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Vietnamese Investors Acquiring EU Companies: EU Merger Regulation and the FDI Screening Net

3 min readFLAT LAW FIRM

A practical scenario: a Vietnamese group buys a German tech company for EUR 80 million. Deal closed — 3 months later a notice arrives: the transaction was never allowed to close without German FDI screening clearance, facing fines and forced divestment. Buying in the EU isn’t just about price — it’s about “permits” from multiple authorities.

1. Two control nets: merger and FDI screening

EU M&A faces two control layers: the EU Merger Regulation — over-threshold deals (EU/global turnover) need European Commission approval before closing (standstill obligation) — gun-jumping draws fines up to 10% of global turnover. FDI screening (EU Regulation 2019/452, applying since 2020): EU states screen foreign investment in sensitive sectors (tech, infrastructure, defense…) — Germany, France, and the Netherlands each run their own; non-EU investors (like Vietnam) are the main targets. The two nets are independent — clearing one doesn’t clear both.

2. EU acquisition specifics

  • Works councils: in Germany, the Netherlands — employee councils must be consulted before transfers; skipping violates the law.
  • Due diligence: the same six sides as US M&A (legal, financial, tax, labor, environmental, IP) + GDPR compliance (the target’s personal data).
  • Employees: the EU’s Acquired Rights Directive protects workers on business transfers — employment contracts automatically move to the new owner.
  • Structure: share vs asset deals — as in the US, plus merger/FDI-screening layers.

3. An EU M&A checklist for Vietnamese investors

  • Screen early: determine Merger Regulation thresholds and FDI-screening scope — before signing.
  • Timeline: control procedures take 1–6 months — build into closing schedules with long-stop dates.
  • Works councils: consult properly — especially in Germany and the Netherlands.
  • GDPR: diligence the target’s personal data — GDPR breaches are a big-fine trap.
  • Local counsel: home-country lawyers are mandatory — never do German M&A on Vietnamese experience.

EU M&A: permits first, money later

This article is general information. Each transaction needs its own structure. FLAT Law Firm supports Vietnamese investors in cross-border deals. Contact us for advice.

This article is general information only and does not replace legal advice for any specific case. Regulations may change; please check the current texts.

Frequently asked questions

1. What is the EU Merger Regulation?

The EU merger-control regulation — over-threshold deals need EC approval before closing.

2. What is FDI screening?

The EU foreign-investment screening mechanism (Regulation 2019/452) — member states control investment in sensitive sectors.

3. What is a works council?

Employee councils (Germany, Netherlands…) — consulted before business transfers.

4. What happens on gun-jumping?

Fines up to 10% of global turnover (standstill breach) + possible forced divestment (FDI screening).

5. What is the Acquired Rights Directive?

The EU directive protecting workers on business transfers — contracts automatically move to the new owner.

This article is pending review by the QA Council.

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