On 1 May 2025, it will be four years since the Czech Act on the Screening of Foreign Investments came into force. This law grants the Ministry of Industry and Trade (MIT) the authority to review investments originating from countries outside the European Union. From the outset, the MIT has been relatively active in this area, screening dozens of both notified and non-notified investments each year. If the MIT suspects that a foreign investment could pose a security risk or disrupt public order, it may propose that the Czech government prohibit the investment through an official decision.

In March 2025, the Czech government issued its first-ever resolution authorising the MIT to prohibit the continuation of an investment by the Chinese company Emposat, which operates a ground satellite station equipped with a parabolic antenna in South Moravia. The government justified its decision on the grounds of national security and the protection of public order. According to available information, this particular investment was subject to an ex officio review.

Which sectors are considered high-risk in terms of foreign investment screening? Without a doubt, national defence, energy, telecommunications, information technology, and healthcare—sectors essential to the state's critical infrastructure.

Given that the foreign investment screening regime is applied across all EU Member States, one might wonder whether the concepts of national security or public order are uniformly defined. They are not. Currently, there is no harmonised European framework for interpreting these terms, although this may change as the international situation evolves.

With this decision, the Czech government—specifically the MIT—has sent a clear message to foreign investors: carrying out foreign investments in the Czech Republic is not merely a formal process. Foreign investments are certainly welcome, but they are also carefully scrutinised. It is therefore highly advisable to engage with the MIT, especially before executing such an investment.

Author: Vladěna Svobodová