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Belgian summer brings foreign direct investment screening regime to Belgium

For many years, Belgium was one of the few EU Member States that did not have a national foreign direct investment (FDI) screening mechanism in place, but this is about to change.

On 30 November 2022, the Federal, Regional and Community governments in Belgium reached consensus on a draft cooperation agreement on FDI screening (the Cooperation Agreement), and this was lodged with the Federal Chamber of Representatives on 9 January 2023 for approval[1].

While the Cooperation Agreement must still be approved (and similar acts must be still adopted by the Regional and Community parliaments), this is an important step towards the adoption of a full-fledged, national FDI screening mechanism[2].

Initially announced to enter into force at the beginning of 2023, it is now anticipated that the Cooperation Agreement will enter into force on 1 July 2023[3], and start to apply to transactions that are signed after this date, in case non-EU investors wish to make investments in a number of strategic areas. These strategic areas are defined in a broad way. 

In-scope transactions must be notified in advance to a newly established Screening Commission, who – after an initial assessment phase – may decide to conduct an actual screening procedure. Roughly speaking, the Cooperation Agreement foresees a lead time of about 1 month for the initial assessment phase, and about 1 month for the actual screening procedure, but multiple extensions are possible.

What the main features of the Cooperation Agreement are, and how can you anticipate and prepare for the new regime, is set out in the attached document. 

[1] DOC 55 3079/001 (Projet de loi portant assentiment de l’accord de coopération du 30 novembre 2022 entre l’État fédéral, la Région flamande, la Région wallonne, la Région de Bruxelles-Capitale, la Communauté flamande, la Communauté française, la Communauté germanophone, la Commission communautaire française et la Commission communautaire commune visant à instaurer un mécanisme de filtrage des investissements directs étrangers/Wetsontwerp houdende instemming met het samenwerkingsakkoord van 30 november 2022 tussen de Federale Staat, het Vlaamse Gewest, het Waals Gewest, het Brussels Hoofdstedelijk Gewest, de Vlaamse Gemeenschap, de Franse Gemeenschap, de Duitstalige Gemeenschap, de Franse Gemeenschapscommissie en de Gemeenschappelijke Gemeenschapscommissie tot het invoeren van een mechanisme voor de screening van buitenlandse directe investeringen). This draft act was adopted in the plenary session of the Chamber on 9 February 2023, and sent to the King for ratification.

[2] To date, no such fully-fledged FDI screening mechanism exists in Belgium. Only a limited post-factum screening mechanism exists at Flemish level, but its scope is limited to foreign (ie non-EU) investments in certain Flemish government entities.

[3] The current draft Cooperation Agreement states that it will enter into force on the date of publication of the last act approving the Cooperation Agreement in the Official Belgian Gazette. No automatic retroactive effect is currently foreseen.