Key Considerations ^ While there is no centralized FDI screening at the European Union (EU) level, the European Commission (the Commission) continues to push for a more harmonized approach to FDI screening among EU Member States. ^ Investors face a patchwork of EU Member State FDI regimes; essentially all Member States now have FDI screening regimes or are in the process of introducing them. At present, these regimes are not aligned, but the Commission is focused on driving coordination and convergence. ^ Statistics for 2024, the most recent year for which data has been published, show a continued trend towards screening more cases formally, with the number of formally screened cases having nearly quadrupled since 2020. Member States continue to intervene in a small proportion of cases: approximately 9% of screened cases were approved subject to conditions or mitigating measures, and just 1% were blocked outright. ^ In December 2025, the Council and the European Parliament reached a political agreement on a new EU FDI Screening Regulation (the New Regulation). The agreed compromise text was published in February 2026. On May 19, 2026, the European Parliament approved the New Regulation that now awaits formal approval of the Council before entering into force. The New Regulation requires Member States to operate national FDI screening regimes, harmonizes FDI rules across the EU and introduces mandatory screening in key sectors, while preserving ultimate decision-making authority at the Member State level. ^ The New Regulation is expected to be formally published in the EU’s Official Journal in the near future and to be applicable by the end of 2027. ^ Separately, the Commission adopted a legislative proposal for an Industrial Accelerator Act (IAA) on March 4, 2026, which would introduce an additional FDI-related review mechanism applicable to foreign investments in certain strategic manufacturing sectors, including battery value chains, electric vehicles, photovoltaic technologies, and critical raw materials. The IAA is currently subject to negotiations in the EU legislative process and may be subject to significant amendments. ^ The Commission has advanced its outbound investment agenda: following a public consultation and the issuance of a Recommendation in January 2025 identifying semiconductors, artificial intelligence and quantum technologies as priority sectors for data collection, Member States submitted interim progress reports in July 2025. Member States are now expected to submit comprehensive reports on their implementation of the Recommendation by June 30, 2026, which will inform any further policy response.
European Union
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