General corporate: Communication on intra-EU investment

United Kingdom
The Commission has issued a Communication on what it blandly calls intra-EU investment. In fact, the problem is far from bland and covers in particular:

  • bans on investors from another Member State acquiring more than a certain amount of voting shares in national companies; and

  • an obligation to obtain an authorisation where such investors wish to purchase shares beyond a certain threshold.

The Commission is clearly suspicious about such rules and provides guidance as to when they will be contrary to EC law. They are only likely to be permissible if, for example, they are either applied to activities connected with the exercise of official authority, or in relation to public policy, public security or public health.

The European Court of Justice will scrutinise such rules to ensure that they are not hidden obstacles to trade. The rules must:

  • be applied in a non-discriminatory manner;

  • be justified by imperative requirements in the general interest;

  • be necessary for securing the attainment of the objective that they pursue; and

  • not go beyond what is necessary to attain their objective.