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ARTICLE · 23 DECEMBER 2025

EU Greenlights Mandatory FDI Screening Overhaul

A&O Shearman
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The Council and European Parliament have reached a provisional agreement to significantly revise the EU foreign direct investment (FDI) screening framework.

GlobalGovernment, Public Sector
Francesca Miotto
Francesca Miotto
Dr. Udo Herbert Olgemöller
Dr. Udo Herbert Olgemöller
Nicolas Tselikas Bouzeau
Nicolas Tselikas Bouzeau
Jochem de Kok
Jochem de Kok
Stephan Bühner
Stephan Bühner
Louise Tolley
Louise Tolley
Author LinkedIn connections

The Council and European Parliament have reached a provisional agreement to significantly revise the EU foreign direct investment (FDI) screening framework. The reform will require all member states to maintain screening regimes, set a minimum scope covering the most sensitive sectors and technologies, and reinforce cooperation between national authorities and the European Commission (EC).

Under the revised framework, decision-making power will remain at the national level and substantial differentiation will remain. Nevertheless, investors can expect a more harmonized, structured, digitally enabled process and greater accountability in multi jurisdictional cases.

The new rules are expected to apply 18 months after entry into force.

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