Golden Power (FDI) | Italy

We advise foreign and Italian companies engaged in acquisitions and commercial and corporate transactions in sectors qualified as strategic, on the application of the Golden Power.

The EU Regulation on Foreign Direct Investment (FDI) and the Italian Golden Power system qualifies the defence and national security sectors, the 5G communications sector and the civil sectors related, for example, to data, energy, transport, health, agribusiness and communications, as being strategic.

Our specialised team, which is constantly updated on the evolutions and orientations of the applicable rules, assists clients both in the preliminary phase of the assessment regarding the applicability of the regulations, and in the possible subsequent phase of notification to the Prime Minister's office.

Golden Power: what is it and to whom does it apply?

The Golden Power regulations grant the Prime Minister's office special powers of preventive control in order to safeguard the ownership structures of companies operating in certain sectors considered strategic for the national economy.

In particular, the Government is given the power to prohibit the conclusion of certain transactions or the adoption of specific resolutions, or to impose specific conditions.

Undertakings managing strategic assets, with respect to certain resolutions, acts and transactions, as well as persons acquiring significant shareholdings in the same undertakings, are subject to an obligation to notify the Department for Administrative Coordination of the Government. Failure to comply with the notification obligation is punishable with significant administrative fines, and resolutions and acts adopted in breach of such obligations are considered as null.

It is therefore opportune, even in view of the considerable economic and practical consequences of a failure to notify, to analyse each individual transaction with extreme caution and utmost care, carrying out, where possible, a multi-jurisdictional analysis, in order to ensure that the transaction complies with the provisions in force in the Single Market.

In this context, it becomes essential to be able to anticipate the relevance in terms of the Golden Power at a preliminary stage of any transaction/resolution in these sectors, so as to be able to define the most suitable path, and to reconcile, as efficiently as possible, the business' timeline with that required by the law.

Prenotification

The ambiguity of the regulations, coupled with the countless business areas involved, have provided uncertain legal bases: sometimes, in fact, it is impossible to establish with absolute certainty whether a resolution, an act and/or a transaction is subject to mandatory notification.

The persistence of multiple interpretative uncertainties related to the application of the Golden Power rules has led to an increasing use of notification for precautionary purposes.

The concept of pre-notification represents a non-resolutive, but useful, tool for dealing with the ambiguity of the rules in all those cases in which the discretion that accompanies special powers openly clashes with the requirements of legal certainty.

FAQ

Can acquisitions made by Italian entities fall within the scope of the Golden Power regulation?

In the communications, energy, transport, health, agribusiness, financial, credit and insurance sectors, even the permanent establishment of a European Union entity, including those established or resident in Italy, may trigger the obligation to notify an acquisition.

Can the mere establishment of a company require a notification under the Golden Power regulation?

So-called greenfield investments, which occur when a company invests abroad by setting up a new business (e.g., a new subsidiary), are relevant when the corporate purpose of the newly incorporated company, or the assets held by it, relate to defence and national security or one of the strategic sectors identified by the regulation.

If the company object relates to one of the strategic sectors identified by the regulation, other than defence and national security, the investment can only be scrutinised if one or more shareholders, from outside the European Union, hold a share of at least 10% of the voting rights or capital.

Are pledges on shareholdings relevant for the application of the Golden Power regulation?

Are pledges on shareholdings relevant for the application of the golden power regulation?In its decision no. 10275/2024, the Lazio Regional Administrative Court clarified that the mere creation of pledges on company shareholdings constitutes a relevant transaction for the purposes of the Golden Power rules.

Consequently, the notification to the Presidency of the Council of Ministers must already take place at that stage and not at the time of the possible enforcement of the pledged assets.

Can the award of concessions by means of public tenders fall within the scope of the Golden Power regulation?

The awarding of concession contracts, also at regional level, having as their object a strategic asset must be notified to the Presidency of the Council of Ministers in accordance with specific regulations, which provide for significant simplification measures.

These measures provide for the possibility for the contracting authority, whether public or private, to send a notification of the tender procedure, even before the publication of the call to tender, and the possibility for the contracting authority and the successful bidder to carry out the notification, even jointly, after the selection of the best bid and even before the contract is awarded.

Furthermore, the time limit for the exercise of special powers is halved, from 45 to 23 days.

If a doubt arises as to the applicability of the Golden Power regulation, is it possible to submit a pre-notification?

The pre-notification procedure consists in the possibility to send the Department for Administrative Coordination of the Presidency of the Council of Ministers a notice regarding the planned project (of course, before its realisation). 

Unlike the ordinary procedure, which can take up to 45 days (subject to requests for information), the pre-notification procedure allows interested companies to engage in preliminary discussions with the Government and to request an initial assessment as to whether or not the Golden Power rules apply, reducing the response time to 30 days.

Can an internal company act be relevant for the application of the Golden Power regulation?

Resolutions and corporate acts that result in changes in the ownership, control or availability of strategic assets must sometimes be notified, like takeovers, to the Prime Minister's Office for verification of the applicability of the golden power.

Such acts include, for example, those providing for the transfer abroad of the registered office, the modification of the company objects, the assignment of rights in rem or rights of use relating to tangible or intangible assets, the assignment of the same by way of guarantee or the assumption of restrictions conditioning their use.

Must the notification under the Golden Power regulation be submitted within 10 days after the transaction is concluded?

Generally, where the transaction relates to the passing of corporate resolutions/acts falling within the scope of the regulation, the notification is submitted prior to the adoption of the relevant corporate resolution/act or within 10 days after its approval (and not from its registration at Companies Registry).

Where the transaction to be notified relates to the purchase of equity interests, there is a tendency to notify in the interim period between signing and closing by including a condition precedent governing the notification in the sale and purchase agreement.

Does the water sector also qualify for the application of the Golden Power regulation?

Prime Ministerial Decree no. 179/2020 identified the following assets and relationships of strategic importance in the water sector:

• the critical infrastructures, physical or virtual, which guarantee the continuity of services related to the supply of drinking water intended for human consumption and of water intended for irrigation, sewerage and purification;
• the technologies used in the management of these water infrastructures and services;
• companies in the sector with a turnover of more than Euro 300 million and more than 250 employees.

For transactions involving the acquisition of shareholdings, can a joint notification be made by the companies concerned?

The notification is made jointly by the acquiring company and the company whose shares are the object of the acquisition.

In the absence of a joint notification, the acquiring company is obliged to send a notice containing the essential elements of the transaction and of the notification to the company whose participations are the object of the purchase in order to allow its participation in the proceedings.

Is the period for the examination of the notification by the Prime Minister's Office, as a rule, a maximum of 45 working days from the date of notification?

The period for the examination of the notification and the exercise of special powers by the Presidency of the Council of Ministers may be suspended, once only, for a maximum of 10 days (in the case of a request addressed to the notifying parties) or 20 days (in the case of a request addressed to a third party).

If the Presidency of the Council of Ministers fails to issue a decision within the time limit, the transaction is deemed approved without conditions.

If a company is active in the 5G sector, is it required to submit an annual notification under the Golden Power regulation?

Broadband electronic communication services based on 5G and cloud technology and cybersecurity are among the activities of strategic importance for the national defence and security system.

In these sectors, the conclusion, in any capacity, of contracts or agreements having as their object the acquisition of goods or services relating to the design, implementation, maintenance and management:

• of networks related to broadband electronic communication services based on 5G technology; or
• of technology-intensive components functional to the aforementioned deployment or operation.

In addition, a plan describing, inter alia, how the digitisation systems will be developed must be notified annually.