One year after the introduction of Belgium's foreign direct investment (FDI) screening mechanism, the Interfederal Screening Commission (ISC) has published its inaugural annual report. Although the report offers insightful statistics on the notifications handled by the ISC, many questions regarding the regime’s scope remain unanswered.
Key figures
In its first year, the ISC received 68 FDI notifications, averaging six per month. Of these, only five triggered a second-phase screening. At the time of the report’s publication, only one screening process had been fully completed. Additionally, the ISC initiated just one retroactive (“ex officio”) review.
The process appears to be running efficiently. In nearly half of the cases, notifications were deemed complete on the day of submission or the following day. This decision marks the start of a 30-day review period, which the ISC mostly adhered to. The only completed second-phase procedure took 52 days in total.
The report also delves into the nature of the notified transactions, with the majority involving the ‘data’ and healthcare sectors. The prevalence of notifications concerning the ‘data’ sector raises questions about whether the current definition in the Cooperation Agreement - specifically, “access to sensitive data, including personal data or the ability to control such data”- may be leading to an excessive number of notifications.
Another notable finding is that 16.2% of all notifications involved internal restructurings, which are not exempt from the Belgian FDI regime. However, in 81.8% of these cases, the ultimate beneficial owner remained unchanged, raising questions about whether such notifications add value and align with the regime’s goal of protecting security and public order.
The report further highlights the dominance of U.S. investors, who accounted for nearly half of all notified transactions. The United Kingdom and Switzerland followed, while only two notifications involved Chinese investors. Regionally, most investments affected the Flemish and Brussels regions, with fewer impacting the Walloon region.
Looking ahead
At the European level, initiatives are underway to amend the EU FDI Regulation of 2019. These changes aim to require all Member States to implement a screening mechanism, ensure minimum harmonization—such as on sector definitions—and address shortcomings in the current EU coordination framework.
While the ISC’s swift handling of notifications in its first year is commendable, the Belgian FDI regime still has gaps to fill. Expectations were high that the ISC would provide clearer guidance on the sectoral scope, and its first annual report could have been the perfect moment to do so. However, the ISC is not ready to make those calls just yet.
For now, with no immediate amendments to the Belgian regime on the horizon, businesses are left with one key piece of advice: when in doubt, file. Better safe than screened.
The full annual report (in English) can be consulted here.
