Greenland is now introducing rules on screening certain foreign investments. The bill has already been scheduled for consideration by the Greenland’s parliament for entry into force on 1 January 2025.
The purpose of the Act is to introduce screening of foreign investments that may pose a threat to Greenland’s security or public order – and the Act gives the Government the right to prohibit, reject and revoke inappropriate investments.
A “foreign investment” is covered by the Act upon obtaining direct or indirect ownership or control of at least 25% of the shares or voting rights in an entity domiciled in Greenland – as well as any increase thereof to at least 1/3, 50%, 2/3 or 100%, or otherwise directly or indirectly exerting decisive influence on managerial, financial, developmental or operational matters in an entity domiciled in Greenland, etc. In addition, the Act also covers the acquisition or initiation of other activities in Greenland that may pose a threat to Greenland’s security or public order – i.e. investments in a very broad sense.
The Act gives the Government the right to screen cross-sectoral and particularly sensitive sectors and certain activities, including the following:
The scope of the Act is partly similar to the Danish Investment Screening Act, but as something unique to Greenland, the Act also covers the raw materials sector, hydroelectric power plants and Government-owned companies.
A foreign investor who intends to make a foreign investment in the above-mentioned sectors and activities must apply in advance to the Government for permission to make the investment.
There is also a voluntary screening option for the approval of foreign investments that do not fall within the above categories. Voluntary notification may concern both planned and already completed foreign investments. This ensures that the Greenlandic Government can approve the investment and thus will not subsequently be able to intervene against the investment on the grounds of Greenland’s security or public order. Thus, the Government has the right to investigate foreign investments that have not been notified for approval for up to five years after the investment has been made.
The Greenlandic Government may approve, reject or prohibit foreign investments, as well as issue orders for termination. Approval may be subject to conditions, e.g. commitments from the investor, with a reporting obligation.
Applications are exempted from public access
The bill must be expected to be an additional burden for the mining sector, as mineral projects are characterized by being extremely costly and requiring continuous fundraising.
The bill comes in the wake of a number of new regulatory measures and legislation in recent years, including provisions whereby foreign persons or foreign-owned companies may only acquire title or rights of use to real estate with the prior written consent of the Greenland Government, which will also be considered by the Inatsisartut in Autumn and which is already in force by certain regulation.
The bill is open for consultation until 13 October 2025.
Nuna Law is ready to advise you if you have any questions or would like advice on the draft law. Please contact partner Helen Kibsgaard (hk@nuna-law.gl) or partner Thor Suhr (ts@nuna-law.gl).
