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ARTICLE · 12 DECEMBER 2024

Final Rule On Outbound Investments: Implications For Limited Partner Investments

K&L Gates
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On 28 October 2024, the US Treasury Department issued a Final Rule implementing the Outbound Investment Program (OIP) under Executive Order 14105...

United StatesStrategy
Steven F. Hill
Steven F. Hill
Nathaniel Bolin
Nathaniel Bolin
Myeong S. Park
Myeong S. Park

Introduction

On 28 October 2024, the US Treasury Department issued a Final Rule implementing the Outbound Investment Program (OIP) under Executive Order 14105, which safeguards US national security by limiting investments by US persons in key technologies in "countries of concern," specifically China including Hong Kong and Macau. Effective 2 January 2025, the OIP targets outbound investments in Semiconductors and Microelectronics, Quantum Information Technologies, and Artificial Intelligence by prohibiting certain transactions and permitting other transactions subject to a notification requirement (together, "covered transactions").

While the OIP's coverage is complex and requires significant diligence, certain investments are exempted. These include passive investments in listed securities like index and mutual funds, Limited Partner (LP) investments in pooled funds, intracompany transactions supporting ongoing operations, and transactions fulfilling

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