24-hour hotline : 23 922 922
e-mail address : enquiry@tid.gov.hk
Ref. : EIC 230/6/13
29 June 2026
Dear Sirs,
Commercial Information Circular No. 554/2026
European Union (EU)* : Foreign Direct Investment (FDI) Screening Regulation
Further to Commercial Information Circular No. 217/2019 of 25 March 2019, the European Parliament and the Council of the EU have adopted Regulation (EU) 2026/1386 concerning the revisions of EU FDI screening framework, which repeals Regulation (EU) 2019/452. Regulation (EU) 2026/1386 was published on 26 June 2026 and can be accessed through the following link: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202601386.
2.In gist, the Regulation introduces mandatory screening mechanisms across the EU, supported by harmonised national rules designed to strengthen the EU’s security and public order. It establishes a common minimum sectoral scope for investments subject to mandatory prior authorisation, which covers defence and dual‑use items, semiconductors, artificial intelligence, strategic raw materials and financial services, etc. The Regulation additionally expands screening to indirect foreign investments made by EU based entities that are ultimately owned or controlled by non-EU individuals or entities.
3.EU Member States are required to adopt a two-phase review mechanism in their national screening systems. First, an initial review will be conducted to assess whether the investment is likely to negatively affect security or public order, which is to be completed within 45 calendar days of the filing. If the subject investment requires further scrutiny, an in-depth investigation will be conducted, the duration of which is to be determined by individual Member States.
4.The Regulation will enter into force on 16 July 2026 and apply from 17 January 2028, except that certain Articles will apply from 16 July 2026. EU Member States will adapt their national laws to the new minimum standards by 17 January 2028. Relevant information on the Regulation prepared by the EU Commission, including the factsheet and frequently asked questions (FAQ), is available at https://policy.trade.ec.europa.eu/enforcement-and-protection/investment-screening_en.
5.For enquiries concerning the content of this circular, please contact the undersigned at 2398 5684.
Yours faithfully,
(Miss Jenny MOK)
for Director-General of Trade and Industry
* The EU comprises 27 member countries, namely, Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
| Note 1: | While every effort is made to ensure the accuracy of the above information, the Department cannot guarantee this to be so and will not be held liable for any reliance placed on the same. |
| Note 2: | "Regulatory Alert - EU" of the Hong Kong Trade Development Council provides up-to-date information on the latest developments in EU trade policy and trade regulations. It is available at: https://research.hktdc.com/en/regulatory-alerts/eu. |