The TerraLex Cross-Border Foreign Direct Investment (FDI) Guide provides a practical overview of FDI screening and investment control regimes across key jurisdictions worldwide, helping TerraLex members and clients assess regulatory risks in cross-border transactions. This concise guide covers the legal framework for FDI review, filing triggers, substantive tests, approval procedures, timelines, filing requirements, penalties for non-compliance, confidentiality considerations, and available appeal rights. Spanning jurisdictions across Africa and the Middle East, Asia-Pacific, Europe, Latin America and the Caribbean, and North America, it is a valuable resource for navigating foreign investment rules and understanding when government approval may affect deal timing, structure, and execution.
Foreign Direct Investment (the “FDI”) in Lithuania is regulated at both a national and European Union level.
The main domestic rules governing the FDI screening are provided in the Law on the Protection of Objects Critical for National Security of the Republic of Lithuania (the “Law”).
The authority in charge of applying FDI rules is the Commission for Coordination of Protection of Objects Critical for National Security (the “Commission”).
The Commission can be approached informally to receive their initial view on the need to submit an FDI filing. However, in less complex transactions that are time-sensitive, it might be more reasonable to simply submit a formal FDI filing notification instead of initially approaching the Commission informally. This is the case because the initial notification, for the most part, requires submission of generic information about the intended transaction (e.g., name of the parties involved, activities that they are engaged in, approximate value of the investment, whether any of the parties is subject to any sanctions, etc.).
Please indicate triggering transactions (internal reorganizations, domestic transactions, indirect acquisitions of shares or assets or portfolio investments, and any exempted categories of transactions); what constitutes a “foreign investor” (including connected persons or corporate bodies); any control, turnover or value thresholds; activities/sectors.
An investor (foreign and (or) domestic) has to notify the Commission if:
FDI screening assesses whether the transaction poses a threat to the interests of national security. The Commission has the discretion to decide whether certain circumstances pose a threat to the national security. Generally, the following circumstances are considered as posing a threat to the interest of national security:
The FDI screening must be performed before the closing of the transaction. Failure to comply might lead to the transaction being declared null and void if the Commission finds ground to conclude that the transaction poses a threat to the interests of national security.
No.
Applicants are required to provide extensive information about the transaction, including:
Generally, the investor is responsible for submitting the FDI filing to the Commission.
Failure to submit or submitting a late filing automatically does not render the transaction null and void.
However, if the Commission concludes that the transaction, which was not notified, does not comply with the interests of national security, such transaction becomes null and void from the moment of its conclusion.
The approval from the Commission must be obtained before the conclusion of the transaction. Otherwise, if the transaction is not suspended, there is a risk that the Commission can conclude that the transaction does not comply with the interests of national security. Consequently, if the transaction was not suspended and completed, such transaction becomes null and void from the moment of its conclusion.
Only investments meeting the requirements provided in the Law may be reviewed under FDI screening.
The Commission can either decide to initiate the verification procedure of the investor or conclude that there are no grounds for such verification. If the verification procedure is initiated, three possible outcomes exist. The Commission can conclude that the investor:
The Commission provides recommendations that should be implemented in cases where it concludes that the investor poses a threat to the interests of national security.
The Commission has the discretion to provide the recommendations it sees fit, i. e., there is no exhaustive list of recommendations that can be issued to the investor.
If the recommendations are not complied with, the Commission can announce that in such case the transaction is null and void.
The decisions of the Commission can be appealed to the administrative court. Cases regarding the appeal of the Commission’s decision must be heard not later than 45 days after the appeal was accepted by the court.
The steps and timeline of the FDI screening process is as follows:
Investors must provide all requested documents. FDI screening is confidential towards the general public.
(e.g. declaration to public authorities for the purpose of establishing the balance of payments, control of transactions involving foreign subsidiaries, control of outbound investments)?
No.
Disclaimer: This guide contains summaries of general principles of law. It is not a substitute for specific legal advice and should not be relied upon in relation to the application of the law or subject matter covered.
