Navigating the New Era of FDI Screening Webinar – Key takeaways
Contacts
Related
Practices
Regions
Countries
On 25 November 2025, Bird & Bird's Foreign Direct Investment (FDI) experts from the UK and across the EU hosted a webinar exploring the increasingly complex landscape of foreign direct investment screening.
Through two case studies drawn from our experience advising on recent transactions, our panel examined the key FDI considerations that shape cross-border M&A deals in sensitive sectors. Practical insights from five key jurisdictions: the UK, Netherlands, Italy, Finland, Germany, and the broader EU framework were shared. We provide a summary of the key topics and takeaways below.
Why does FDI matter now more than ever?
When executing M&A deals and cross-border transactions, foreign direct investment requirements and approvals must now be considered as a priority alongside merger control. An increasing number of countries have and/or are adopting investment screening regimes to protect their national assets and critical industries (e.g. semiconductors, AI, energy, critical national infrastructure, defence) with a growing desire to protect national sovereignty.
Case Study 1: US Acquisition of European Semiconductor Company
Our first case study considered a US company seeking to acquire 100% of the share capital of a European semiconductor company with operations across the UK, Germany, Netherlands, Finland and Italy. The target also has R&D facilities in all five jurisdictions, supplied critical components to defence contractors, held sensitive IP in quantum computing, and had government contracts in multiple countries. The parties had an ambitious timetable and wanted simultaneous signing and closing within four weeks.
Key Insights:
Mandatory notification and approvals are required in all countries – plan appropriately: The transaction triggers FDI notification requirements in the UK, Germany, Netherlands, Finland and Italy although the approaches to critical sectors and the mandatory notification requirements in each of these jurisdictions differ:
The UK operates mandatory and voluntary notification regimes, with mandatory notification triggered when acquiring shares exceeding 25%, 50%, or 75% thresholds if the target operates in any of 17 sensitive sectors.
The Netherlands requires compulsory notification of transactions involving target companies that are vital providers, business campuses, or active in specifically designated sensitive technologies (such as military goods, dual-use items, semiconductor technology, quantum technology). There is no voluntary regime, but the competent authority can provide informal views. Also, Dutch FDI screening covers national, EU and foreign investors.
Germany has a mandatory regime and operates cross-sector (covering 27 sectors) and sector-specific (limited to export-restricted goods, military and defence-related goods and technology, and certain IT security products) regimes, with acquisition thresholds capturing shareholdings between 10% and 25%, and semiconductors and quantum computing in scope of the cross-sector regime.
Finland's sector-specific framework is triggered when a Finnish target supplies to certain Finnish authorities operating in three sectors: defence, security, and vital functions (security of supply, critical infrastructure).
Italy’s Golden Power regime requires notification when a non-EU purchaser acquires control or reaches 10%, 15%, 20%, 25%, or 50% thresholds, with semiconductors, quantum computing IP, and government contracting all highly sensitive.
Whilst there is no harmonised clearance regime in the EU similar to merger control — screening remains a Member State competence — there is a co-operation mechanism which allows the European Commission and other Member States to submit comments. Discussions are ongoing to add a mandatory screening obligation for Member States, which may also cover AI, quantum technology, and defence.
Acquirer/investor nationality impacts the national security risks: Whilst FDI regimes do not formally distinguish based on the nationality of the investor/acquirer, from experience, as part of the substantive national security assessment, most governments will consider the nationality of the acquirer or ultimate beneficial owners as part of their review.
The establishment of transaction vehicles/ SPV structures and internal reorganisations require careful planning as they may require clearance: Jurisdictions diverge in which situations internal reorganisations require an FDI notification, but in most jurisdictions, internal reorganisations are not specifically exempted from FDI screening, and it should be carefully considered whether the transaction is in scope of the FDI regime.
A four-week simultaneous sign and close timeline is challenging in all countries: A four-week simultaneous signing and closing is generally not feasible across jurisdictions because mandatory notifications require clearance before completion and review timelines extend beyond this in all countries, especially factoring the time needed to prepare the necessary filings. Parties typically need to allow at least 2-3 months for clearances in straightforward cases.
Remedies and conditions: The types of remedies or conditions imposed vary significantly across jurisdictions, with several countries describing the actual conditions as "a bit of a black box" due to limited transparency and some (not all) authorities seek to impose remedies with limited or no negotiation in a “take it or leave it” approach. Remedies may include:
corporate governance and management limitations
obligation not to reduce workforce levels
government updates
data handling rules
ring-fencing assets, contracts or activities
Case Study 2: Norwegian Staged Acquisition of AI Company
The second case study involved a Norwegian enterprise planning to gain control of a European AI company through staged acquisitions of increasing levels of shareholding — an initial 10% acquisition, followed by increases to 25% and then 51%. The target had UK, Italian, German, Finnish and Dutch subsidiaries with no activities or revenues.
Key Insights:
Subsidiaries with no activities/revenues: Jurisdictions take varying approaches to whether dormant subsidiaries trigger FDI screening obligations. In most jurisdictions, if the target has no activities or revenues, then a mandatory filing will not be required. Also, revenues alone (such as mere sales activities) are generally unlikely to trigger a notification requirement if there is no presence or activity in the country.
Staged acquisitions are captured and may require multiple filings: Acquisitions of different levels of shareholding or voting rights will trigger most FDI regimes and (subsequent) filings may be required for acquisitions of shareholdings above 10% or more. Whether the filing is mandatory or voluntary will vary by country.
Additional Practical Points:
Asset deals are captured under most FDI regimes, although filing requirements may differ.
Like merger control, parties should consider FDI when negotiating transactional documentation (e.g., Share Purchase or Asset Purchase Agreements), which typically include:
a condition precedent requiring approval before closing
relevant warranties
cooperation obligations
extended longstop dates to accommodate clearance delays
provisions addressing remedy options and potential refusal by the authority
FDI regimes are generally far less transparent than merger control regimes, making it harder to anticipate timelines or remedies. Parties may therefore want to allow for more leeway than is common for merger control.
A signed SPA is typically not necessary to file an FDI notification. However, this would need to be assessed individually in each impacted jurisdiction. Most jurisdictions require a level of certainty that the deal is going ahead as well as an understanding of the nature of the deal and related steps.
Key Takeaways for Deal Teams
Don't forget FDI and consider strategy early alongside merger control
Think about the critical/sensitive sectors
Consider whether the investor or acquirer is high-risk, as that can impact the national security assessment
Assess whether multiple filings might be needed to capture transactional steps
Determine if approval is needed prior to clearance
Plan deal timings carefully and allow time for clearance as often approval will be needed prior to closing
Consider relevant conditions precedent and transactional warranties
Understand how prescriptive and transparent remedies or conditions are in each jurisdiction
Be aware of penalties: fines, criminal sanctions and deals can be void
Helpful Resources
For detailed country-by-country guidance on FDI screening requirements across 18 jurisdictions, download our Foreign Direct Investment Jurisdictional Guide.
Get in Touch
Bird & Bird operates as 'One Firm' across 33 offices in 24 countries, advising clients on global transactions involving FDI and merger control. Our multi-jurisdictional capabilities mean we can manage all aspects of FDI analysis and filings across multiple jurisdictions simultaneously, ensuring seamless coordination.
If you have questions about FDI screening for your transactions or would like to discuss how these developments may impact your cross-border deals, please contact one of our speakers.
The Panel and Contacts:
Anthony Rosen, Legal Director, UK
Tamy Tietze, Senior Associate, Germany
Baptist Vleeshouwers, Counsel, Brussels / Belgium
Tialda Beetstra, Senior Associate, Netherlands
Tenisha Cramer, Associate, UK
Jacopo Nardelli, Counsel, Italy
Maria Karpathakis, Senior Associate, Finland
If you would like to watch the full webinar recording, please contact one of the speakers.
