Introduction

In Belgium, the screening of foreign direct investments is carried out by the federal and regional governments (depending on the sector and location of the target company), under the coordination of the Interfederal Screening Commission ("ISC").

Summary of major changes in 2025

• On September 12, 2025, the second annual report covering the second year of the Belgian screening mechanism was published. Between July 1, 2024, and June 30, 2025, 100 notifications were received (of which two were ultimately withdrawn). This represents an increase of 44 percent compared to the previous reporting period. As of the date of the report, 89 investments were authorized (without corrective measures), eight cases were still pending, and one transaction was authorized subject to corrective measures. The ISC opened a formal screening procedure in only five percent of cases. As was the case in the previous reporting period, no investment has been blocked to date.
• As noted, the ISC imposed corrective measures for the first time in 2025. The corrective measures included (1) placing source code or know-how into the custody of a third party in Belgium; (2) guarantees for the continuity of certain processes; and (3) the appointment of one or more compliance officers. According to the Q&A published in the Flemish Parliament, corrective measures were imposed in two other transactions after the date of the report, but no further details were disclosed.
• The five most significant sectors were data (21 percent of notifications), digital infrastructure (14 percent), energy (13 percent), health (12 percent), and dual use (9 percent). A majority (45 percent) of notified transactions concerned ultimate beneficial owners established in the United States, whereas ultimate beneficial owners established in the United Kingdom (22 percent), Japan (8 percent), Canada (7 percent) and China (5 percent) made up the remainder of the notifications.
• On April 4, 2024, the ISC issued guidelines on the scope of the screening mechanism and the procedure to be followed. Although it is expected that those guidelines will be updated in the future as the ISC gradually reviews more cases, no new guidelines were issued in 2025.

Who files?

The foreign investor must notify the investment that falls within the scope of the secretariat of the ISC. For the purposes of the screening mechanism, the following persons are considered foreign investors: natural persons with their primary residence outside the EU; undertakings (including states, public and private companies, associations, foundations, and similar entities) with their registered office or main activities outside the EU; or undertakings that have at least one ultimate beneficial owner ("UBO") with a primary residence outside the EU.

In light of the above, investors based in the UK or EFTA states will fall under the definition of foreign investors. The same applies to Belgian undertakings that have a UBO residing outside the EU.

Investments by Belgian undertakings with all UBOs in Belgium could still be subject to notification if the Belgian undertaking has one or more non-EU undertakings in its chain of control; in that case, the non-EU undertaking would be considered the foreign investor indirectly making the investment.

The notification must, in principle, be made after signing of the transaction. Special rules apply to an acquisition through a public takeover offer. The notification requirement is both mandatory and suspensive, which means the transaction cannot be closed until clearance has been obtained. Failure to comply with this obligation may give rise to an administrative fine imposed on the foreign investor, ranging from 10 to 30 percent of the value of the investment in question, depending on the circumstances.

Types of deals reviewed

The screening mechanism covers all types of investments, including share acquisitions, subscriptions to capital increases and public takeover offers, to the extent that they result in a direct or indirect, active or passive acquisition of a certain percentage of voting rights in a Belgian business operating in one of the sensitive sectors covered by the Cooperation Agreement. Between July 1, 2024, and June 30, 2025, a Belgian undertaking was the direct target in 22 percent of the notified transactions, while 78 percent of the notifications related to an indirect or passive acquisition of a stake in a Belgian undertaking.

Greenfield investments are excluded from the scope of the screening mechanism. Asset deals, however, may fall within the scope of the screening mechanism if they result in a change of control as defined in the Cooperation Agreement. Similarly, the latest version of the guidelines clarifies that the sale of a "division" of a company must be notified if the activities carried out by the division fall within the scope of the regime.

There is no exception for intra-group restructurings, which means the notification requirement may be triggered by share and asset transfers between entities of the same group without a change in ultimate control. Between July 1, 2024, and June 30, 2025, 12 percent of the notifications to the ISC related to intra-group restructurings.

Scope of the review

The screening mechanism covers investments resulting in a direct or indirect acquisition of 10 or 25 percent or more of the voting rights in a Belgian business active in one of a number of areas.

The 10 percent threshold applies to investments in business whose activities relate to energy, defense (including dual-use products), cybersecurity and electronic communications or digital infrastructure sectors, provided that the target has realized a turnover of more than €100 million in the financial year preceding the investment.

The 25 percent threshold applies to investments in businesses whose activities relate to:

• Critical infrastructure (both physical and virtual) for energy, transport, water, health, communications, media, data processing or storage, aerospace, defense, electoral or financial infrastructure and sensitive facilities, as well as the land and real estate crucial for the use of such infrastructure.
• Technologies and raw materials that are of essential importance to safety, including public health safety, defense and public order control, military equipment subject to the "Common Military List" and national control, dual-use items, AI, semiconductors, robotics, cybersecurity, aerospace, defense, energy storage, quantum and nuclear technologies, and nanotechnologies.
• The supply of critical inputs, including energy, raw materials and food security; access to sensitive information (for example, relating to Belgium's defense and strategic interests), as well as personal data or the ability to control such data; private security (such as monitoring and protection of persons and goods); and freedom and pluralism of the media (including news outlets, broadcasting services and newspapers).
• Technologies of strategic importance in the biotech sector, provided that the target has realized a turnover of more than €25 million during the financial year preceding the investment.

To date, little additional guidance has been provided regarding the interpretation of the relevant sectors and activities.

Review process timeline

The screening process, which will commence only once the notification file is deemed complete by the ISC secretariat, is carried out in two main phases.

During the initial assessment phase, the federal and regional governments (each to the extent concerned by the investment) assess whether the investment could potentially result in threats to public order, national security or strategic interests of Belgium or the relevant region. In principle, the decision must be taken within 30 calendar days following receipt of the complete notification. However, this period may be suspended and thus extended if additional information is requested.

If one of the relevant governments considers that the investment presents a potential risk, a formal screening procedure is carried out. During this second phase, the relevant governments conduct a more detailed risk analysis of the investment over a period of 28 days, subject to possible suspensions and extensions.

Each government that believes a risk exists draws up a draft report, which is provided to the foreign investor for comments and may be the subject of an oral hearing. Following the end of the review period, each government has six calendar days to adopt a decision.

The investment is considered approved unless the federal government (acting alone) or all relevant regional governments (acting together) decide to reject the transaction.

Clearance may be subject to corrective measures. These could include the establishment of a code of conduct for the exchange of sensitive information; the appointment of compliance officers responsible for handling sensitive information; or the installation of a liaison officer or security council within the undertaking to regulate access to sensitive information, oversee its transmission and report infringements to the competent authorities.

Other measures may include requiring that certain technology, source code or know-how be placed into the custody of a third party in Belgium and made available only in the event of acute risks to vital processes or security interests; imposing an obligation to notify authorities of certain transactions; ring-fencing vital processes in Belgium or providing services to Belgian authorities through a separate subsidiary; limiting the investment percentage or certifying all shares; or requiring guarantees for the continuity of certain processes or the delivery of services and goods for a specified period, with prior notification and consultation if the company decides to cease certain activities.

In case of a negative decision, the foreign investor may lodge an appeal with the Brussels Court of Appeal. The court may decide to annul the decision but may not replace it with a positive decision. In the event of annulment, the ISC will be called upon to take a new decision in accordance with the procedure described above.

How foreign investors can protect themselves

The scope of the screening mechanism is broad, and the sensitive sectors it covers are not precisely described. Over time, as guidelines are updated and precedents are established, investors gain a clearer understanding of which types of investments fall within the scope of the screening mechanism.

In the meantime, the ISC recommends notifying a transaction if there is uncertainty as to whether it falls within the scope of the screening mechanism, to avoid an ex officio investigation, which could result in penalties of up to 30 percent of the transaction value, as well as legal uncertainty if the transaction has already closed.

If a contemplated transaction falls within the scope of the screening mechanism, parties should ensure that this is reflected in the transaction documentation, including conditions precedent, cooperation undertakings and related provisions. Parties should also carefully consider the applicable screening timeline.

Although the process should normally not take more than two to three months, according to the ISC, delays may occur due to requests for additional information or coordination among the authorities involved in the review. This should be taken into account, for example, when agreeing on a long-stop date.

As noted, a transaction falling within scope cannot be closed until clearance has been obtained. Foreign investors are therefore encouraged to prepare the notification file well in advance of signing so that the transaction can be notified immediately after signing. In certain cases, notification may proceed on the basis of a draft agreement, provided that all parties confirm their intention to enter into an agreement that does not materially deviate from the draft.

To avoid delays, and although the ISC may request additional information, it is essential that the initial notification include, at a minimum, all information required by law, including: the ownership structure of the foreign investor and of the target; the approximate value of the investment and how it was determined; the products, services and business operations of the foreign investor, its controlling entities and the target; the EU Member States and third countries in which those entities conduct relevant business activities; the financing of the investment and its source; and the date or expected date of completion of the investment. The initial assessment phase begins only once the ISC secretariat confirms that the file is complete. Against this background, if the transaction documentation includes a filing deadline, it is recommended that it refer to the submission of the notification rather than the acknowledgement of receipt by the secretariat.

Foreign investors concerned that an investment may not be cleared should consider preparing a contingency plan. If a competent government considers that an investment poses a threat to public order, national security or strategic interests, it may approve the transaction subject to corrective measures. As corrective measures become more common, transaction documentation should address the foreign investor's willingness to proceed with the transaction in such circumstances.

Depending on the circumstances, it may also be useful for a foreign investor to carry out a feasibility study of potential corrective measures and begin preparing for their implementation, which may help expedite negotiations with the competent authorities and the clearance process.

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