While the actual screening of FDIs in their respective territories is the jurisdiction of the individual Member States, the European Commission plays an important coordinating role.
European Regulation
A European Regulation (Regulation (EU) 2019/452) establishing a framework for the screening of foreign direct investments into the Union entered into force on 10 April 2019. This Regulation, which primarily governs the potential cross-border safety and public policy implications of FDIs in the European Union, sets out procedural rules for the Member States to adopt. These include the obligation for Member States to exchange information, the possibility for the European Commission to issue non-binding advice to Member States and minimum standards that national FDI regimes must satisfy.
In addition, the EU Foreign Subsidies Regulation (FSR) (Regulation (EU) 2022/2560) introduced a wide-ranging set of rules and European Commission powers to prevent financial advantages provided by third countries from distorting competition within the EU internal market.
FDI in the Netherlands
A general FDI screening regime was introduced in the Netherlands on 1 June 2023. The FDI regime is governed by the Vifo Act (Wet veiligheidstoets investeringen, fusies en overnames) which aims to protect the Netherlands’ national security, public order and allies. The Vifo Act is enforced by the Dutch Investment Screening Bureau (Bureau Toetsing Investeringen, or BTI) in respect of all investments in undertakings carrying out relevant activities in the Netherlands, irrespective of the investor’s nationality or target undertaking.
The Vifo Act cover these relevant sectors and activities:
- vital services, infrastructure and management of business campuses;
- sensitive technologies and highly sensitive technologies; and
- sector-specific frameworks in mining, natural gas, telecommunications and electricity.
Vital Services, Infrastructure and Business Campuses
This category contains vital services and infrastructure that must be maintained to ensure the normal functioning of the Dutch society. These include heat transport, nuclear energy, civil aviation, activities related to the port of Rotterdam, banking, capital markets, natural gas exploration and transport, and natural gas storage. A business campus is defined as an area with public-private partnerships for working on technologies and applications that are of economic and strategic importance to the Netherlands.
Sensitive Technologies and Highly Sensitive Technologies
Sensitive technologies and highly sensitive technologies include dual-use products (Annex I EU Dual-Use Regulation (EU 2021/821), the EU Military Goods List (2020/C 85/01) and quantum mechanics, semiconductor technologies (manufacturing know-how, industrial production equipment and design software), high assurance technologies and photonics.
Mining, Natural Gas, Telecommunications and Electricity Sectors
The mining, natural gas, telecommunications and electricity sectors already have their own sectoral FDI notification rules in place.
To find out more about the relevant rules and regulations, read our ICLG publication.
Houthoff’s FDI Team
We advise clients on how Dutch and European regulations apply, the chances that the BTI will object to a specific investment, and how to optimise transactions and remedies in the event of such an objection. Drawing on our extensive international network, we also advise on risks and reporting obligations in other jurisdictions. We furthermore coordinate notifications for our clients in various jurisdictions: both regular merger notifications and the full FDI notification process.
