We document a chilling effect of climate regulations on cross-border corporate investment. Specifically, countries enacting climate laws subsequently experience significant declines in in-bound mergers and acquisitions by foreign firms. Completed transactions after law enactment feature lower premiums and less post-merger performance improvement, and deals initiated pre-enactment are more likely to be withdrawn. The chilling effect is amplified when acquirers are from countries less concerned about climate change and when climate regulations provide no subsidies. Key mechanisms underlying the documented effect include economic burdens and geopolitically-driven selective enforcement. Our findings suggest that climate laws can disrupt global capital and resource reallocation and highlight a hitherto overlooked cost of climate regulations.