Foreign investment developments in 2022

EU Law

2022 marks the second year of the EU Foreign Direct Investment (FDI) Regulation, and the year in which legislators haven been busy shaping the Dutch national security screening regime and the EU Foreign Subsidies Regulation, which will enter into force in 2023. Get ready for more action!



FDI regimes in the EU have been an increasing topic of discussion in recent years. Recent numbers show that 25 of the 27 EU member states have an FDI regime in place or are in the process of creating one. Of the 414 notifications made to screening authorities of EU Member States in 2021:

  • the majority have been approved unconditionally (76%);
  • 23% have been approved under conditions;
  • the transaction was blocked in only 1% of cases;
  • 86% of the notified transactions were closed in Phase 1, with only 11% closed in Phase 2; and
  • the Commission issued a non-binding opinion in only 3% of the cases.

Based on these figures, there is no need for companies to worry about their transaction – but these processes do of course have implications for deal timelines.

The Netherlands

The Dutch legislature had a busy year, finalising the national security screening review (Wet veiligheidstoets, investeringen, fusies en overnames, “Vifo Act”) and separate orders providing further details (see here and here). The Vifo Act is expected to enter into force in the first half of 2023 (see the most recent update from the government). This new Act will apply alongside the current sector-specific FDI regimes for telecommunications, gas and electricity, and will have retroactive effect for transactions implemented from 8 September 2020 until the date of its entry into force. See our earlier (newsletter) articles on the topic (here, here and here).

In short, the Vifo Act will require certain transactions related to vital providers, companies active in (very) sensitive technology, and business campuses to be notified to the BTI. Specifications as to what is understood by vital providers, companies active in sensitive technologies and business campuses can be found in the final text of the Vifo Act or in separate orders. Guidelines are expected to be published by mid-2023 with further information on the application of the Act regarding business campuses.

In addition to the Vifo Act, the Dutch legislature has been working on legislation regarding investments in the defence sector. It is not clear exactly when a draft will be published.

Also, the Dutch Investment Screening Desk (BTI) has published some figures on screenings on the basis of the Electricity, Gas or Telecommunications Act. Between 2018 and (September) 2022:

  • the BTI unconditionally approved 12 out of 14 transactions;
  • 1 transaction was declared inadmissible and only 1 was revoked;
  • no transactions were made subject to conditions or blocked; and
  • the average timing for a screening to be completed was 9 weeks.

Foreign Subsidies Regulation

In addition to FDI, another transactional hurdle for M&A was finalised in 2022. After negotiations between the European Council and the European Parliament, the EU Foreign Subsidies Regulation (FSR) was formally adopted by the European Council on 28 November 2022 and entered into force on 12 January 2023. An implementing regulation is expected mid-2023.

The FSR aims to level out the playing field between European and foreign-backed companies active on the EU’s internal market by being more watchful of foreign financial contributions in M&A and public procurement transactions. From October 2023, notifications will be required for M&A transactions if the following thresholds are met:

  • at least one of the merging companies (in the case of a full merger), the target (in the case of an acquisition) or the joint venture is established in the EU and generated an aggregate EU-wide turnover of at least EUR 500 million in the preceding financial year; and
  • the parties to the transaction have received combined foreign financial contributions exceeding EUR 50 million in the three years prior to the conclusion of the agreement, the announcement of the bid, or the acquisition.

A notification is required for companies engaging in public tenders, if:

  • the contract value is equal to or higher than EUR 250 million; and in cases where the tender is divided into lots, the aggregate value of the lots applied for is equal to or higher than EUR 125 million; and
  • the bidding party (including its subsidiaries and/or holding company) and its main subcontractors (or suppliers) received aggregated foreign financial contributions equal to or higher than EUR 4 million in the three years prior to the notification. Bidding parties that remain below EUR 4 million are still required to submit a declaration confirming that they are below the filing threshold.

Additionally, the European Commission has ex officio investigative powers and may request parties to M&A deals/public tenders to notify prior to their implementation/award. It should also be noted that a standstill obligation applies, as in the case of merger control and FDI. Companies may not implement their concentration or award the tender prior to clearance.

Key dates & periods

12 January 2023

FSR entry into force.

First half of 2023

Vifo Act entry into force (including separate orders regarding sensitive technologies and practicalities).

Expected mid-2023

FSR implementing regulation.

Expected mid-2023

Vifo Act guidelines about business campuses.

12 July 2023

FSR investigations may commence.

12 October 2023

Notification requirements for certain transactions and public procurement procedures under the FSR.

This article was published in the Competition Newsletter of January 2023. Other articles in this newsletter: