FDI filings surged across the EU in 2025, but enforcement outcomes remained stable, with manufacturing, critical technologies and critical infrastructure continuing to attract the closest scrutiny.

On 14 October 2026, the European Commission published its sixth annual report on the screening of foreign direct investments ("FDI") into the EU, covering developments in 2025. The report shows a marked increase in screening activity across the EU, driven by the full rollout of national screening regimes and rising use of the EU cooperation mechanism. At the same time, the underlying enforcement picture remains largely unchanged: most investments continue to be cleared without conditions, while remedies remain uncommon and prohibitions particularly rare. The report also confirms the continued focus of FDI authorities on manufacturing, which remained the largest category of transactions subject to more detailed scrutiny, with critical technologies and critical infrastructure featuring particularly prominently.
 

National screening volumes rise sharply as the EU-wide FDI rollout completes

Member States handled 4,773 notifications and ex officio cases in 2025, up from 3,136 in 2024, representing an increase of approximately 52%. As EU M&A activity grew by only around 4% over the same period, the increase appears to reflect not only higher transaction volumes but also increasingly cautious filing behaviour.

Only 38% of these cases proceeded to formal screening, with the remainder being deemed out of scope or otherwise not requiring review. However, this figure is heavily influenced by Sweden's large volume of cases that did not require formal screening. Excluding Sweden, approximately 65% of notified transactions underwent formal review.

Substantive outcomes remained broadly stable and within one percentage point of the 2024 figures: 87% of formally screened investments with reported outcomes were authorised without conditions, 9% were subject to conditions or mitigating measures, approximately 1% were prohibited, and 3% of filings were withdrawn before a formal decision was adopted.

Activity under the EU cooperation mechanism increased in parallel, with notifications rising by approximately 40% to 667 cases. While a larger share of transactions progressed to Phase 2 review and involved screening in multiple Member States, formal intervention at EU level remained rare, with the Commission issuing opinions in fewer than 2% of notified cases.
 

Manufacturing remains at the centre of in-depth scrutiny

Manufacturing remained the sector most frequently subject to in-depth scrutiny, accounting for 53% of all Phase 2 cases. Information and communication technologies was the second most scrutinised sector, representing 19% of Phase 2 reviews.

Within manufacturing, the principal drivers of Phase 2 scrutiny continued to be concerns relating to critical technologies, critical infrastructure and the supply of critical inputs. The report nevertheless points to a broader assessment of potential security risks, with access to sensitive information increasing as a standalone driver of Phase 2 review from 5% in 2024 to 12% in 2025.

Among cases involving critical technologies, the defence and aerospace sectors accounted for the lion's share of Phase 2 reviews, representing 31% and 28% of cases respectively.
 

The revised EU framework takes shape

By the end of 2025, all 27 Member States had adopted legislation establishing an FDI screening regime, completing a rollout that has taken almost a decade. As certain regimes, including those of Croatia and Cyprus, only became fully operational during 2026, notification volumes may continue to increase in the coming years as the European screening landscape reaches full maturity.

Attention is also increasingly turning to the revised EU FDI Screening Regulation. Once applicable from 17 January 2028, the new framework will introduce a mandatory pre-closing filing requirement and harmonised review timelines across all Member States, including a baseline 45-day Phase 1 review period. As a result, the continued increase in filing volumes observed in 2025 may foreshadow a more integrated and formalised EU screening system in the years ahead.
 

What to take away?

• Higher screening volumes do not signal a general shift towards intervention. Despite the significant increase in notifications, substantive outcomes remained broadly stable, with most transactions cleared unconditionally and prohibitions continuing to be exceptional.
• Parties should look beyond sector labels. The assessment increasingly turns on the target’s underlying technologies, infrastructure, customers, supply relationships and access to sensitive information. Potential FDI relevance may therefore arise even where the target’s principal business appears relatively commonplace or falls outside sectors conventionally perceived as sensitive.
• FDI analysis should begin at the outset of a transaction. Early analysis should identify relevant jurisdictions and substantive risk factors, enabling transaction timetables and risk allocation mechanisms to accommodate potential FDI implications from the outset, particularly in multi-jurisdictional transactions.
• A complete EU screening map does not mean a harmonised system. With all 27 Member States now having adopted screening legislation, significant differences remain in jurisdictional scope, filing thresholds, sector coverage, procedural requirements and review timelines. The report nevertheless marks a transition from the rollout of national regimes to a phase of increasing convergence, with the revised EU FDI Screening Regulation expected to bring greater procedural alignment across Member States from 2028.