The following is part of our annual publication Selected Issues for Boards of Directors in 2025. Explore all topics or download the PDF.
In 2025, boards of directors face a well-established and active global foreign direct investment (FDI) landscape where regulatory review continues to expand and develop. Last year, the Committee on Foreign Investment in the U.S. (CFIUS) issued a final rule enhancing its mitigation and enforcement authority. Non-U.S. FDI review regimes, particularly in Europe, have become more active, with a number of new regimes entering into effect and an increasing number of transactions subject to regulatory scrutiny. The European Commission proposed a new EU-wide FDI Screening Regulation in March 2024, which aims to overhaul the existing EU FDI regime. As concern grows over access to and control over artificial intelligence (AI), semiconductors and other advanced and critical technologies, FDI approvals have become a significant regulatory issue for many cross-border transactions.
On January 2, 2025, the long-awaited U.S. Outbound Investment Security Program (the Program) became effective. Under the Program, U.S. persons are prohibited from engaging in, or required to notify the U.S. Department of the Treasury (Treasury) regarding, a broad range of transactions involving entities engaged in certain activities relating to semiconductors and microelectronics, quantum information technologies and AI systems in “countries of concern” (presently limited to China, Hong Kong and Macau). In early 2024, the European Commission began a consultation and assessment process for developing an outbound investment review program focused on the risk of leakage of “emerging and sensitive technologies,” and plans to publish a proposed policy response towards the end of 2025.