Two years of FDI screening in Belgium and the Netherlands: lessons learned and what to expect

Since FDI regimes were introduced in Belgium and the Netherlands, in July 2023 and June 2023 respectively (see our previous updates reflecting on the first year of enforcement here (for Belgium) and here (for the Netherlands)), foreign investments in both countries have declined (by 2% in Belgium in 2024 and 6% in the Netherlands, compared to an average decline of 5% in the EU).  On the occasion of their second birthdays, we examine what lessons can be learned from the regimes in action, how they compare against each other and what to expect in the future.

For an overview of the regimes see our previous blog posts here (for Belgium) and here (for the Netherlands).

FDI screening in Belgium and the Netherlands

The Belgian and Dutch FDI regimes have many similarities: both are suspensory and mandatory in nature, and both were the result of a delicate balancing exercise between safeguarding national security interests and preserving an open investment climate. There are however also several stark differences:

• Investor scope: The Belgian regime applies to non-EU investors, a concept that is interpreted broadly in practice. For example, a single new non-EU entity in the holding chain above the investor, including a single ultimate beneficial owner (UBO) registered outside the EU, would qualify the investor as “non-EU”. The Dutch regime on the other hand applies to all investors, even Dutch ones (in that sense it is not a foreign investment screening tool per se). Indeed, the majority of investments notified in the Netherlands so far originated from Dutch investors.

• Sector scope: The Dutch regime applies to a relatively narrow set of sensitive sectors and technologies, with a precise definition of the sectors covered. Meanwhile, the sensitive sectors under the Belgian regime are described in broad terms that are open to interpretation (e.g. activities related to “energy”, “transport” or “security”). The Belgian regime also applies to companies with “access to sensitive information, including personal data”. That begs the question whether any access to personal data, for example routine customer data, could trigger a filing, or only highly sensitive personal data as defined in Article 9 of the GDPR. The former would cast the net of the Belgian screening regime particularly wide.

• Precautionary filings in Belgium: The broad definition of non-EU investors and the far-reaching scope of sensitive sectors, coupled with the advice of the Belgian FDI regulator “to file whenever in doubt”, often means that a filing requirement cannot be excluded with certainty. This often leads investors to make a filing on a precautionary basis. More guidance from the regulator would enable investors to make more informed filing decisions.

• Black box reviews: In both Belgium and the Netherlands the review process is still largely a black box, partly because the review relies on classified information provided by the intelligence services. An added complexity in Belgium is that the regulator includes representatives from nine Belgian governments and commissions, each with their own mandate and specific interests. The Belgian intelligence services can also review notifications and initiate an in-depth Phase II investigation without disclosing any reasons or specific concerns (something we have seen in practice).

• Sectoral regimes in the Netherlands: A peculiarity and complexity of the Dutch regime is the interplay between the general screening regime and separate screening rules covering the telecom and energy sectors (as well as the upcoming separate defence screening rules). For example, if the activities of the target fall within the scope of a sectoral regime, the general Dutch screening regime does not apply. That is the case even when (1) an actual filing is not triggered under the sectoral regimes because the other filing thresholds are not met, and/or (2) the target also has activities that are covered by the general screening regimes but not by the sectoral regime.

• Approach towards internal restructurings: An issue that often comes up in practice is that the Belgian regime explicitly covers internal restructurings. 16% of the notifications made in Belgium in 2024 involved internal restructurings, and in 81.8% of such cases, the UBO remained unchanged. In contrast, the Dutch regulator has clarified that pure internal restructurings are generally exempt from the regime. If this approach were to be mirrored in Belgium, it would enable a more efficient allocation of resources to better support the regime’s security and public order objectives. This would also align with the approach taken in other (more mature) regimes in the EU (e.g. Germany) as well as in the latest draft of the new EU FDI Screening Regulation, which excludes internal restructurings from FDI screening provided there is no ultimate change of control.

• Room for informal consultation: In our experience, the Dutch regulator is generally open and willing to provide informal guidance within short timeframes. Investors are able to clarify whether the Dutch regulator considers the target’s activities falls within a sensitive sector, helping to avoid unnecessary filings. By contrast, opportunities for informal consultation with the Belgian regulator are limited. While the Belgian Secretariat plays a key role in coordinating the screening process and is responsive, it cannot influence decision-making or engage in substantive pre-notification discussions, being restricted to procedural matters only. We would encourage the Belgian governments to enhance their regulator’s competences to provide informal (pre-notification) guidance in any updates and revisions of the Belgian FDI regime.

• Approach towards fund investors: The Dutch regulator adopts a cautious and detailed approach in its assessment of fund investors. In our experience, the regulator frequently requires extensive information about the financial structure underpinning a transaction. This often involves disclosing the identities of minority investors, including those holding less than 10% of voting rights. The Dutch regulator is particularly attentive to minority investors who, despite a relatively small shareholding, may be able to exercise a disproportionate degree of influence over the target.
  
  Moreover, there is particular scrutiny of investors originating from jurisdictions considered to be high risk, such as Russia, China, or certain Middle Eastern countries. These investors face rigorous questions and documentation requirements. Notably, even passive investors – such as limited partners in PE funds who do not have controlling rights – can be required to disclose detailed information. This disclosure threshold can be applied to capital commitments as small as 2.5%. Fund investors can also expect scrutiny in Belgium. The Belgian notification form requires investors to disclose the identities of the fund managers and the entities or individuals that control them. In practice, however, and at least in no-issues cases, the Belgian regulator adopts a pragmatic approach, accepting a description of the chain of control up to the general partner (GP), combined with high-level information on the type of limited partners involved in the fund structure. In one Belgian PE fund transaction, it is unclear whether the fund's structure was one of the potential concerns that led to its Phase II review.

The regimes in figures 

• In 2024, 61 notifications were made under the general Dutch FDI regime and 10 under the sectoral regimes. In Belgium, 68 notifications were made between 1 July 2023 and 30 June 2024.

• Of the 68 Belgian filings, 53 investments were authorised and none blocked. However, a number of Phase II investigations were opened. The Dutch outcomes were more varied. Of the 83 deals investigated in 2024 (some of them had already started in 2023), 48 received unconditional approval, 3 were approved with conditions and 1 transaction was prohibited. The remainder were either withdrawn, found to fall outside the regime’s scope or were still pending at the end of the year.

• The sectoral focus also differs between the two jurisdictions, reflecting the different sectors covered by the regimes. In Belgium, the most affected sectors included data, health, and digital infrastructure. The Netherlands predominantly handled cases involving the industrial sector and information and communication, with additional attention to energy, healthcare, and telecommunications.

Timelines

Process visibility and review timelines further present a key point of distinction: 

• The Dutch regulator is often praised for transparency and pragmatism. Cases are typically resolved within the statutory time frames (i.e. 8 weeks from receipt of a complete notification form), with half of them concluded in 35 to 72 days. However, there were also outlier cases where the total length of the investigation exceeded 300 days. Extensions are possible (and were used in roughly 10 cases in 2024), but the regulator consistently communicates progress and rationale throughout the review. This results in greater predictability for investors. 

• In Belgium the process is less transparent, although straightforward cases progress quickly and smoothly in our experience. The average Phase I (verification) review lasted 31 days. More complex cases may face in-depth investigations that can extend for more than 6 months with unpredictable timelines and minimal updates to the notifying parties, particularly where sensitive issues arise, or when the Belgian state intelligence services are involved.

What’s next?

The Netherlands

There are several developments that will likely materialise in the upcoming year and have a major impact on investment screening in the Netherlands:

• New legislative proposal to expand sensitive technologies: A legislative proposal is pending for an expansion of the sensitive technologies covered by the Dutch FDI regime. The expansion is expected to bring an additional 1,015 Dutch companies within the scope of the regime. Concretely, the proposal is to bring biotechnology, artificial intelligence, advanced materials, nanotechnology, sensor and navigation technology, as well as nuclear technology for medical use within the scope of the regime. The scope of these additional categories will be strictly demarcated. For example, AI technologies will only be labelled sensitive if they relate to AI for identification or impersonation of persons or groups for specific security-related purposes, or AI for services or products supporting military deployment or security organisations.
  
  Furthermore, several technologies previously classified as “sensitive” – including information security and laser satellite communications – will now be deemed “highly sensitive”. That means minority investments of as little as 10% of the voting rights in Dutch targets operating in these areas could trigger a filing obligation.
  
  These changes were expected to be implemented in the second half of this year. However, given the recent collapse of the Dutch government, delays to adoption are expected. Nevertheless, as the proposal bears substantial political support, we do not anticipate it being sidetracked for long. 

• New sector-specific defence screening regime: Another legislative proposal to introduce a sector-specific screening regime for the defence sector is currently progressing through the legislative process and is expected to be adopted in 2026. The relationship between this sector-specific regime and the general screening regime is not straightforward, as the general regime also covers military and dual-use technologies. Where an investment falls within the scope of both regimes, the defence regime will take precedence. At the same time, there are differences in assessment criteria: the defence regime involves a narrower risk analysis limited to defence interests, whereas the general screening regime applies a broader assessment connected to national security and interests.

• Lowering of the energy sector investment screening thresholds: Finally, the current notification thresholds under the energy-sector specific regime for investments in Dutch target energy production assets will be lowered from the current 250MW nominal generation capacity to 100MW, starting from 1 January 2026.

Belgium

In 2025, the Belgian FDI regime will be subject to its first formal evaluation. Any progress on some of the complexities and uncertainties set out above (that have a major impact in practice) will, however, hinge on collaboration among Belgium’s multiple governments – a process that may be challenging in the current political context and in the absence of a Brussels government.