Q&A
There are 17 sectors covered by the new UK FDI rules where mandatory notification will be required under the UK National Security and Investment Bill. No sectors are expressly prohibited for foreign investment.
Sectors covered by the new UK FDI rules requiring mandatory notification are
Advanced Materials
Advanced Robotics
Artificial Intelligence
Civil Nuclear
Communications
Computing Hardware
Critical Suppliers to Government
Critical Suppliers to the Emergency Services
Cryptographic Authentication
Data Infrastructure
Defence
Energy
Military and Dual-Use
Quantum Technologies
Satellite and Space Technologies
Synthetic Biology
Transport
The lowest trigger threshold in the mandatory sectors is stated to be the acquisition of more than 25% of the votes or shares in an entity.
The Government originally proposed that the acquisition of 15% or more of the votes or shares in an entity in one of these sectors would also require notification so that the Secretary of State could decide whether a trigger event (the acquisition of material influence over the policy of an entity) will take place. However, it looks likely this lower threshold will be dropped after lobbying.
The UK Government will have the power to call in acquisitions of control over other entities or assets, called ‘trigger events’, where the Secretary of State reasonably suspects that there is, or could be, a risk to national security as a result of the acquisition of control.
Investments into entities or assets involving land, tangible (or, in Scotland, corporeal) moveable property, ideas, information or techniques which have industrial, commercial or other economic value (e.g. trade secrets, databases, source code, algorithms, formulae, designs, plans, drawings and specifications or software) are potentially subject to call in by the UK Government. Land or moveable property situated outside the UK or its territorial seas, are also potentially caught if used in connection with activities carried on in the UK, or the supply of goods or services to persons in the UK.
Although the lowest trigger threshold is stated to be the acquisition of more than 25% of the votes or shares in an entity, the acquisition of 15% or more of the votes or shares in an entity also give rise to a trigger event if the acquiror will acquire material influence over the policy of an entity.
