Businesses investing across borders, take note! On 8 June 2026, the EU adopted a regulation overhauling its current framework for screening foreign direct investments (FDI) by non-EU investors on grounds of national security and public order. After the entry into force of the regulation, which will occur 20 days after its publication in the Official Journal of the EU, Member States will have 18 months to align their national FDI screening mechanisms with the new EU requirements. Regulators across Europe are preparing to review their existing rules and procedures and to bring them into line with the regulation by 2028.
The new regulation is part of the Commission’s 2024 package on strengthening the EU’s economic security and replaces the existing EU FDI screening framework, which has been in force since 2020. Building on its predecessor, the revised regulation seeks to improve the cooperation mechanism currently in place between Member States and the European Commission. The new rules also aim to ensure a more coordinated and effective approach across the EU to safeguarding national security and public order. In particular, the regulation seeks to reduce divergences in scope, standards, timelines and procedures between national FDI screening mechanisms.
While Member States will still have some leeway in deciding which investments to screen, the new regulation is tightening the net. The revised regulation requires national FDI screening mechanisms to cover a minimum set of sensitive sectors, including dual-use items and military equipment, critical raw materials, AI, and energy, transport and digital infrastructure. As many Member States (including Belgium) already do, national FDI screening regimes will also have to impose a notification requirement on non-EU investors investing in a target through an EU-based subsidiary.
You can find the text of the new regulation here.
For more information, please contact our experts.
