2026 FDI and National Security Review

The Evolving Global Landscape 2026

FDI and National Security Review

Contents

Australia

Belgium

China

European Union

France

Germany

Ireland

Russia

Singapore

United Kingdom

United States

FDI and National Security Review

Executive Summary The global national security and foreign direct investment (FDI) review landscape continues to evolve. Investment screening has become a common feature of cross-border regulation, particularly among advanced economies, and many jurisdictions have introduced, expanded or refined mechanisms to assess foreign investment on national security, public order or economic security grounds. At the same time, regimes implemented in recent years are maturing, the United States and its allies are coordinating more closely on investment security strategy, and certain affected jurisdictions are developing countermeasures. As FDI regimes proliferate and mature around the globe, governments are taking an ever-more expansive view of the concept of “national security,” to include more than military and defense interests. In many cases, “national security” now extends to advanced technology, sensitive data, critical infrastructure, communications assets, critical inputs and supply chains. In many jurisdictions, lower jurisdictional thresholds, broader definitions of “investment” and “control,” and expanded sectoral coverage mean that FDI reviews can be triggered by transactions that historically may not have raised filing or approval issues. The United States and its allies are also increasingly cooperating to scrutinize certain categories of investment, including investment linked to China or other strategic competitors in critical technologies, critical infrastructure and supply-chain-sensitive sectors, including semiconductors. At the same time, countries continue to encourage “friend-shoring” and other supply-chain resilience strategies, with investment from trusted jurisdictions often receiving a different regulatory reception than investment involving strategic competitors, state- linked actors or sensitive technology transfer risk. The current U.S. administration has paired a renewed commitment to open investment from allied and partner countries with a more restrictive posture toward China and other foreign adversaries. Treasury is developing the

Known Investor Program to create process efficiencies for certain qualifying foreign investors, while the administration has also made clear that it intends to use CFIUS and other legal authorities to restrict inbound investment from China and other foreign adversaries in strategic sectors and to deter certain outbound investment by U.S. persons into sensitive technologies linked to countries of concern. Outbound investment controls are now part of the U.S. national security regulatory architecture and are likely to influence policy development in other major economies. The United States’ outbound investment review regime became effective on January 2, 2025. In its current form, the U.S. outbound review mechanism reviews and prohibits certain outbound investments by U.S. investors to protect U.S. national security and safeguard U.S. supply chains from certain countries such as Russia and China. With the passage of recent legislation codifying the U.S. outbound investment regime, the rules will be expanding to cover investments in new national security sectors. Those changes will require implementing regulations, and investors should distinguish between the rules currently in force and the broader statutory framework that Treasury is expected to implement. Although China, Taiwan and South Korea have forms of outbound investment review mechanisms, the U.S. outbound investment review mechanism is the first of its kind to be adopted by a major Western economy. The European Union has also moved in this direction through a recommendation calling on Member States to review outbound investments in semiconductors, artificial intelligence and quantum technologies, which may inform future EU or Member State measures. FDI regulations often cast a wide net: there are multiple FDI regimes that feature a broad jurisdictional nexus, such that even relatively small transactions may be captured as well as investments involving limited governance and control rights. As regimes expand in scope, outcomes are becoming increasingly uncertain. Both buyers and sellers should undertake early diligence to identify the investment screening regimes implicated by proposed transactions and, in appropriate cases, develop mitigation

Executive Summary

or advocacy strategies before presenting transactions to regulators. In other cases, parties can prepare in advance for likely regulatory outcomes, reducing uncertainty and compliance risk. Such steps can help parties preserve transaction certainty, manage regulatory timelines, and reduce the risk that national security concerns become a gating issue late in the deal process. Dealmakers should monitor these developments as they may meaningfully impact the ability to deploy capital and close transactions. Dealmakers should evaluate FDI screening risk early in the transaction process, with careful attention to the identity and ownership of investors, the sensitivity of the target business, technology transfer risk, government touchpoints, data exposure, supply-chain dependencies and potential geopolitical signaling. In the following sections, we contextualize current trends in a focused set of jurisdictions to assist cross-border dealmakers with understanding the headwinds and assessing how best to manage FDI-related considerations from the start of the transaction process to avoid impediments to closing. Dechert regularly advises foreign and domestic entities through the FDI review process, helping them determine if they should bring a transaction before regulators, assess the legal, political and policy considerations that may shape regulatory review, assemble the required information for a filing and then (as necessary) negotiate with the review body in a manner that minimizes both delay and the imposition of conditions that might threaten the transaction. Dechert lawyers also advise on the U.S. outbound investment rules now in effect and are closely monitoring the implementation of the expanded U.S. statutory framework and the development of outbound investment review initiatives in the EU and other jurisdictions.

FDI and National Security Review

Australia

Key Considerations ^ Changes to Australia’s FDI regime have expanded the Australian Treasurer’s Foreign Investment Review Board (FIRB) jurisdiction in recent years. ^ Following public consultation in late 2025, the Australian government has announced a package of legislative, policy and practice reforms (the “FIRB Reforms”) as part of its 2026-2027 Budget. Key reforms include: automating approvals for low-risk transactions, expanding exemptions from mandatory notification, broadening the Treasurer’s conditions and enforcement powers, and revising reporting obligations under the Register of Foreign Ownership of Australian Assets (the “Register”). Treasury will develop the details of the legislative reforms, and stakeholders will have an opportunity to comment through consultation on exposure draft legislation towards the end of 2026 or in 2027. ^ The ban on foreign investors purchasing established homes remains in place until June 30, 2029. Limited exceptions apply, such as in the build-to-rent sector or purchases by Australian and New Zealand permanent residents. ^ Private equity funds with non-Australian investor participants should also consider whether they would be characterized as Foreign Government Investors (FGIs), and whether an exemption to being characterized as an FGI (or to the specific action contemplated) could apply. Almost every transaction in which an FGI seeks to acquire a direct interest in an Australian asset or entity will require FIRB approval.

FDI Regime Overview FIRB is the governmental agency tasked with reviewing FDI proposals and making recommendations to the Australian federal Treasurer about the proposed investment. The Treasurer will then issue a “no objection notification,” which is colloquially called a “FIRB approval” if the proposed investment passes muster. The last substantive update to Australia’s foreign investment regime occurred on May 1, 2024 – the Australian government increased scrutiny on high-risk investments and investments in sectors implicating national security concerns, while streamlining low-risk investment processes. According to FIRB’s most recent quarterly report, 33 of the 326 commercial foreign investments approved between April and June 2025 related to national security actions that would not have been captured prior to January 2021.

FIRB’s most recent quarterly report references four ongoing regulator audits at the end of Q2 (compared to five audits in FY24-25) and fifteen in-progress investigations (compared to seven investigations in FY24-25), evincing an ongoing focus on compliance. For example, earlier this year, the Federal Court awarded AU$14 million in penalties after two foreign investors failed to comply with a disposal order due to national security concerns. The FIRB Reforms propose to further strengthen enforcement through more targeted disposal and prohibition orders (including orders excluding particular entities from acquiring disposed interests) and strengthened anti-avoidance provisions. FIRB continues to update and enhance its Foreign Investment Portal, launched on May 28, 2025, to make lodging foreign investor applications easier. One such update is additional competition questions to address the Australian Competition

FDI and National Security Review

and Consumer Commission’s (ACCC) new merger control regime. Beginning on January 1, 2026, the regime requires parties to notify the ACCC of proposed acquisitions that meet certain thresholds. These include monetary thresholds for acquisitions resulting in large merged firms, acquisitions by very large companies of smaller targets, creeping or serial acquisitions, and acquisitions of assets that are not all or substantially all of the assets of a business. When such thresholds are met, an acquisition is required to be notified if the target is “carrying on business in Australia” and no exemptions – e.g., primary law, land or financial market exemptions – apply. To facilitate foreign investment, among other measures, in a competitive bid process, bidders can receive a full refund of their application fees, as opposed to a fee credit. From October 31, 2025 to December 12, 2025, the Treasury sought public feedback on proposed reforms to further streamline and strengthen its foreign investment framework. Following that consultation, the government announced the FIRB Reforms as part of its 2026-2027 Budget. These reforms include: (i) a new decision-making target for low-risk transactions of 30 days; (ii) overhauling the exemption certificate regime by enabling the Treasurer to adjust the operation of FATA for certain investors, including by amending their FGI status; (iii) new exemptions from mandatory FIRB approval for low-risk transactions (e.g., small percentage increases in existing holdings and certain land subdivisions); (iv) expanded mandatory notification requirements for investments in sensitive sectors (which are to be specified); (v) revised tracing rules focusing screening on circumstances where upstream entities have material interests or control; and (vi) an extension of the approval validity period from 12 to 24 months. The Treasury also published updates to Guidance Note 2, Guidance Note 6, and Guidance Note 10 to provide further guidance on the temporary ban on foreign purchases of established dwellings.

Pursuant to the Foreign Acquisitions and Takeovers Act 1975 (Cth) and the Foreign Acquisitions and Takeovers Regulation 2015 (collectively, FATA), non-Australian persons must notify FIRB of proposed acquisitions of interests in Australia that involve: ^ Agribusiness or agricultural land; ^ A “substantial interest” (i.e., an interest of 20% or more) in an Australian entity with an enterprise value of AU$347 million or more 1 ; and/or ^ Australian land holdings (other than agricultural land). When reviewing a potential investment, FIRB will consider the transaction’s impact on competition, the economy, the community and national security, as well as the character of the investor. Key aspects of the FATA include: 1. The adoption of a mandatory review requirement for acquisitions of interests of any size in a “national security business” and/ or “national security land” regardless of their value (i.e., AU$0 threshold). Under the FATA, the definition of “national security business” includes the following types of businesses: ^ Critical defense or intelligence goods or services; ^ Critical infrastructure; ^ Sensitive information (about defense and/or intelligence personnel); and ^ Telecommunications.

1 Thresholds are indexed every January 1. Different thresholds apply to the type of business (sensitive or not-sensitive) and the identity of the investor (e.g., investors from free trade agreement partners benefit from higher thresholds).

Australia

2. Timing Considerations: Extension of the 30-days review period up to 90 days at the discretion of FIRB or the Australian government more broadly. Once an application for review has been submitted, FIRB has 30 days to determine whether approval will be granted. FIRB can extend the review timeline for a few reasons, including if additional information is required. As part of the FIRB Reforms, from January 1, 2027, Treasury plans to implement a new performance target of deciding all low- risk transactions within 30 days. Low-risk transactions are expected to include those where (a) the applicant has received FIRB approval in the past 24 months, is not subject to extrajudicial decision, and has no record of non-compliance or character concerns, and (b) where the proposed action is not in a sensitive sector or business, has no national interest sensitivities, and has a straightforward and transparent corporate transaction structure. FIRB can extend the review timeline if it so chooses, and extensions are routine. According to FIRB’s most recent quarterly report, the median time period for FIRB to process investment proposals (other than for residential real estate) is 36 days. From January 1, 2025, FIRB has a target to process 50% of applications within the initial statutory deadline of 30 days. The FIRB Reforms are expected to further reduce processing times for low-risk applications from January 1, 2027 if the new performance target is retained. When considering transaction timing, parties should take a conservative approach in estimating the length of FIRB reviews. This is especially important to consider if filing with FIRB at the end of the calendar year or nearing a federal election, as there will be a standstill period prior to the election of the new federal government.

These categories cover broad swaths of the Australian economy. Under the Security of Critical Infrastructure Act 2018, the following qualify as critical infrastructure sectors: ^ Communications; ^ Data storage and processing; ^ Defense; ^ Energy; ^ Food and grocery; ^ Financial services and markets; ^ Healthcare and medical; ^ Higher education and research;

^ Space technology; ^ Transportation; and ^ Water and sewerage.

It is important to note that the Treasurer retains “call-in powers” (which may be expanded if the FIRB Reforms become law). Certain national security actions or other actions for which FIRB approval was not sought can be “called in” for review by the Treasurer for a period of up to 10 years after the action was taken if the Treasurer thinks that such actions pose national security concerns. It is therefore advisable to consider whether a FIRB application should be made if there is any grey area. Additionally, the Treasurer can re-review actions that previously were approved by FIRB (post-January 1, 2021) to determine whether a national security risk exists if there has been a material change in circumstance, or material misstatement or omission, in the FIRB application.

FDI and National Security Review

3. Certain investors, including FGIs, are subject to AU$0 thresholds, meaning FIRB approval is always required. FGIs include (i) foreign governments, (ii) separate government entities (e.g., public pension funds, endowment funds, state-owned enterprises, sovereign wealth funds and their portfolio companies), and (iii) corporations, trustees of a unit trust or general partners of a limited partnership in which: ^ FGIs from one country have a 20% or greater collective interest in the investor; or ^ FGIs from more than one country have a 40% or greater collective interest in the investor. As a result, a few investment funds, in particular private equity funds, will be FGIs if their investors/limited partners include FGIs. FGIs are typically subject to a AU$0 monetary value threshold, which means that FIRB approval will generally be required for any investments in Australian land or entities. There is an FGI exemption for investment funds that are FGIs where certain “passive investor criteria” are met (i.e., individual investors are not able to influence investment decisions or the management of any investments of the fund, no individual investor has an interest in the fund other than as a limited partner and the fund is a pooled investment vehicle). Such passive investor FGIs can also apply for exemption certificates. Under the FIRB Reforms, the Treasurer would be granted broader powers to issue exemption certificates that can “switch-off” or “adjust” the operation of FATA for certain investors – including by amending their FGI status, foreign personhood, the tracing rules, who is considered an “associate”, and reporting obligations. This may make it easier for purely passive investors with FGI status to obtain an exemption from being treated as an FGI (and therefore relief from being subject to the AU$0 threshold for all contemplated transactions). Historically, exemption certificates are typically granted for a limited period of time and for a particular purpose. FIRB guidance states that

applications for exemption certificates, as with other FIRB approval applications, will be assessed on a case-by-case basis. Post-approval compliance requirements An FIRB application may be approved with conditions or without conditions. According to FIRB’s most recent quarterly report, 83 applications were approved with conditions, while 223 were approved without conditions. The Treasurer may impose reporting requirements, tax-related conditions or broad-based conditions specific to national security investments. On May 28, 2025, an updated guidance note was provided which reflects the Australian government’s increased scrutiny of tax arrangements. Investors currently need to report certain interests in Australian land, entities, businesses, and assets through the Register and other registers of Australian water interests, agricultural land, and residential land, as applicable. The FIRB Reforms propose to streamline these reporting obligations: by requiring investors to report via the FIRB Portal instead of separately through the Register (avoiding the need to re-enter application information). Existing reporting requirements for acquisitions of water interests, agricultural land, and residential land would continue to be made to the Register. Investors will continue to require a specific MyGovID account to make reports. The time period to report for most registers remains 30 days after the applicable interest has been acquired. Notably, if an investor becomes a foreign person (and therefore becomes subject to the FDI regime) while holding relevant Australian interests or carrying on a national security business, reporting under the Register will need to be made, regardless of when the interests were acquired, or the business started. Failure to make a timely report on the Register can incur a significant penalty which is accrued daily: currently AU$82,500. The penalty is indexed annually on July 1.

Australia

Recent Filings Data In recent years, FIRB has rejected only a few proposed acquisitions; in practice, applicants will withdraw their applications rather than wait to receive a rejection. Based on data available from the 2024-25 review period, FIRB approved 1,362 commercial applications (919 of which were approved without conditions). 131 applications were withdrawn, while zero were subject to formal prohibition or disposition orders. The United States has remained the largest source country for inbound FDI, lodging the largest value of FIRB applications in 2024-25, at AU$122.3 billion. The value of applications approved for American investors far outstripped that of any other nation – the second largest investor was Japan with AU$15 billion in approved FIRB applications in 2024-25. Canada has also nearly doubled its investments in the last year, as the third largest investor with AU$12.5 billion in 2024-25. The UK has similarly doubled its investments, from AU$2.9 billion in 2023-24 to AU$5.9 billion in 2024-25.

Recent Enforcement Trends

Given the potential civil and criminal penalties (up to 10 years imprisonment or a financial penalty of AU$4.95 million for an individual or AU$49.5 million for a corporation, or both) that may apply for failure to seek approval for an action that requires FIRB approval, taking certain actions that approval was not received for, or breaching conditions imposed on an approval, it is important that parties consider whether FIRB review should be pursued in connection with a potential transaction. Parties must also be aware that if the FIRB imposes mitigation conditions with respect to the potential transaction, a failure to comply with or an attempt to contravene such conditions can also result in the imposition of civil or criminal penalties.

Outlook for 2026 Australia remains open for business, though geopolitical shifts continue to affect investors from key source countries such as the United States and Japan. The re-election of the Albanese Labor government in May 2025 provided policy continuity, and the government has announced a substantial package of FIRB Reforms as part of the 2026-2027 Budget — the most significant update to the foreign investment framework since January 2021. Key proposed reforms include a 30-day decision target for low-risk transactions, expanded exemption certificate powers (including the ability to adjust FGI status), new exemptions from mandatory notification, expanded requirements for sensitive sectors, and strengthened enforcement powers by the Treasurer. The legislative details remain subject to further Treasury consultation and an exposure draft process beginning in late 2026 or thereafter. In the meantime, the existing framework continues to apply in full. Parties should consider FIRB implications at the earliest stage of any Australian investment, particularly where national security considerations or FGI status may be engaged.

FDI and National Security Review

Belgium

Key Considerations ^ Belgium’s second annual report on Screening of Foreign Direct Investment revealed how the new foreign direct investment screening mechanism is functioning with a focus on economic openness and strategic vigilance. ^ The acquisition of either 10% or 25% of the voting rights by non-EU investors in certain sectors crucial to Belgium’s public order, national security and strategic interests is subject to ex ante screening by the Interfederal Screening Commission (ISC). ^ Investments meeting the Belgian screening mechanism thresholds must account for the ISC review in deal documentation, although the actual timing and efficiency of the screening mechanism by the ISC remains vaguely defined.

FDI Regime Overview On February 14, 2023, the Belgian government promulgated a single screening mechanism for foreign direct investments (the FDI Regime), which entered into force on July 1, 2023, as per the Cooperation Agreement of November 30, 2022 (Cooperation Agreement). On April 4, 2024, the ISC published updated FAQ-style draft guidelines to further clarify the Regime’s scope and procedure (the Guidelines). No additional guidelines have been issued since then. Investments made after July 1, 2023, must be notified to the ISC under the FDI Regime before completion if the following conditions are met. First, the investment must be made by a non- EU investor in a Belgian entity. An investor is from outside the EU if it is an individual with its primary residence outside the EU. Alternatively, in the case of a legal entity: (i) the entity has its registered seat or main activities outside the EU, or (ii) one of its ultimate beneficial owners has his primary residence outside the EU. Legal entities include states, state agencies, public and private companies, associations and foundations. Second, the investment must be a direct investment in a legal entity (a “target company”) that is established or active in Belgium, or an investment in a non-Belgian legal entity that

controls a company that has its registered seat or head office in Belgium. Greenfield investments are not covered by the FDI Regime, while a foreign legal entity with a branch office in Belgium may be considered an entity subject to the FDI Regime. Third, the investment must result in a direct or indirect, active or passive acquisition of: ^ At least 25% of the voting rights in, and/or the acquisition of control over, a target company active in one of the following seven areas: y Critical infrastructure for energy, transport, water, health, communications, media, data processing or storage, aerospace, defense, electoral or financial infrastructure and sensitive facilities, and land and real estate crucial for the use of such infrastructure; y Technologies and raw materials that are essential to safety, including public health safety, defense and public order control, military equipment subject to the “Common Military List” and national control, dual-use items, artificial intelligence, semiconductors, robotics, cybersecurity, aerospace, defense, energy storage, quantum and nuclear technologies and nanotechnologies;

FDI and National Security Review

Notification and Preliminary Review Notifications for qualifying investments need to be submitted to the ISC, composed of nine representatives from the three Belgian governments (federal, regional and community authorities). No filing fee is required for submissions to the ISC. Asset deals and acquisitions of business divisions or units operating in the relevant sectors are also subject to notification if a non-EU investor acquires control. The Guidelines further clarify that, in certain circumstances, branch offices may be considered entities within the meaning of the FDI Regime – meaning that an investment in a foreign legal entity with a branch office in Belgium may also trigger a notification requirement. If acquisition of voting rights is deferred or conditional, notification of an investment is required as soon as certainty exists that the applicable 10% or 25% threshold will be exceeded. The ISC employs a “look-through” approach to determine voting percentages, meaning it will dilute an investor’s stake in an organization over the entire chain of command down to the Belgian entity unless the investor holds control over the Belgian entity or its parent. Notification to the ISC is generally required upon signing an investment agreement, although the FDI Regime does not impose strict deadlines for submission. The ISC will first proceed with a preliminary review to assess whether the notification is complete and may also request – or in certain circumstances will be obliged to request – advice from different parts of government. The ISC may begin an ex officio procedure even in instances where an investment is not subject to a mandatory application, if that investment concerns matters of national security, public order or strategic interest. Assessment Phase Once the ISC informs the parties that the notification is considered complete, the ISC’s Secretariat officially confirms this to the foreign investor and the assessment phase starts.

y Supply of critical inputs such as energy, raw materials and food; y Access to sensitive information (e.g., relating to Belgium’s defense and strategic assets, personal data or the possibility to control such data); y Private security (e.g., monitoring and protection of persons and goods); y Freedom and pluralism of the media; or y Technologies that are of strategic importance in the biotech sector and whose turnover exceeds €25 million in the year preceding the investment; or ^ At least 10% of the voting rights in, and/ or the acquisition of control over, a target company active in energy, defense (including dual-use products), cybersecurity and electronic communication, or digital infrastructure sectors and whose turnover was more than €100 million in the year preceding the investment. The Cooperation Agreement foresees that the Belgian governments may, by unanimous agreement, decrease the 25% threshold to 10%, or increase the 10% threshold to 25%. Procedures Investments that fall within the scope of the FDI Regime must be notified to the ISC. All notifications are suspensory, i.e., the parties will not be able to close the transaction before obtaining approval. The FDI Regime is thus both mandatory and suspensory for all investments that fall within the scope of the FDI Regime. Financial considerations such as acquisition price, revenue generated by the target company (excluding biotech sector investments), and market shares are not considered by the ISC in determining whether filing an application is necessary.

Belgium

The ISC has 30 calendar days to coordinate the assessment. In case the ISC deems it necessary to request additional information, the 30-day period will be suspended until all information has been received. Each Belgian government that is geographically concerned by the investment will conduct its own assessment coordinated by the ISC. An investment will be (deemed to be) approved and can be implemented if (i) no threats to the public order, national security or strategic interests are identified, or (ii) no decision is taken by the ISC within the 30-day period. However, if one of the examining governments identifies concrete evidence that such a threat exists, it may request the ISC to proceed with an in-depth screening procedure. Such decision The screening phase, which involves a more concrete risk assessment of the contemplated investment, will take at least 28 calendar days, but is likely to be extended (e.g., in case of an oral hearing, remedies or exceptional circumstances relating to the complexity of the case). Notably, requests for information and remedy negotiations suspend statutory timelines. Following the commencement of the screening procedure, any Belgian government considering whether the investment poses a threat may produce a draft opinion that will be provided to the non-EU investor for comment. cannot be appealed. Screening Phase The competent members of the ISC should each, within a term of 20 calendar days after opening of the screening phase, provide a draft advice to the minister that they represent. If the draft advice of one of the competent members appears to be negative, the other competent members will be informed, and the draft advice will be communicated to the foreign investor and the target company. The latter will have the opportunity both to consult the file kept by the ISC and to submit comments in writing within 10 calendar days after consulting the file.

Within 10 calendar days after receiving such comments, the ISC may organize an oral hearing. If one of the relevant Belgian governments proposes to approve the transaction subject to corrective measures and/or commitments (e.g., modifications to the structure of the proposed transaction, increased governance and compliance requirements, requirements related to the exchange of sensitive information, security clearance of directors, reporting to Belgian authorities, protection of sensitive technologies/ know-how/source codes held by the target company, continuity of supply of sensitive products or services, divestments, etc.), the ISC will enter into negotiations with the non-EU investor with a view to addressing such measures and commitments and their implementation. The negotiations regarding the corrective measures will suspend the 20-day term for one month, with the possibility of further one-month extensions for as long as the negotiations last. Each relevant minister must take a provisional decision whether to reject or approve the investment, possibly subject to commitments, which will lead to one of the following joint decisions by the ISC: ^ A prohibition if one of the competent ministers has issued a negative preliminary decision (supported, at federal level, by a deliberation of the federal council of ministers) and a non-remediable impact has been identified following specific advice from ISC members; or ^ A clearance or conditional clearance (subject to a binding agreement by the investor on the remedies imposed and negotiated by the ISC) in all other cases. Considering the lack of a clear calendar for the screening phase, the various possibilities to extend the timeframes that are identified and the relative lack of practice to date under this new FDI Regime, it is for the moment almost impossible to estimate the duration of an FDI screening.

FDI and National Security Review

Appeal A non-EU investor can seek annulment of a prohibition decision by lodging an appeal with the Market Court (a specific section of the Court of Appeals in Brussels). The appeal does not suspend the contested decision. If the Market Court annuls the decision, the case will be sent back to the ISC. It is unclear whether third parties can also appeal the final decision of the ISC, and if so, whether they can do so before the Market Court. Sanctions In case of non-compliance with the FDI Regime, administrative fines (up to 10% of the proposed investment in most circumstances, and up to 30% in certain circumstances) can be imposed. The ISC also has the power to start an ex-officio investigation if it considers the non-EU investor failed to notify a transaction that falls within the scope of the Cooperation Agreement. The power of the Flemish government to annul or suspend any transaction resulting in a foreign investor acquiring control or decision-making power in government agencies or certain legal entities entrusted with missions of public interest, if such would threaten the strategic interests of the Flemish Region or the Flemish Community (ex post control), continues to apply in parallel with the federal FDI Regime, although such power may prove less relevant in practice. Second-Year Data The second annual report since the FDI Regime’s promulgation was published on September 17, 2025, covering the span of time between July 1, 2024, and June 30, 2025. The report indicated 100 received notifications, including 90 authorized investments, one of which was subject to mitigating measures; 2 withdrawn notifications; and 8 pending cases. No investments had been blocked, and the ISC had only commenced a formal screening procedure in 5% of cases. The top notifying sectors were sensitive information/ personal data (21%), digital infrastructure (14%),

energy (13%), health (12%) and dual use (9%). The nations with the largest percentages of notified transactions were the U.S. (45%), the UK (22%), Japan (8%), Canada (7%) and China (5%). The report noted that revisions of the current FDI Regulation remained underway. Since then, the Council and the European Parliament reached a provisional political agreement to revise the Regulation. On May 19, 2026, the New EU FDI Screening Regulation was adopted by the European Parliament and now awaits formal approval by the Council before entering into force. The new Regulation is expected to introduce a minimum scope of mandatory screening sectors, to harmonize the screening conditions for indirect foreign investments through EU subsidiaries and to enhance the cooperation mechanism between Member States. Notably, the timeline for the initial review will be set at a maximum of 45 days under the new EU framework. It remains to be seen how and when Belgium will implement changes, given that Member States will have 18 months to apply the EU FDI Screening Regulation from its entry into force.

Belgium

Outlook for 2026 The Belgian FDI Regime continues to evolve with an increasing number of cases and no prohibited investments so far. The Belgian regime will continue to develop with the EU’s push to harmonize certain aspects of national regimes by the anticipated New FDI Screening Regulation. Practitioners should monitor the Belgian government’s implementation steps closely, as amendments to the Cooperation Agreement or the ISC’s Guidelines may be adopted before the expected official deadline of 2027. For now, potential buyers considering investments in Belgian target companies active in relevant strategic sectors must evaluate whether the mandatory filing FDI Regime covers the transaction. If so, the parties must suspend closing until the ISC clears the transaction. Transacting parties must therefore consider how the FDI Regime affects transaction timelines, deal completion risk and allocation of risk in the deal documentation. This could ultimately lead to higher costs and possible delays, which will have to be considered in M&A negotiations. Until further revisions or guidance are published as to notification requirements, this concern will remain, further reinforced by uncertainty as to the scope of the notification thresholds and the ultimate duration of the screening process.

FDI and National Security Review

China

Key Considerations ^ China has introduced several national security-driven regulations over the last decade, including a revamped foreign investment regime, a foreign investment screening body and a list mechanism pursuant to which non-Chinese individuals and entities can be restricted or prohibited from investing in China. ^ Under the foreign investment regime, a screening body has broad authority to review both direct and indirect investment activities by non-Chinese investors, including for investments in “important” industries such as energy, infrastructure and critical technology. In April 2026, the screening body issued its first publicly disclosed prohibition, blocking a proposed foreign acquisition of a China-origin artificial intelligence company that had been restructured offshore – a landmark development signaling the regime’s transition from a legislative framework to active, public enforcement. ^ The 2020 Unreliable Entity List (UEL) illustrates China’s ongoing willingness and ability to target specific actors seen to be endangering Chinese sovereignty or development interests, potentially through compliance with non-Chinese law (e.g., economic sanctions). In April 2025, Chinese authorities designated an additional 17 U.S. defense firms to the UEL, though implementation was initially suspended for 90 days beginning May 2025 pursuant to a bilateral trade consensus, and was subsequently adjusted, including selective extended suspensions later in the year or permanent terminations. ^ The Chinese Securities Regulatory Commission (CSRC) further clarified its national security oversight role in respect of overseas fundraising, including public listings, by domestic enterprises in new interim measures. ^ China’s 2025 Catalogue of Encouraged Industries for Foreign Investment (effective February 1, 2026) and updated Market Access Negative List reflect continued liberalization in strategic sectors, even as national security enforcement has become more assertive. ^ Non-Chinese investors should continue to anticipate a complex regulatory landscape for investments in China.

FDI Regime Overview China has introduced several national security- driven regulations over the course of the last decade, including several recent measures with respect to non-Chinese investment. In 2020, a revamped Foreign Investment Law (FiL) was implemented to overhaul China’s foreign investment regime. The FiL anticipated the Measures on National Security Review of Foreign Investments (Review Measures) and established a

new foreign investment screening body in China effective from January 18, 2021, the Office of the Working Mechanism for Foreign Investment Security Review (“FISR”) that is led jointly by two of the country’s preeminent regulators: the National Development and Reform Commission and the Ministry of Commerce (MOFCOM). In addition to the Review Measures, MOFCOM also promulgated the Provisions of the Unreliable

FDI and National Security Review

circumstances” allowing a non-Chinese investor to have a significant impact on the business decision-making, personnel, finance and technology of the enterprise. Notably, investments in listed companies impacting national security are also subject to review by the CSRC in conjunction with the FISR. The Review Measures call for the CSRC to develop specific measures with the FISR to review such investments. On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (Overseas Listing Trial Measures), which stipulates that under the record filing system, domestic enterprises offering securities and listing overseas also need to undergo security reviews under certain circumstances and must accept supervision by the CSRC and relevant competent departments of the State Council (e.g., those managing the FISR). Review Measures – Procedures and Outcomes FISR filings undergo a multi-stage review with both defined and undefined review stages: ^ Preliminary Consultation (no set timing) . Parties can consult the FISR on whether an FISR filing is required. The preliminary consultation can help non-Chinese investors decide whether they need to make a filing with FISR. However, no formal or informal opinion is available. ^ Preparation of Required Application Materials (no set timing) . If a filing is deemed required, parties must prepare and submit a declaration form, investment plan, statement on national security impact and any other materials required by the FISR. The FISR will not publicize the existence of a filing, and materials submitted in connection with a filing will be kept confidential.

Entity List (UEL Provisions) on September 19, 2020, under which non-Chinese individuals and entities so designated may be restricted or prohibited from investing in China. While these measures directly focus on foreign investment related to China and its interests, it may be helpful to consider them alongside a fuller complement of recent national security- driven measures encompassing cybersecurity, data privacy and data security, anti-foreign sanctions, antimonopoly, export controls, public listing rules and more. For example, in July 2022, the Cybersecurity Administration of China promulgated clarifying guidance, with measures effective September 1, 2022, with respect to the circumstances triggering a security assessment by authorities of any cross-border transfer of data by certain operators collecting or processing data in the country. We discuss the Review Measures and UEL Provisions in more detail below. Review Measures – Scope of Application The FISR has broad authority to review both direct and indirect investment activities by non-Chinese investors. Filings with the FISR are required for non-Chinese investments: ^ In industries associated with military and national security or in close physical proximity to military and national security facilities; and ^ Where “actual control” is obtained over entities (existing or newly established) in industries designated as “important,” including agricultural products, energy and resources, infrastructure, transportation services, equipment manufacturing, information technology, internet products and services, financial services, “critical” technologies, cultural products and services, and “other important fields.” “Actual control” refers to (i) holding more than 50% of a target company’s equity; (ii) holding less than 50% of a target company’s equity, but with significant voting rights; and (iii) “other

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^ Initial Decision (15 business days) . Within 15 business days, a preliminary decision will be made by the FISR as to whether it is necessary to conduct a national security review of the investment. The security review consists of a general review and a special review. If the FISR decides that no security review is required, the parties may move forward with the investment. If not, the parties proceed to the general review. ^ General Review (30 business days). A general review will be completed by the FISR within 30 business days of the initial decision to conduct a national security review. During a review, the FISR may interview the parties and issue requests for information. The investment will be cleared if it is deemed to not affect national security, otherwise the FISR will notify the parties in writing of a decision to initiate a special review process. ^ Special Review (60 business days, extendable). The special review must be completed within 60 business days and may result in either (i) clearance of the investment, (ii) prohibition of the investment or (iii) conditional approval of the investment. Required conditions will be implemented under the supervision of the FISR and relevant local level authorities. These authorities will also be empowered to conduct onsite inspections to verify compliance. Under special circumstances, this 60 working-day review period may be extended by the FISR. Moreover, the FISR may request additional materials from filing parties, and the time taken to provide those materials will not be factored into the statutory review period timeline. The parties may at any time during the review period modify or cancel the proposed investment. If amended, the review period will be recalculated from the date when the FISR receives the revised investment plan from the filing parties. While this issue is not addressed explicitly in the new measures, it is anticipated that decisions of the FISR will be released only to transaction parties and will not be made public. If an approval is conditional, the parties will need to implement the investment according to that plan and

may need to retract any actions taken prior to approval. The FISR has the power to extend this 60 business-day period for a discretionary length of time. The parties are strictly prohibited from closing the transaction or implementing substantive integration prior to obtaining the official clearance. The Review Measures became effective as of January 18, 2021, and aggregate data regarding FISR filings has not been made public on a systematic basis, though the FISR published its first individual enforcement decision in April 2026.

China has issued a raft of sweeping measures over the course of the last several years that will significantly impact non-Chinese investors and the Chinese market. These have developed against the backdrop of China’s long-term policy goals of moving up the technology ladder through industrial policy and rebalancing its economy through increased domestic consumption and self-reliance.

Unreliable Entity List – Scope of Application MOFCOM has stated that the UEL is not intended to target any specific country or entity. However, compliance with foreign sanctions against Chinese individuals or entities (or partners) or cooperation with foreign governmental investigations may be important factors in being designated to the UEL. A non-Chinese entity may be listed on the UEL where it: ^ Endangers the national sovereignty, national security or development interests of China; or

FDI and National Security Review

whether to place a foreign entity on the UEL, the Working Mechanism evaluates the following statutory factors: ^ The degree of danger to the national sovereignty, security or development interests of China; ^ The degree of damage to the legitimate rights and interests of Chinese enterprises, other organizations or individuals; ^ Whether it is in compliance with internationally accepted commercial and trade rules; and ^ Other factors. Designated entities or individuals may face one or more of the following: ^ Restrictions or prohibitions on engaging in China-related import and export activities; ^ Restriction or prohibition on trading and investing in China; ^ Restricting or prohibiting relevant personnel or transportation vehicles, etc. of the foreign entity from entering China; ^ Restriction or revocation of work permits or residence authorization; ^ Imposition of monetary fines according to the severity of the circumstances; and ^ Other penalties or measures at the discretion of the Working Mechanism. The Working Mechanism will announce entities designated to the UEL, including risk alerts related to doing business with such entities. Announcements may also provide for curing periods during which the designated entity may take corrective action, and the foregoing punitive measures will not be imposed. Designated entities may apply to the Working Mechanism for removal from the UEL. In addition,

^ Suspends normal transactions with or discriminates against Chinese entities in violation of normal market transaction principles and causes serious harm to the legitimate rights and interests of Chinese entities. On February 16, 2023, MOFCOM added Lockheed Martin Corporation and Raytheon Missiles & Defense to the UEL. Later, on May 20, 2024, three additional U.S. companies – Boeing Defense, Space & Security, General Dynamics Land Systems and General Atomics Aeronautical Systems – were also designated. On April 4 and April 9, 2025, a total of 17 U.S. firms were designated to the UEL. However, following high- level U.S.-China economic and trade consultations, the implementation of these 2025 designations has been significantly adjusted. Effective August 12, 2025, the restrictions targeting the six firms from the April 9 announcement were permanently terminated. Meanwhile, the enforcement of measures against the 11 firms from the April 4 announcement was systematically deferred, resulting in a one-year suspension that took effect on November 10, 2025. For any entity currently subject to active enforcement – mandated sanctions include steep fines, total prohibitions on China-related import and export activities and bans on making new investments in China. In addition, senior management personnel of these entities are prohibited from entering China and any work permits or visas have been canceled or will be denied. Unreliable Entity List – Review Procedures and Penalties The UEL is overseen by an inter-agency Working Mechanism body with its administrative office established within MOFCOM. This Working Mechanism is authorized to investigate and designate any foreign entity that violates normal market transaction principles by terminating normal transactions or applying discriminatory measures against Chinese enterprises for non-commercial purposes. When determining

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