States use foreign direct investment (FDI) screening (investment screening for short) to prevent foreign investors from buying national assets at bargain prices or reducing competition, and to protect national security and critical infrastructure.
[1] As of 2023, FDI screening mechanisms are employed by around 50 countries among those participating in OECD discussions on freedom of investment.
[2] FDI screening methods include procedures to assess, investigate, authorise, condition, prohibit or unwind FDIs.
As of September 2024, 24 out of 27 EU member states had FDI screening mechanisms in place.
[4] The most recent state to have introduced an FDI screening regime is Ireland, which adopted the Screening of Third Country Transactions Act 2023 (the FDI Act), which became effective in late 2024.