Third annual report on Belgian foreign direct investment screening: double notifications and the first prohibition

On 31 August 2026, the Belgian authorities published the third annual report on Belgian foreign direct investment (“FDI”) screening for the period 2025–2026. It followed the announcement by NHV Group that its proposed acquisition by GD Helicopter Finance, ultimately controlled by China-based GDAT Group, had been prohibited by the Interfederal Screening Committee in charge of the FDI screening in Belgium.

The Belgian Foreign Direct Investment (“FDI”) control mechanism, which entered into force on 1 July 2023, provides for a mechanism of mandatory ex ante notification to the Interfederal Screening Committee (“ISC”) for investment projects envisaged by non-European investors in a Belgian company operating either in a highly sensitive sector or in a sector likely to affect security or public order. 

The screening mechanism has an impact on the acquisition process for foreign investors in Belgium. As with the obligation to notify projects of concentrations to the Belgian Competition Authority or the European Commission, this formal procedure cannot be ignored, given the power conferred on the ISC and the sanctions that may be imposed in the event of non-compliance with the notification procedure. 

On 31 August 2026, the Belgian authorities published the third annual report on Belgian FDI screening.

In the third year of its implementation covering July 2025 to June 2026, the ISC received 191 notifications, which represents an increase of around 90% compared with the second year of implementation. During this period, 4% of the notified cases were subject to in-depth screening procedures.

Furthermore, at the beginning of August 2026, NHV Group announced that its proposed acquisition by GD Helicopter Finance, ultimately controlled by China-based GDAT Group, had been prohibited by the members of the ISC. A couple of projects of acquisition had previously been abandoned due to the opening of phase 2 and their intense scrutiny by the ISC, but this is the first prohibition case under Belgian FDI.

This article will present the main features of the Belgian FDI control mechanism and the lessons to be drawn since its entry into force three years ago. 

The ISC 

Due to the overlap between federal competence (i.e. maintenance of public order and national security) and the competence of the federated entities (energy, media, healthcare, etc.), setting up FDI screening required a cooperation agreement between the federal government and the governments of all Regions and Communities. 

Furthermore, to avoid fragmenting control, which could deter investors, the ISC carries out screening, acting as a one-stop shop comprising representatives from the different Belgian governments depending on the sectors targeted by the investment and the localisation of the target company.

The ISC was set up rapidly and became effective in a short period of time. However, the ISC’s fragmented composition makes the Belgian FDI process quite unique and uncertain in phase 2.

Scope of application

The scheme imposes a prior notification obligation on an investor:

• from a non-EU country (including Iceland, Switzerland, Norway and Liechtenstein);
• making a direct or indirect investment above certain thresholds (representing 10% or 25% depending on the activity of the shares of an enterprise);
• in a Belgian company; and
• which operates either in a highly sensitive sector or in a sector likely to affect security or public order. 

In the period 2025–2026, as previously, the non-EU countries most affected by notifications have been, in order of importance, the US (representing 48% of the notified transactions), the UK, Japan, Canada and China, representing together nearly 80% of notifications. 

Belgian FDI screening also applies to internal restructuring. In fact, around 7.5% of notifications under FDI screening concern internal restructurings. This percentage has decreased in comparison with previous years where internal restructurings represented 20% of the notifications.

Belgian FDI screening covers two categories of investment:

1. Investments aimed at acquiring directly or indirectly 25% or more of the voting rights in a Belgian entity (irrespective of the size or turnover of the target company) active in the following sectors: 

• critical infrastructure relating to energy, transport, water, health, electronic communications and digital infrastructure, media, data processing, aerospace, defence, electoral infrastructure, financial infrastructure, etc.; 
• technologies or raw materials that are essential for public security, defence, public order, dual-use products and technologies of strategic importance (e.g. artificial intelligence, robotics, semiconductors and nuclear technology);
• the supply of essential inputs such as energy or raw materials and food security;
• access to or control of sensitive information, including personal data;
• the private security sector;
• freedom and pluralism of the media; and
• technologies of strategic interest in the biotechnology sector, although transactions in the biotechnology sector only fall within the scope of the screening mechanism if the turnover of the target in the financial year preceding the acquisition of 25% or more of the voting rights exceeds EUR 25 million. 

2. Investments aimed at acquiring directly or indirectly 10% or more of the voting rights in a Belgian entity with an annual turnover of at least EUR 100 million during the financial year preceding the acquisition of the voting rights and which is active in the following fields: 

• defence (including dual-use goods);
• energy; 
• cybersecurity; 
• electronic communications; and 
• digital infrastructure.

Some sectors may be broad and difficult to interpret in practice. There is no possibility of an informal ruling to ensure that the investment falls outside the scope. If in doubt, notifying the transaction is therefore recommended to avoid any risk of fines, especially as the ISC is now much more proactive about non-notified investments. 

In practice, the five most important sectors targeted by notifications during the last year have been personal data, energy, digital infrastructure, health and dual use, which is similar to the most concerned sectors during the period 2024–2025.

Procedure before the ISC

If an investment requires notification, it cannot be made without the final approval of the ISC.

In the period 2025–2026, the ISC submitted requests for information concerning 27 investments that had not been notified to assess compliance with the notification obligation. This announcement shows a much more proactive approach by the ISC and potential application of sanctions in the near future. 

The procedures provided for by the cooperation agreement are as follows: 

1. Preliminary procedure
   
   After the foreign investor has submitted the notification file, the ISC secretariat will ensure that the file is complete and may, if necessary, request additional information. In practice, the ISC secretariat acts promptly and a file may be completed within days of the notification. 
   
   Once the secretariat has all the necessary documents to conduct the assessment, it will forward the file to the competent members of the ISC. 
    
2. Assessment procedure
   
   During the assessment procedure, the ISC will examine whether the notified transaction could have an impact on national security, public order or the strategic interests of the federal state, Regions and Communities. 
   
   At the end of this procedure, within 30 days of the complete notification, the ISC may either authorise the transaction or, where the transaction raises concerns, require the opening of the screening procedure to carry out a more detailed examination of the transaction. If no decision is taken within this period, the operation may be implemented.
   
   For the period 2025–2026, 96% of the notified investments were cleared at the end of the assessment procedure. Indeed, the average duration of a procedure is 32 days according to the ISC’s third annual report.
    
3. Screening procedure
   
   Any competent member of the ISC may request a screening procedure if a more in-depth risk analysis is necessary. In fact, only 4% of the notified transactions require such an in-depth procedure. 
   
   The legal duration of the screening procedure is 28 days. The procedure can be extended if there is a submission of written observations by the parties, a request for information, a hearing, a proposal for remedies, etc. Note that the target company may be involved in the screening procedure. In practice, such procedures may take around four months in straightforward cases. The duration of the screening procedure will depend on the intervention of the Intelligence and Security Coordination Committee or the European Commission and other Member States in the cooperation mechanisms, questions submitted by members of the ISC and the timing of the answers.
   
   At the end of the procedure, the ISC members may approve, with or without remedies, or block, the transaction. The Belgian authorities will only impose remedies relating to governance, operations and commercial activities and will only block an investment project in exceptional circumstances since they do not want to deter foreign investments. 
   
   If no decision is taken within the legal time limit, the transaction may proceed.
   
   For the period 2025–2026, the ISC members authorised two investments upon remedies and for the first time prohibited an acquisition project.
   
   Indeed, in August 2026, NHV Group announced that its proposed acquisition by GD Helicopter Finance, based in Dublin and ultimately controlled by China-based GDAT Group, had been blocked under the Belgian FDI screening procedure. The target, based in Ostend and controlled by Ardian, a French private equity fund, operates its own helicopter fleet and operates flights for the offshore energy sector. It also provides maintenance services for both civil and military customers. The decision has not been made public and the exact motivation of the ISC therefore remains confidential.  
   
   A foreign investor may appeal to the Market Court in Brussels against a negative decision of the ISC.

Assessment criteria: public order, national security and strategic interests

During the screening procedure, the ISC will examine whether the foreign investment will: 

• undermine the continuity of the vital processes of the above-mentioned sectors and whether failure or disruption could lead to serious societal disturbances and constitute a threat to national security, strategic interests and the quality of life of the Belgian population; 
• undermine the integrity or exclusivity of the knowledge and information associated with these vital processes and the highly sensitive technology required for this purpose; or
• create or foster strategic dependencies.

Sanctions

A foreign investor that fails to comply with the notification procedure will face administrative fines of up to 10% or 30% of the amount of the investment (depending on the nature of the violation).

Conclusion

The EU considers foreign investment to be essential for economic growth, competitiveness, employment and innovation. There are, however, concerns about FDI, the most important of which is the takeover of strategic companies or national champions by foreign investors. 

Regulation (EU) 2019/452 of 19 March 2019 was recently revised and will be replaced by Regulation (EU) 2026/1386, which will come into force on 17 January 2028. This new regulation places obligations on Member States to introduce national screening laws with mandatory filing requirements, sets up mandatory minimum sectoral scope and provides for harmonised sector-specific risk factors, harmonised investor-specific risk factors and harmonised sample mitigating measures. It also introduces mandatory minimum procedural alignments and the EU cooperation mechanism. 

In parallel with the EU reform, the Belgian authorities have recently launched a public consultation on the implications of the Belgian FDI regime to coordinate the revision of the national framework in light of the new EU constraints and national characteristics.

The Belgian FDI control mechanism has been implemented as a common project among Member States to protect the EU’s strategic interests and highly sensitive sectors. 

FDI screening has influenced mergers in Belgium as this new constraint must be taken into consideration before closing transactions. The significant increase in notifications shows that companies are now well aware of such an obligation. The ISC has also adopted a much more proactive approach in the detection of unnotified investments. 

Although the general scope of control remains vague, in some cases due to the broadness of the sectors concerned and the lack of transparency of ISC decisions or detailed guidelines, the overall process has been relatively smooth in phase 1 thanks to the ISC’s prompt actions and pragmatic approach. Phase 2 remains long and uncertain due to the ISC’s fragmented composition and the secrecy of the procedure. 

Since the scope of the cooperation agreement is broadly defined and the ISC has not yet adopted guidelines on the scope of its powers, a large number of foreign investments may be subject to the ISC’s notification obligation. Practitioners still face uncertainty in terms of in-scope versus out-of-scope transactions and effective timelines for more sensitive investments. Hopefully, the revision of the Belgian framework will provide for practical solutions to those pending issues.

The CMS Expert Guide to Foreign Investment Screening Laws, written by our team of experts across Europe, is your guide to FDI screening in key jurisdictions. It provides a comprehensive overview of the relevant national legislation, the scope of each national regime, the targeted sectors, the highlights of the applicable procedure, the authorisation criteria and the potential risks of non-compliance. 

The guide is available at the following link:

CMS Expert Guide to Foreign Investment Screening Laws

Contact details for each of our contributors can be found at the end of their national chapters. Do not hesitate to contact us if you have any questions.