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New act will stop investments in companies by foreign actors that could harm Sweden

Government Offices of Sweden

22 March 2023

Foreign direct investments are hugely important to Sweden's business sector. At the same time, there are risks associated with foreign actors investing in protected activities. The Government has therefore today decided to refer a proposal to the Council on Legislation for a new act under which investments that involve security risks can be reviewed by a special screening authority and, if necessary, prohibited.

Foreign direct investments are an important part of the Swedish business sector's development. At the same time, strategic acquisitions are one of the methods used by foreign powers to obtain advantages over other states.

"The majority of foreign investments made in Swedish companies are valuable and unproblematic, but some are associated with major risks. It must be possible to screen such investments and, if necessary, stop them," says Minister for Justice Gunnar Strömmer.

Most EU Member States have introduced screening systems that allow preventing investments in domestic companies, if they entail risks from a security policy perspective. Currently, Sweden has no such screening system.

"Security developments have shown the risks of foreign powers controlling critical infrastructure and gaining influence in the defence and security industry. We need to do our utmost to protect Sweden, and Swedish companies whose activities are of importance to national security interests, from being controlled by foreign powers," says Minister for Civil Defence Carl-Oskar Bohlin.

Current regulations do not provide sufficient possibilities to prevent foreign investments in Swedish companies whose activities, information or technology are of importance to Sweden's security or to public order or public security in Sweden.

The proposal referred to the Council on Legislation for consideration therefore suggests that a screening authority has the possibility to review direct investments in Swedish companies that conduct sensitive operations, such as vital public services or activities that are of importance to national security interests.

It is proposed that the new act enter into force on 1 December 2023.