CELIS Update on Investment Screening and Economic Security – November 2025
By Helene Schramm with the help of intern Maria-Arancha Simiuc
INVESTMENT SCREENING MECHANISMS
Cyprus – Cyprus Adopts First Comprehensive FDI Screening Law
The Republic of Cyprus has enacted its first comprehensive Foreign Direct Investment Screening Law on 14 November 2025, entering into force on 2 April 2026.
The new framework introduces mandatory prior notification and approval for foreign direct investments involving non-EU/EEA/Swiss investors when they acquire at least 25% participation in undertakings operating in “particularly sensitive sectors.” These sectors include critical infrastructure, critical technologies, access to sensitive information, media pluralism and essential inputs such as energy and raw materials. Investments meeting a €2 million threshold and involving an “undertaking of strategic importance” must be notified to the Ministry of Finance, which acts as the competent screening authority. The law also triggers notification when investors increase their stake above key thresholds (25% or 50%), regardless of transaction value.
It grants the screening authority the power to review even non-notifiable transactions within 15 months – or five years if a mandatory filing was omitted. An Advisory Authority of seven ministries will support the review process, and non-compliance may lead to prohibition, reversal or other corrective measures. The law aims to align Cyprus with EU-wide FDI screening practices while providing detailed criteria to assess risks to national security, public order and EU interests.
For more detailed insights, please stay tuned for the forthcoming blog post by CELIS Country Reporters Pantelis Christofides and Thomas Papadopoulos.
Global – OECD 2024 Index Shows Slight Rise in Global FDI Restrictiveness Amid Heightened Security Concerns
The OECD released its 2024 FDI Regulatory Restrictiveness Index (“FDIRRI”), presenting key findings and trends in global FDI regulation. The FDIRRI measures restrictiveness of rules on foreign direct investments, identifying regulatory trends, assessing the impact of restrictions, and tracking FDI liberalization. The index measures FDI restrictions across four categories: (i) foreign equity limits, (ii) screening and approval mechanisms, (iii) restrictions on key foreign personnel, and (iv) other restrictions. Policies across these categories and in different sectors are evaluated on a scale from 0 (fully open to FDI) to 1 (fully closed to FDI).
In 2024, a key consideration was whether the global policy trend has turned against foreign investment. The OECD identified two opposite trends. On the one hand targeted liberalisation has continued and some non-OECD countries removed specific foreign ownership limits. On the other hand, security- and strategic-based conditions on FDI were reinforced. OECD countries, in particular, revised screening mechanisms in response to rising geopolitical tensions, focusing new restrictions on energy, critical minerals, and financial services. Notably, for the first time in six years, FDI restrictiveness increased slightly in 2024. The most common restrictions are foreign equity limits (60%), especially in real estate, media, transport, and agriculture.
The report underlines the positive impact of FDI liberalisation on economic productivity and stresses that security and resilience measures should not undermine the promotion of beneficial investments.
European Union – European Commission Releases Fifth Annual FDI Screening Report
On 14 October 2025, the European Commission published its Fifth Annual Report on FDI screening in the Union. The report reviews national and EU-wide developments as well as the EU’s cooperation mechanism. The 2024 findings reflect member states’ efforts to balance openness to foreign investment with the protection of security and public order. While most transactions were authorised unconditionally, the growing number of screenings shows increasing vigilance. The report notes that screening has focused more on security and critical-technology risks, leading to a rise in reviews in the manufacturing, defence and semiconductor sectors. Under the cooperation mechanism, most cases were closed at an early stage, and the Commission issued opinions in only 2% of notified cases.
The report highlights continued progress in cooperation between member states, with new screening mechanisms entering into force in Bulgaria and Ireland, while Croatia, Cyprus and Greece advanced towards adopting screening regimes. However, the report also notes shortcomings of the current EU FDI screening framework, related to regulatory fragmentation and the lack of a standardized approach to FDI screening across countries. For instance, not all member states have screening regimes and established mechanisms show essential differences in screening scopes, resulting in over 500 filings in Romania compared to just around 30 in the Czech Republic.
Finally, a future outlook is provided, focusing on the revision of the FDI Regulation proposed by the Commission in January 2024, which includes mandatory screening across member states, minimum harmonisation of national screening laws and improvements to the cooperation mechanism. Furthermore, the report mentions that the EU plans to review outbound investment in semiconductors, artificial intelligence and quantum technologies.
France – France Reports Record FDI Filings and Highest EU Rate of Conditional Approvals in 2024
The French Treasury published its 2025 Annual Report on FDI control in France. The report notes a record 392 FDI filings in 2024, following the upward trend of the past years. Most filings were made to the ministry for economy for prior authorisation of investments (327). Of these, 182 investments were approved, 54% of them with mitigating measures or conditions. This represents the highest rate of conditional approvals in Europe, marking a further increase compared to previous years and confirming France’s firm stance on safeguarding national economic security. The report notes that investors can later request a review of conditions, and in 2024 seven out of eight requests were approved.
Only a small number (six over the past three years) of requests for prior authorization have been rejected, most other investments fell outside the regulation scope or were withdrawn. Additionally, some filings were made by companies and investors to clarify applicability of FDI rules, and by non-EU investors upon crossing a critical 10% voting rights threshold in publicly listed companies. Other aspects of FDI screening highlighted by the report include expedited proceedings for companies in financial distress and the screening of investments in critical technologies.
Moreover, on 30 July 2025, the French Treasury released an updated version of the FDI Guidelines, replacing the 2022 edition following significant regulatory changes. These include a broader screening scope and an expanded protection perimeter covering critical raw materials and key technologies. The guidelines aim to ensure a transparent review process and assist foreign investors in applying FDI rules. They clarify the processes of control, preliminary review and authorization of FDI, for instance by explaining conditions for crossing crucial thresholds and the applicability of the FDI regime to greenfield investments.
ECONOMIC SECURITY STRATEGIES
Netherlands – Dutch State Tightens Grip on Chipmaker Nexperia to Safeguard Europe’s Semiconductor Supply Chain
On 30 September 2025, the Minister of Economic Affairs, Vincent Karremans, signed an order granting the state powers to block or reverse any corporate decision of Nexperia and its 30 global entities if they are deemed “(potentially) harmful to the interests of the company, to its future as a Dutch and European enterprise, and/or to the preservation of this critical value chain for Europe.”
Nexperia manufactures low-margin semiconductors in vast quantities for consumer electronics and a wide range of industrial applications, thereby playing a critical role in Europe’s automotive supply chain. Since 2019, Nexperia has been majority-owned by the Chinese technology group Wingtech.
The Dutch government’s unprecedented intervention in Nexperia marks a striking expansion of regulatory power amid growing geopolitical and economic-security pressures. When reports surfaced that parts of Nexperia’s semiconductor operations could be shifted to China, the Netherlands activated a 70-year-old emergency law—the Goods Availability Act—to give itself sweeping authority to block or reverse the company’s strategic decisions.
This extraordinary step, taken alongside separate court-ordered governance measures, raises serious questions about the measure’s compatibility with the protections afforded to Wingtech under the China–Netherlands BIT.
Moreover, the timing strongly suggests that U.S. export-control actions and geopolitical pressure played a decisive role, complicating the narrative of a purely Dutch economic-security initiative. As this episode shows, economic security, industrial policy, and geopolitical alignment are increasingly intertwined. The Nexperia case may therefore become a key test of how far states can stretch emergency powers without undermining investor confidence and established treaty protections.
