Non-EU companies doing business in the EU are likely facing future regulatory hurdles. The recent White Paper on levelling the playing field as regards Foreign Subsidies aims to limit the “distorting effects” of subsidies received outside the EU. This step follows a toughening of the EU member states’ rules to control Foreign Direct investments (FDI) into the EU that had already started in 2019 but accelerated when the COVID-19 pandemic highlighted the “economic vulnerability” of certain strategic EU industries.
Foreign subsidies will trigger filing requirements and/or investigation by the EU Commission if used by recipients to:
- Compete in the EU against non-subsidised undertakings
- Acquire an EU undertaking (even a minority shareholding)
- Participate in EU public procurement procedures