Foreign investments

More and more German IT and Telecom companies are becoming critical infrastructure operators – Foreign investment may trigger FDI notification requirement! | Dentons

Recently, the German Federal Government adopted a new amendment to the BSI Critical Infrastructure Ordinance (BSI-KritisV). More companies in the IT / telecommunications sector – but also in other sensitive sectors – will be qualified as “critical infrastructure” operators. For example, it is estimated that more than 7 data centers will be affected by these new rules. Acquisition of 10% or more of these companies by non-EU / EFTA investors will trigger a notification requirement under German foreign direct investment (FDI) rules.


Certain facilities in specific sectors and industries are referred to as “critical infrastructure” if they are of vital importance to the society and economy of the country. Whether they are considered critical depends on whether they meet or exceed the specified threshold values ​​stipulated in the BSI-KritisV. For operators of critical infrastructures, specific IT security obligations apply.

Why is this important for foreign investors?

Non-EU / EFTA investors should carefully consider whether the relevant threshold values ​​are met. If a target is classified as an operator of critical infrastructure, it means that the German FDI regime also applies. If at least 10% of the voting rights are acquired, the transaction must be notified to the Federal Ministry of the Economy and Energy. Failure to notify will result in the suspension and invalidity of the acquisition. Criminal sanctions (imprisonment for up to five years or a fine) may be imposed in the event of an intentional violation. Administrative fines of up to EUR 500,000.00 may be imposed for negligent breaches. For more information on the German FDI control regime and on FDI regimes around the world, see the Dentons Global Foreign Direct Investment (FDI) Tracking.

What are the main changes in relation to the IT / telecommunications sector?

More importantly, the relevant threshold values ​​for data centers (hosting), server farms (hosting) and IXPs will decrease significantly. Additionally, Top Level Domain Registries (TLDs) were introduced as a new category of facilities considered critical infrastructure. These are facilities that manage and operate the registration of Internet domain names within a specific top-level domain.

More in detail:

  • Data centers: Decrease of the threshold value from 5 MW to 3.5 MW contracted capacity.
  • Server farms: decrease in the threshold value of 25,000 instances operated at 10,000 physical instances or 15,000 virtual instances.
  • IXP: Decrease in the number of threshold values ​​from 300 to 100 autonomous systems connected.
  • TLD: The relevant threshold value for this newly introduced category is 250,000 managed or operated.

The amended BSI-KritisV will come into effect on January 1, 2022.

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