What is FDI / national-security investment screening, and when does it become relevant?
FDI (foreign direct investment) screening lets a government review acquisitions of domestic companies by foreign investors to protect national security. Most major economies have a regime — CFIUS in the US, FIRB in Australia, the EU FDI Screening framework, and national screens across Europe.
When does it trigger? In security-sensitive sectors — defense, critical infrastructure (energy, water, telecom, health), sensitive technologies (AI, quantum, semiconductors) — sometimes from as little as a ~10% stake. In other sectors from a higher threshold (e.g. ~25%), typically for non-domestic investors only. Pre-notification cuts the risk sharply and is now standard for cross-border buyers.
Deep diveShow more details
| Stage | Duration | Outcome |
|---|---|---|
| Pre-notification | 4–6 weeks, informal | comfort letter / clearance |
| Formal notification | 2–3 months | approval or conditions |
| In-depth review | up to ~5 months | where security concerns exist |
| Prohibition | very rare | investment blocked |
cross-border acquisitions of robotics, semiconductor, and energy-infrastructure targets have variously been cleared with conditions, blocked outright, or resolved by a state promotional bank taking a stake to keep the asset domestic.
screening can extend closing by 3–5 months, or 6–8 with an in-depth review. Pre-notification reduces the risk sharply.
Question: "When is FDI screening relevant to your deal?"
Answer: "With a non-domestic sponsor — US, UK, China — and a target in a sensitive sector like tech, defense, or critical infrastructure. Standard practice: pre-notify for all cross-border buyers, because scrutiny has tightened. For some acquirers an in-depth review is almost automatic."