Investment screening when you sell to a buyer from Asia:What owners should know

When an investor from outside the EU buys a German company, the Federal Ministry for Economic Affairs can review the purchase. That applies to buyers from mainland China and from Taiwan alike. For most manufacturers it is a right of review for the state, not a duty to notify. In certain sensitive areas, however, the buyer must notify the purchase, and the sale may only complete once it has been cleared.

This article describes the rules as they stand in October 2026. They are being revised; more on that at the end.

Who can be reviewed

Any acquisition by an investor from outside the EU or EFTA can be reviewed. That covers buying shares as well as buying a business unit or its essential assets. If an Asian company buys through a European subsidiary, what counts in the end is who stands behind it.

Three thresholds

Whether and when the state looks more closely depends on how much the buyer takes over and what your company does:

• From 10 % of the voting rights: companies that operate critical infrastructure or provide certain other security-relevant services. The buyer must notify.
• From 20 %: companies in certain key technologies, such as semiconductors, artificial intelligence, 3D printing or quantum technology. The buyer must notify.
• From 25 %: all other companies. There is no duty to notify, but the ministry can review the purchase on its own initiative.

Most machinery, electrical and materials manufacturers fall into the third tier. Whether your company appears on one of the lists is not always obvious, though. A supplier to grid operators, or a manufacturer with its own semiconductor or sensor technology, can be caught sooner than you would think. Your lawyer should establish this early.

What a duty to notify means for your timetable

If the purchase must be notified, a standstill applies. The signed contract is provisionally ineffective until clearance. The buyer may not yet exercise voting rights, and certain company information may not be passed to him until then. Breaches are a criminal offence.

The deadlines are fixed:

1. Preliminary review: within two months of learning of the signed contract, the ministry decides whether to look more closely. If it does not, the purchase is deemed cleared.
2. Main review: if it does, it has four months from receipt of the complete documents.
3. Extension: three more months in cases of particular difficulty.

So build at least the two months of preliminary review firmly into the timetable, and considerably more for a notifiable purchase. And set out in the contract the latest date by which clearance must be in place, and what happens if it does not come.

When there is no duty to notify

Even without a duty to notify, a purchase is not automatically safe. It is effective, but subject to a possible prohibition. The ministry can review it on its own initiative for up to five years after signing.

There is a simple remedy: the clearance certificate (Unbedenklichkeitsbescheinigung). The buyer applies for it at the ministry. If the ministry does not open a review within two months of a complete application, the certificate is deemed granted. With a buyer from Asia, I recommend taking this route almost every time. It costs little time and gives both sides certainty.

What the ministry looks at

The ministry wants to know who stands behind the buyer: the ownership chain all the way up, any state shareholding or influence, and what the buyer intends to do with the company. Ask your buyer about this early. A buyer who supplies this quickly and completely is a good sign. One who hesitates will cost you time.

Austria has similar rules. Switzerland passed its own law at the end of 2025, which makes takeovers by state-controlled foreign investors in particularly critical areas subject to approval.

What is changing

In 2026 the EU adopted a new regulation on investment screening. It applies from 17 January 2028 and requires every member state to review purchases in certain areas in advance. The German economics ministry has circulated the draft of a dedicated investment screening act, which is to replace today’s rules in the Foreign Trade Act and Ordinance. Thresholds, lists and deadlines may change as a result. Have the position checked at the time of your sale.

And remember: the German review is only one side. A buyer from mainland China or Taiwan often needs approval at home too before he may pay. More on that in my article Selling your company to a buyer from China or Taiwan.

What this means for you

• Have it established early whether your company falls under one of the lists.
• Ask the buyer in the very first conversation about his ownership chain and any state shareholding.
• If the purchase must be notified: until clearance, release only the information your lawyer approves, and plan for several months.
• If it need not be notified: have the buyer apply for a clearance certificate.
• Make clearance a condition of the contract, with a latest date and a rule for what happens if it does not come.

I have been through these procedures myself: in Germany, at EU level and on the buyer’s side in Asia. At Echo Nova Capital & Partners we build them into the timetable with your lawyer from the start, so that the best offer is also one that closes.

This article describes the legal position in general terms and is not legal advice for any individual case.