Recent amendments to the Italian regime for control of Foreign Direct investments (FDI)

4 Maggio 2022
Thank to Emanuele Mirra for collaborating on this article

Law Decree 21/2012 (converted into law No. 56/2012) provides a specific regime for foreign investment control (known colloquially as “golden power”) that grants the government special powers to strengthen protection of the country’s “strategic” assets. The original rules have been modified several times over the years, including in view of the economic consequences of the COVID-19 pandemic in 2020.[1]

On March 21, 2022, the government issued Law Decree No. 21/2022 (known as the “Decreto Ucraina”) with the aim of countering the serious effects of international crisis due to the Russia-Ukraine conflict. As a result of this law decree, significant changes were made to the regime covering the types of transactions that trigger the notification obligation, the identification of the activities deemed of strategic importance for the purposes of the regime, certain procedural rules, and the organizational structure of the government offices tasked with enforcing the regime.

Changes impacting the scope of the regime and notification obligations

The objective of these changes is twofold: on the one hand, to make permanent certain emergency provisions that were initially introduced on a temporary basis to address the threat posed to national strategic assets[2] by the economic distress caused by the pandemic; on the other hand, to clarify and simplify certain provisions affecting the types of transaction or the “jurisdictional thresholds” that trigger the notification obligation.

  • The Decreto Ucraina makes permanent the emergency rules on the acquisition of minority shareholdings in strategic companies by non-EU operators in the sectors listed in article 2 of Law Decree 21/2012.[3] As a result, the obligation to report minority acquisitions in these sectors by non-EU operators (with progressive thresholds starting at 10% of the share capital) will become a permanent part of the regime as of January 1, 2023 (the deadline of the emergency regime had previously been extended to December 31, 2022).
  • As of January 1, 2023, also the emergency provision on the obligations to notify acquisitions of controlling shareholdings in certain strategic activities by EU operators – including those established in Italy – will become permanent. The obligation to notify such transactions now applies in all the sectors of communications, energy, transport, health, agri-food, and financial/credit/insurance.
  • Further, the new provisions clarify the scope of the notification requirement and of the related special powers of the government in the sectors of defense and national security by expressly stating that they apply – in addition to the acquisition of (minority and majority) shareholdings in assets or activities of strategic importance – to any resolution, act, or operation of a shareholders’ meeting or other administrative body of a company “that have the effect of changing the ownership, control, or possession” of the strategic assets or activities.
  • A previous provision covering special government powers over 5G technology applied to broadband electronic telecommunications networks has been revised completely and now also extends to cloud technologies and other assets relevant to cybersecurity (to be identified via a specific government regulation). In this context, the Decreto Ucraina has simplified the obligation to report each planned transaction involving such technologies by providing that the parties to the transaction must notify one annual plan, that can be updated every four months without making a whole new notification, of envisaged transactions or contracts aimed at acquiring goods, technology-intensive components, or services functional to the design, implementation, maintenance, and management of the mentioned assets and technologies. Further detail on the content of the annual plan and the relevant updates to be notified under this provision will be provided in a future government regulation.

Changes on procedural and organizational rules

On the procedural side, the Decreto Ucraina provides clarifications and simplifications in view of the foreseeable increase in reporting of transactions and the of corresponding workload for offices in charge of enforcing the Italian FDI regime. Those changes are summarized below.

  • In case of acquisition of shareholdings, notification must be provided, where possible, jointly by the acquiring company and the target company. When the notification is provided only by the acquiring company, that company must immediately inform the target company of the transaction and of the notification so that the latter can submit statements, information, and documents to the prime minister’s office within the following fifteen days. Correspondingly, the remedies and obligations (including possible sanctions) involved in the exercise of special powers will be binding upon both the acquiring company and the target company.
  • Further, the Decreto Ucraina introduces: (i) a pre-notification mechanism to enable preliminary examination of the transaction to assess whether the notification is admissible and the applicability of the national FDI regime; and (ii) a simplified notification and scrutinization process if the government committee in charge of coordinating and assigning enforcement priorities unanimously decides not to exercise its special powers in the first place. These measures are not immediately applicable, as they need to be sketched out in detail and implemented through a specific government regulation.

Finally, the investigative powers of the prime minister’s office have been strengthened by the provision of a specific office for special evaluation and strategic analysis made up of ten experts. The monitoring and investigative powers of the government have also been strengthened via strategic cooperation with the Guardia di Finanza, which is the police corps in charge of financial crimes.

[1] Our review of the expansion of the Italian FDI regime during the COVID-19 emergency can be read here:

[2] Law Decree No. 21/2022 has not yet been converted into law and therefore the content described here may still be amended.

[3] These include energy, transportation, telecommunications, and “new sectors” referenced in EU Reg. 452/2019, including agribusiness, infrastructure, aerospace technologies, health sectors, robotics, AI, semiconductors, and financial services.

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