EU Formally Adopts Revised FDI Screening Regulation

The Revised EU FDI Regulation introduces mandatory FDI screening mechanisms across all Member States for investments in common minimum sectors, including defence, semiconductors, artificial intelligence, critical raw materials and financial services. It also extends the screening framework to intra-EU transactions where the ultimate investor is an individual or an entity from a non-EU country, addressing a recognised gap in the existing framework.

National screening procedures will be streamlined to reduce complexity and to improve the EU's attractiveness as an investment destination. Cooperation between national screening authorities and the Commission will also be enhanced to facilitate coordinated action on cross-border security risks.

The Revised EU FDI Regulation will be published in the Official Journal of the European Union and will enter into force 20 days after publication. The new rules will apply from 18 months after entry into force, which we expect to be in January 2028. Over the next 18 months, we expect that Member States will be busy revising and modernising their national screening regimes to align with the Revised EU FDI Regulation.

For a detailed analysis of the key changes introduced by the Revised EU FDI Regulation, please refer to our earlier article here.

The authors would like to thank Trainee Solicitor Edward Boswell for his contribution to this article.