UK Government Appears Ready to Bring Forward Legislative Proposals for More Rigorous FDI Screening

UK Government Appears Ready to Bring Forward Legislative Proposals for More Rigorous FDI Screening

June 4, 2020, Covington Alert

The UK has, in recent years, been one of the most attractive and open climates for foreign direct investment (“FDI”). Whilst the UK’s net FDI inflows have fallen significantly since 2016, it remains, as of 2018, one of the highest ranked countries in the world by FDI inflows.

However, the UK Government’s power to scrutinise and intervene in FDI transactions relating to UK businesses with national security implications is more limited than many of its peer nations. In particular, the notification system is voluntary, and the scope for government inter vention is limited to certain sectors and requires specific turnover thresholds to be met.