UK Proposes Major Overhaul of Foreign Investment Screening
A new bill would create a mandatory notification and review system for foreign investments on national security grounds, similar to CFIUS in the United States.
The UK government has introduced the National Security & Investment Bill, which proposes a fundamental overhaul of the country's approach to screening foreign direct investment (FDI). If passed, the bill will establish a new standalone regulatory regime, moving authority from the Competition and Markets Authority to a new Investment Security Unit within the Department for Business, Energy & Industrial Strategy (BEIS).
This represents a significant shift for investors, creating a framework more closely aligned with the Committee on Foreign Investment in the United States (CFIUS). The legislation introduces a hybrid notification system and a broad definition of "trigger events," which could include acquiring more than 15% of shares or votes, or gaining "material influence" over a company. The rules would also apply to non-UK entities that supply goods or services in the UK. This change will add a critical layer of regulatory risk and timing considerations for a wide range of corporate and M&A transactions involving UK assets, requiring dealmakers to build a new approval process into their transaction planning and timelines.