Invest Europe

Position Paper on the Foreign Direct Investment (FDI) Screening Regulation

Positions & consultation responses

20 Dec 2024

Foreign capital plays a vital role in financing EU companies. Today, more foreign capital flows to EU venture funds than EU capital flows to non-EU funds. This demonstrates both the value of European businesses and a gap in domestic capital. Around 40% of capital in private markets originates outside the EU.

Foreign investors should not be discouraged from committing capital to European businesses through PE/VC funds. Current FDI regimes, designed to prevent foreign control of strategic assets, are less applicable to PE/VC structures. Investors in such funds do not exercise control over target companies; instead, they invest in the fund manager’s capacity to identify and support businesses.