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On 1 July 2023, the Belgian foreign investment screening regime of general application entered into force. The entry into force of the regime followed the approval by the parliaments of the Belgian federal State and of the various regions and communities of the cooperation agreement adopted by their governments in November 2022. The cooperation agreement sets up a screening mechanism for foreign direct investments in sensitive sectors that are relevant for the country’s national security, public order, and strategic interests. On 4 April 2024, the Belgian Ministry of Economy (SPF Economie/FOD Economie) published revised guidelines on the application of the cooperation agreement1.
Notification Requirements
Mandatory prior notification is required for investments by foreign investors in Belgian entities active in certain sectors of strategic importance, to establish or maintain a direct and lasting relationship between the foreign investor and the company. A “foreign investor” is either a natural person with its main residence outside of the EU, a company from a third country, established under the laws of a non-EU country, whose statutory seat or main activity is located in a non-EU country, or a company whose beneficial owners have their main residence outside of the EU.
A notification is required where a foreign investor directly or indirectly acquires2:
a) critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure;
b) critical technologies and dual use items, including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies;
(c) supply of critical inputs, including energy or raw materials, as well as food security;
(d) access to sensitive information, including personal data, or the ability to control such information;
(e) the private security sector;
(f) the freedom and pluralism of the media; or
(g) technologies of strategic importance in the biotechnology sector, if the company's turnover in the financial year preceding the acquisition was greater than €25 million
Review process
The screening is performed by the Interfederal Screening Committee (ISC), composed of representatives of the various government bodies and with the administrative support of the Federal Public Service Economy.
Notified transactions are first checked for completeness by the ISC Secretariat, after which the notification file is forwarded to the competent ISC members, and to the Intelligence and Security Coordination Committee (CCRS). The review procedure by the ISC consists of two phases: the assessment phase and the screening phase.
The ISC may negotiate corrective measures that would enable it to issue a positive opinion. The negotiations suspend the time limit by one month (or longer if mutually agreed). Upon receipt of the ISC's opinion, the ministers concerned have a period of 6 calendar days to render their preliminary individual decisions on the proposed transaction. The secretariat of the ISC will then notify the combined decision to the notifying party within 2 calendar days after the reception of the preliminary decisions. For complex cases, the procedure may be extended by two months. The competent federal minister has the right to veto the eligibility of investment.
In the absence of a notification, an ex officio investigation may be initiated where the ISC considers it necessary for the protection of public order and national security, and/or strategic interests. Furthermore, an ex officio investigation may be initiated retroactively against an investment finalised before the entry into force of the Cooperation Agreement, up to two years after the acquisition of unnotified control, and up to five years in the case of indications of bad faith.
A negative decision may be subject to an appeal in front of the Market Court (a division of the Brussels Court of Appeals), within 30 days following the notification of the decision.
Penalties
A foreign investor may be sentenced to an administrative fine up to 10% of the investment where no data or incomplete data is provided to the authority and where the time limit for the request for information is not respected.
The failure to notify a reportable transaction (unless a spontaneous notification is made within twelve months of the realisation of the investment), the provision of inaccurate, misleading or deceptive information, the non-compliance with corrective measures, and the realisation of the investment in violation of the standstill obligation may result in an administrative fine of up to 30% of the value of the transaction.
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