The Danish Act on Screening of Foreign Investments comes into Force today 1 July 2021

Pre-Screening

A pre-screening scheme has been adopted in the executive order for consultation, whereby a foreign investor can request the Danish Business Authority to assess whether a contemplated foreign investment concerns critical technology or critical infrastructure.

Such request must include the following:

1. The purpose of the request, including a description of the technology or infrastructure which the investment concerns;
2. The purpose of the investment, e.g. active ownership or passive investment;
3. The approximate value of the investment;
4. The timing of the investment, including when the investment will be concluded;
5. Contact information on the foreign investor and the Danish target; and
6. The NACE code for the Danish target.

If, based on the received information, the Danish Business Authority concludes that the foreign investment does not concern critical technology or critical infrastructure, the Danish Business Authority can issue a confirmation to the notifying part.

In this connection, the Danish Business Authority has the authority to require that the foreign investor make a formal notification, if it is assessed that further information is required.

 

The Notification Process

 The notification process to obtain approval from the Danish Business Authority must also include the above-mentioned information. In addition, notification must include the following information regarding the investment:

1. How the investment is funded, including by whom the investment is funded;
2. The percentage of the shares, the share class, the nominal value and the voting rights of the shares that will be acquired by the foreign investor if the investment will cause a direct or indirect control, or a substantial impact at the Danish target;
3. Whether the investment will require a merger filling that must be approved by the Danish Competition Authority and/or in the EU; and
4. A description of why the investment must be approved by the Danish Business Authority.

In addition to the above-mentioned, the following information regarding the Danish target of the investment must be included in the notification:

1. A group chart, if applicable;
2. The critical sector which made the notification mandatory (voluntary if applicable); and
3. The business activities, including competitor and market share.

Further, the notification must include the following information regarding the foreign investor:

1. The function of the foreign investor in connection with the investment: direct investor, holding company or global ultimate owner;
2. A description of the ownership of the foreign investor, if the foreign investor is a legal entity;
3. A description of the business activities of the foreign investor; and
4. A copy of the agreement or letter of intent between the parties.

If the Danish Business Authority deems it necessary to conclude whether the investment will constitute a threat to national security or public order, the Danish Business Authority has the authority to request further information from the foreign investor. As such, there are no limitations to what information can be requested by the Danish Business Authority.

Further, the Danish Business Authority has the authority to collect information from the Danish target company to verify the information which the foreign investor has provided. The Danish Business Authority may require that the information provided by the foreign investor is accompanied by a statement from an accountant stating that the provided information is correct.

If the Danish Business Authority concludes that the foreign investment may constitute a threat to national security or public order, the approval can be rectified by terms, such as a limitation of the foreign investor’s ownership of the Danish Target or a limitation of the foreign investor’s involvement in the management of the Danish target company. Such undertaking must be done by filling out a form made by the Danish Business Authority in the same way as the notification.

If the Danish Business Authority has no concerns about the foreign investment, the approval will be granted within 60 business day from full notification. However, this deadline can be extended to 90 business days if the notification requires further investigation as mentioned above.