Sarah Beeston, Maurits Terlouw and Pim Jansen (Van Doorne) authored this publication

Introduction

The investment screening regime consists of a general investment screening act and sector-specific regulations governing foreign direct investments ("FDI"). Where applicable, the sector-specific frameworks supersede the provisions of the general regime, with the general regime serving as a safety net. Whether a notification is required depends on the activities of the target or merging entities, irrespective of the nationality of the investor. The regime therefore also covers purely national transactions.

Summary of major changes in 2025

• The Bureau for Investment Screening ("BTI")'s most recent annual report (2024) shows a significant increase in notified and reviewed transactions under both the general Security Screening of Investments, Mergers and Acquisitions Act ("Vifo Act") and the sector-specific regimes, with more in-depth reviews, the first prohibitions and an increased focus on geopolitical risks and strategic dependencies in investment screening.
• The BTI has published guidance and updated FAQs that further clarify the applicability of the Vifo Act in practice. This includes clarification on when an undertaking qualifies as being "active in" sensitive technology, disclosure requirements for private equity fund structures, the notification obligations of curators in bankruptcy proceedings and procedural aspects such as digital filing and language requirements.
• While expansion of the scope of the Vifo Act to cover additional sectors and a dedicated framework for the defense and security sector were expected in 2025, these measures have not yet entered into force.
• Another major development in 2025 concerned the Dutch government invoking the Goods Availability Act, Wet beschikbaarheid goederen, against chip manufacturer Nexperia, which was acquired by a Chinese investor in 2019. The Act enables the Dutch government to guarantee the availability of essential goods in the event of an emergency. It allows intervention in business processes, for example by stipulating that a company may not make any changes to the production of crucial goods without a license. The Act had not been applied since its introduction in 1952, making this invocation exceptional.

Who files?

It is common practice for the investor to bear the primary responsibility for any applicable filings.

The sector-specific Energy Act, Energiewet, requires notification by one of the parties involved in the transaction. The Telecommunications Act, Telecommunicatiewet, places the notification obligation solely on the acquiring party.

Under the Vifo Act, both the investor and the target are responsible for filing. However, the investor is exempt from liability for failure to notify if it could not reasonably have known that a filing was required. This applies specifically where the target is bound by a confidentiality obligation and cannot provide the relevant information. In such cases, the target bears the responsibility for filing.

Types of deals reviewed

Vifo Act

The Vifo Act applies to investments in companies in the Netherlands that (i) are involved in vital processes, (ii) are active in the field of sensitive technology or (iii) operate a business campus.

Parties involved in vital processes include, among others, Schiphol Airport, the Port of Rotterdam, operators of heating networks, nuclear or renewable energy providers and certain providers in the field of banking and financial market infrastructure.

Sensitive technologies include dual-use products and military goods that are subject to European export control. Certain technologies are classified as highly sensitive. These include specific dual-use products and military goods, as well as semiconductor technology, quantum technology, photonic technology and high-assurance products.

A business campus is defined as an area hosting public-private partnerships and at least one company active in sensitive technologies. Whether a company qualifies as an operator is determined based on its influence on the safety of the business campus, such as the power to decide on access to facilities and knowledge.

Any transaction leading to a change of control in such undertakings must be notified to the BTI under the Vifo Act. The concept of change of control is the same as under the European Union Merger Regulation ("EU Merger Regulation").

For investments in companies active in highly sensitive technologies, a lower threshold applies. Acquiring or increasing significant influence occurs where a party obtains the right to cast at least 10 percent, 20 percent or 25 percent of the votes in the target's shareholder meeting, or obtains the power to appoint or dismiss one or more board members of the target.

The Vifo Act only applies if no sector-specific regulation is applicable.

Energy Act

Under the Energy Act, notification is required for transactions involving power production facilities with a nominal capacity exceeding 100 MW, and LNG installations and LNG companies.

Telecommunications Act

Under the Telecommunications Act, notification is required if an acquisition results in "predominant control" leading to "relevant influence in the telecommunications sector."

Predominant control covers holding at least 30 percent of the voting rights, the right to appoint or dismiss a majority of the board or supervisory board, certain statutory rights regarding control, or ownership of a telecoms branch office, acting as a guarantor or owning a sole proprietorship.

Relevant influence in the telecommunications sector exists when abuse or deliberate failure of a telecommunications party could lead to issues with the availability, reliability or confidentiality of internet and telephone networks and services. This includes products and services related to national security, defense and upholding the rule of law.

Scope of the review

Following a notification, the BTI assesses whether the investment, merger or acquisition poses a risk to national security or the security of supply, in other words, resilience.

National security refers to security interests that are essential to the democratic legal order, security or other important interests of the Dutch state or social stability interests.

The Vifo Act explicitly notes the interests of safeguarding the continuity of critical processes, maintaining the integrity and exclusivity of knowledge and information of critical or strategic importance to the Netherlands, and preventing unwanted strategic dependence of the Netherlands on other countries.

Key factors in the assessment include transparency of the identity and ownership structure of the investor, the investor's criminal record and possible restrictions under national or international law, the security situation in the investor's country or region of residence, ties to governments having geopolitical agendas other than the Netherlands and its allies, the investor's financial stability and past compliance, and cooperation in the review procedure and any incorrectly submitted information.

Review process timeline

Vifo Act

The review procedure under the Vifo Act consists of two phases.

Phase I can take up to eight weeks, with a possible extension of up to six months. The BTI ends Phase I with an announcement of whether further review is required.

Phase II can take up to eight weeks, with a possible extension of up to six months. However, any extension time used by the BTI in Phase I will be deducted from this six-month maximum. The total extension time across both phases is therefore capped at six months.

If the BTI fails to make an announcement within the Phase I deadline, including extension, clearance is deemed granted.

A "stop-the-clock principle" applies during the review procedure, meaning the review period is suspended if the BTI requests additional information. The decision period can also be extended by an additional three months if the European Union Foreign Direct Investment Screening Mechanism ("EU FDI mechanism") is triggered.

A standstill obligation applies, meaning that the parties cannot complete the transaction before the BTI has granted clearance. The BTI can grant an exemption from the standstill obligation for reasons of general interest.

Energy Act

Under the Energy Act, the notification must be made at the latest four months prior to the expected change of control. According to the explanatory memoranda to both acts, if the BTI fails to respond within four months, clearance is deemed granted.

No standstill obligation applies, meaning that closing can take place while the BTI is still reviewing the transaction.

Telecommunications Act

Under the Telecommunications Act, acquisitions should be notified at least eight weeks before the intended implementation date. In the case of a public bid, notification is required at the latest simultaneously with the announcement of such public bid.

The review period consists of two phases. Phase I can take up to eight weeks. At the end of this period, the BTI can approve, prohibit or refer the transaction for an in-depth investigation.

Phase II can take up to six months.

The review period is suspended if the BTI requests additional information. It is also suspended in the case of an intended prohibition to allow the telecommunications party to submit its opinion.

No standstill obligation applies, meaning that closing can take place while the BTI is still reviewing the transaction.

How foreign investors can protect themselves

Investors should make timely notifications to the BTI if required under the Vifo Act or sector-specific regulations.

Vifo Act: Investors should bear in mind that both a filing obligation and a standstill obligation apply. Investors must wait for BTI clearance before completing the transaction. Failure to notify, premature implementation (gun jumping) or providing wrongful or misleading information may result in fines of up to €1,100,000 or 10 percent of worldwide turnover.

Energy Act: Failure to notify in time can result in fines of up to €1,100,000 or 10 percent of worldwide turnover and possible annulment of the transaction in court.

Telecommunications Act: Failure to notify in time can result in fines of up to €900,000.

Although the sector-specific regulations do not contain a standstill obligation, completing a transaction before clearance entails risks. If the BTI prohibits the transaction or imposes conditions on completion, the investment may have to be partially or fully reversed.

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