EU Moves to Strengthen Foreign Investment Screening

The new framework moves beyond the coordination-based approach of the previous regulation and introduces mandatory minimum standards for foreign direct investment (FDI) screening throughout the EU. While Member States retain flexibility to expand their national programs, all will be required to maintain investment screening mechanisms and apply common procedural safeguards.

Key developments include:

• Expanded scrutiny of investments involving strategic sectors such as defense, aerospace, artificial intelligence, semiconductors, critical infrastructure, healthcare, and critical raw materials.
• Greater oversight of transactions structured through EU entities that are ultimately controlled by non-EU investors.
• Stronger cooperation and information sharing among Member States and the European Commission.
• Increased transparency through reporting requirements and centralized investment databases.
• A growing emphasis on national security and public order considerations in cross-border transactions.

For industries such as aerospace and defense, the regulation is expected to increase regulatory review and coordination across Europe, particularly for transactions involving sensitive technologies or critical industrial capabilities.

The new rules will apply beginning January 17, 2028, giving Member States time to adapt their national frameworks.

➡️ Read the full analysis here: New Regulations on Foreign Investment Control in the European Union – Augusta Abogados