Malta Government sets up National Office for FDI Screening
The National Foreign Direct Investment Screening Office has been set up in order to implement the provisions of Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union. The said shall be responsible for screening new FDI projects, joint ventures with a foreign component and the transfer of any shares and/or controlling interests in existing companies where the owner, titleholder or ultimate beneficial owner originates from third countries (that is, any country which is not a member of the European Union).
The sectors which shall be subject to screening include the following:
(a) critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure;
(b) critical technologies and dual use items as defined in point 1 of Article 2 of Council Regulation (EC) No 428/2009 (15), including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defense, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies;
(c) supply of critical inputs, including energy or raw materials, as well as food security;
(d) access to sensitive information, including personal data, or the ability to control such information; and
(e) the freedom and pluralism of the media.
Any company registrations for businesses intending to operate in the above-mentioned sectors will need to first obtain the necessary clearance from the said screening office. The application for clearance will need to contain the following information:
a. the ownership structure of the foreign investor and of the undertaking in which the foreign direct investment is planned to be made or has been made, including information on the ultimate investor and/or beneficial owner and participation in the capital
b. the approximate value of the foreign direct investment;
c. the products, services and business operations of the foreign investor and of the undertaking in which the foreign direct investment is planned or has been completed;
d. the jurisdictions, including Member States, in which the foreign investor and the undertaking in which the foreign direct investment is planned or has been completed to conduct relevant business operations;
e. the funding of the investment and its source;
f. the date when the foreign direct investment is planned to be completed or has been completed; and
g. any other information as the Office may reasonably require for the proper execution of its functions.
Initially company registrations and share transfers relative to third country nationals / interests will be forwarded by the MBR to the Office. The screening office has indicated that it expects the objects of the company being incorporated to clearly set out the core activities to be undertaken.
Where it is clear that the activities do not require screening, the Office has endeavoured to give the green-light to MBR within 24 hours. Where an activity falls within the above described activities, a full screening process will be undertaken with full due diligence on the activity and on the ultimate beneficial owner. This process will take some time to conclude, although the Office has endeavoured to conclude the process in the shortest time possible whilst not compromising, in any way, the extent and quality of the screening to be conducted. Certain costs could also be imposed on the promoter. It is not yet clear what these costs are and who the 'promoter' is intended to refer to.