of which is examined in detail by the President of the ERO on the basis of the license application, the information contained in it and the documents attached. This information consists primarily of documents confirming the fulfilment of the conditions set out in the provisions of the Energy Law Act, as well as documents confirming that the applicant has adequate funds for the proper performance of its activity or can obtain them.
• To obtain the Electricity Generation License, the applicant must meet the conditions set out in Article 33 section 1 of the Energy Law Act, have its registered office on the territory of a Member State of the EU, the Swiss Confederation or a Member State of the European Free Trade Association (EFTA) – a party to the Agreement on the European Economic Area or Turkey.
• The examination of a complete application for the Electricity Generation License is a matter for the ERO and may take from 6 to 18 months. Completion of documents to the application by the applicant should take about 8 weeks.
• After obtaining an Electricity Generation License, the licensee should meet a number of obligations, the most important of which is the timely payment of the properly calculated license fee. Other obligations are mainly connected with reporting and providing information.
• Smaller installations do not require an Electricity generation License. For an installation with installed capacity over 50 kW but not exceeding 1 MW (small installation) the electricity producer is required to register in the register of small installation energy producers. Installations with installed capacity of under 50 kW do not require any registration or an Electricity Generation License.

Renewable energy

Portugal continues to be an attractive market for the development of renewable energy. However, decision-making tends to be bureaucratic and collaborative relationships with local companies are considered to be the most appropriate strategy to enter the Portuguese market. Any major project will mostly require some type of joint venture. A sustained local presence, product exposure, or track record in the renewable energy industry will also prove to be a major asset while the market continues to develop.

While on general terms there are no significant restrictions on foreign investment in Portugal, energy, being considered a strategic asset, is protected by means of Decree-Law no. 138/2014, dated 15 September. This means that the Council of Ministers may oppose to operations from which results in the acquisition of control from people or groups of people from third countries outside of the European Union and the European Economic Area (EEA). A shareholder that wishes to enter the Portuguese market by incorporation of a Company must file a request for a Portuguese taxpayer number, as well as for the directors of the company to incorporate. In case the shareholders or directors are non-EU citizens, they must also designate a tax representative. The remaining incorporation procedure follows the same steps as a national company.

At European level, Regulation 2019/452 of the European Parliament and of the Council of 19 March 2019, established a framework for the screening of foreign direct investments into the Union, referring to the investment’s potential effects on energy as one of the factors to determine if said foreign direct investment is likely to affect security or public order.

EU Regulation in relation to foreign investments

Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union (“FDI Regulation”), applicable as of 11 October 2020, provides the legal framework for the screening by EU Member States of foreign direct investment in the EU from a security and public policy perspective. Furthermore, the regulation provides requirements for Member States wishing to maintain or adopt a screening mechanism at national level.

In Romania, a draft Government Emergency Ordinance (“Draft GEO”) for the implementation of the FDI Regulation was repeatedly submitted for public consultation since 2020, most recently by the Romanian Competition Council, at the end of July 2021. The public consultation period ended on 15 August 2021 but the Draft GEO has yet to be formally adopted by the Government.

Under the Draft GEO, as it has been published by the Romanian Competition Council, investments by foreign individuals or entities (i.e. originating from a non-EU country) may be subject to prior FDI screening by a special FDI screening council to be subordinated to the Romanian Government, if such investments relate to specific strategic sectors, as previously detailed, and provided that the total value of the investment exceeds EUR 2 million. However, the value threshold is not an absolute rule, as there is an exemption under which even investments below this threshold may be submitted for screening, if they present significant risks for public order or national security. The provisions of the Draft GEO would impose prior screening of investments, as well as subsequent screening, in the event that the investment was completed before the Draft GEO would enter into force. 

National Security Screening

Unrelated to the aforementioned FDI screening process which is expected to be implemented through the Draft GEO, Romania has had a specific procedure, still in force, which requires that investments in certain sectors which are construed as essential to national security must be screened and approved by the Supreme Council of Defence (“CSAT”), energy security being one of the sectors in question.

However, this procedure does not discriminate between investments from foreign investors or from domestic investors. Under this current legislation, given the generality of the legal requirement, a legal assessment is being done in each particular case by the involved parties to see whether a filing is needed or not. As a matter of general practice, CSAT approval is requested primarily in major transactions where either the target has a strategical size or position (i.e. critical infrastructure etc) or the buyer will consolidate its market share on a specific critical sector.

New laws or changes to laws in relation to investment

In energy sector, the new laws are the following:

• Law No. 2021-31 relative to the electricity Code; and
• Law No. 2021-32 relative to creation and functioning of the Regulatory Body in charge of energy and oil & gas sectors. 

Investment regimes

Senegal has adopted an investment code that provides specific incentives to stimulate investment in key sectors such as agriculture and agribusiness, fishing, livestock and related industries, manufacturing, tourism, and mining, among others. Investment incentives include, among others:

• Exemptions from customs duties (over 3 years)
• Suspension of VAT (over 3 years)
• Tax credits of 40% for eligible investment and deductible within 5 years
• Free export company status for agriculture, industry and telecommunications companies deriving at least 8% of their turnover from exports

Senegal has signed several Investment Protection and Promotion Agreements (IPPAs) with several partner countries around the world. In a context of globalisation, these agreements improve the legal security of investments. They provide for the free repatriation of investment capital and returns, guarantee expropriation and provide for Most Favoured Nation (MFN) treatment of investors. They also provide for compensation of losses in the event of war, armed conflict or riot. Senegal is fully committed to improving its business climate to promote investment and foster private sector-led economic growth.

• In general Sweden does not have any restrictions on foreign ownership and the majority of the investments in renewable energy in the last few years have been made by foreign investors.
• There are some restrictions that may apply to investments in the energy sector but the scope of the current Security Protection Act has been considered to be fairly limited. However, a proposal for foreign direct investments is currently being reviewed and if adopted investments implemented after February 2023 may be subject to approval from the Inspectorate for Strategic Products.

Uganda’s economy is fully liberalized and there is no restriction against foreign investors and investments, including in the electricity sector. 

The Investment Code Act 2019 contains a requirement for all foreign investors to hold an investment license, but this requirement can be properly classified as an administrative compliance matter for all foreign investors and does not act as an entry barrier. Significantly, the investment license is subordinate to any license granted by a regulatory authority in a business sector in which the foreign investor plans to operate. A foreign investor includes a company incorporated under the laws of any country other than that of an East African Community Partner State, or a company incorporated under the laws of Uganda in which the majority of the shares are held by a person who is not a citizen of an East African Community Partner State. 

The Investment Code Act provides that a qualifying foreign investor is entitled to a certificate of incentive which shall provide details of the incentives given. The Act does not set out the nature and scope of incentives to be provided, and it is expected that this important aspect will be addressed in subsidiary regulations to be passed in due course. 

Uganda has no exchange control restrictions. The applicable regulatory requirement is that all payments in foreign currency, to or from Uganda, between residents and non-residents, or between non-residents, shall be made through a licensed commercial bank. The net effect of this liberalized exchange control position is that no governmental consent (such as, for example, that of the Central Bank or the Minister of Finance) is required to pay foreign currency in and out of a bank account held in a Ugandan commercial bank. Payments in this respect include fees/charges to offshore suppliers and contractors and dividends to non-resident shareholders.

There is a blanket prohibition under Ugandan law against foreign companies owning or holding land in perpetuity (freehold or “mailo” tenure) interest in land. Foreign companies can only hold a leasehold (periodic) interest granted by a Ugandan citizen for a maximum single period of 99 years.

Foreign investment and changes in regulation will continue to act as a positive force for good in respect of the overall investment of the renewables industry. If managed correctly, they will speed up economic recovery after the Covid-19 pandemic and help create thousands of new jobs across the country. 

There are no specific restrictions on foreign investment into the UK renewable energy sector, although the energy sector is one of the 17 sectors that will be subject to mandatory notification under the New National Security and Investment Act 2021 granting the government powers to scrutinise transactions on national security grounds. 

In October 2021, the UK Government announced it had secured £9.7bn in new foreign investments to be used in 18 renewable focused deals across the UK.

A snapshot of the deals includes £6bn to be invested by Spanish firm Iberdola through Scottish Power in the East Anglia Hub offshore windfarms, creating 7,000 jobs; and £1bn to be invested by KRR owned Viridor in cutting edge decarbonisation technology across five of its UK sites, creating 1,180 jobs. The other new deals include a host of projects which all utilise differing renewable technology across the whole spectrum of the industry. 

As part of the impetus to continue the drive for increased foreign investment in renewables, the UK Government has also launched its 'Investment Atlas'; an online tool designed to support potential foreign investors identify high-priority investments, each with a strong focus on sustainability within the UK.