In its recently published first annual report, the Belgian authority in charge of FDI screening (the Interfederal Screening Committee, or “ISC” for short), provides insight into the way the Belgian screening mechanism has been applied in its first year. The report also provides an outlook for the near future. Even if the report does not discuss specific cases and does not disclose the identities of the parties involved, it gives an interesting insight into the operation and impact of the regime in the past year.
The Belgian FDI regime entered into force on 1 July 2023. The review process consists of a verification procedure (phase I) which may be followed by a screening procedure (phase II) if there are concrete risk indications.
In the first year, the ISC received 68 notifications, fifteen of which were still pending on 30 June 2024. The remaining 53 cases have all been unconditionally cleared. No investments have been blocked or made subject to remedial measures. Screening procedures were only started in five out of the 68 cases (four of which were still pending on 30 June 2024).
Processing time
The verification procedure only starts when the notification is considered complete. Although the report notes that in some cases there has been a significant delay between the initial notification and the opening of the verification procedure (due to missing information), the average duration from the notification to the start of the verification procedure has been six days. The average processing time from notification to the end of the verification procedure amounted to 31 days. In the one case in which the screening procedure was concluded within the first year, the overall processing time (as from notification) took 52 days.
The large majority of cases notified (more than 85%) concerned cases in which control was acquired. In terms of sectors, by far the most important sector concerned the digital world in a broad sense (data, digital infrastructure and electronic communications). Together, these sectors account for more than 35% of the transactions notified. Other important sectors have been the health (15% of the transactions) and transport sectors (10%). As to the nationality of the investors, interestingly by far the largest group came from the US (43.4%), followed by the UK (29%), with Switzerland only coming third at 5.3%. Countries such as India or China accounted for a very limited number of the notifications (respectively 3 and 2).
Outlook
In terms of outlook for the second year, the ISC expects a slight rise in the number of notified investment cases (based on the expected growth figure of the Belgian economy). In terms of the regulatory framework, the ISC identifies potential areas for improvement. However, the primary focus in that area will be on the ongoing negotiations of the European Commission’s proposal for a new FDI Regulation. Changes to the Belgian FDI regime will most likely only be introduced after the adoption of the new EU FDI regime. In the meantime, the ICS is considering optimising the practical operation of the screening mechanism in an effort to make it more user-friendly.
In its recently published first annual report, the Belgian authority in charge of FDI screening (the Interfederal Screening Committee, or “ISC” for short), provides insight into the way the Belgian screening mechanism has been applied in its first year. The report also provides an outlook for the near future. Even if the report does not discuss specific cases and does not disclose the identities of the parties involved, it gives an interesting insight into the operation and impact of the regime in the past year.
The Belgian FDI regime entered into force on 1 July 2023. The review process consists of a verification procedure (phase I) which may be followed by a screening procedure (phase II) if there are concrete risk indications.
In the first year, the ISC received 68 notifications, fifteen of which were still pending on 30 June 2024. The remaining 53 cases have all been unconditionally cleared. No investments have been blocked or made subject to remedial measures. Screening procedures were only started in five out of the 68 cases (four of which were still pending on 30 June 2024).
Processing time
The verification procedure only starts when the notification is considered complete. Although the report notes that in some cases there has been a significant delay between the initial notification and the opening of the verification procedure (due to missing information), the average duration from the notification to the start of the verification procedure has been six days. The average processing time from notification to the end of the verification procedure amounted to 31 days. In the one case in which the screening procedure was concluded within the first year, the overall processing time (as from notification) took 52 days.
The large majority of cases notified (more than 85%) concerned cases in which control was acquired. In terms of sectors, by far the most important sector concerned the digital world in a broad sense (data, digital infrastructure and electronic communications). Together, these sectors account for more than 35% of the transactions notified. Other important sectors have been the health (15% of the transactions) and transport sectors (10%). As to the nationality of the investors, interestingly by far the largest group came from the US (43.4%), followed by the UK (29%), with Switzerland only coming third at 5.3%. Countries such as India or China accounted for a very limited number of the notifications (respectively 3 and 2).
Outlook
In terms of outlook for the second year, the ISC expects a slight rise in the number of notified investment cases (based on the expected growth figure of the Belgian economy). In terms of the regulatory framework, the ISC identifies potential areas for improvement. However, the primary focus in that area will be on the ongoing negotiations of the European Commission’s proposal for a new FDI Regulation. Changes to the Belgian FDI regime will most likely only be introduced after the adoption of the new EU FDI regime. In the meantime, the ICS is considering optimising the practical operation of the screening mechanism in an effort to make it more user-friendly.