FDI Screening In Ireland: One Year On

Introduction

In January 2025, we published our insight on Ireland’s newly commenced Screening of Third Country Transactions Act 2023 (the “Act”), which introduced mandatory foreign direct investment (“FDI”) screening for third-country investments in critical sectors under the Inward Investment Screening (“IIS”) regime. Read that insight [here]. This article provides a brief update on the first full year of the regime’s operation, the key changes introduced by the updated May 2026 Guidance for Stakeholders and Investors (the “2026 Guidance”), the formal adoption of a revised EU FDI Screening Regulation (the “Revised Regulation”) by the Council of the EU on 8 June 2026, and the European Commission’s proposed Industrial Accelerator Act.

A Year in Numbers

The IIS regime generated a robust level of activity in its first full year of operation. In 2025, 102 notifications were received, of which 26 proceeded to full Screening Notices initiating in-depth investigations and 2 were ultimately approved subject to conditions requiring contractual arrangements for critical services to be maintained.

The most commonly screened sectors were critical infrastructure (18 transactions), critical technologies and dual-use items (4 transactions), and the supply of critical inputs including energy (3 transactions), with the highest volumes arising from the energy, telecommunications, ICT, health and pharmaceutical sectors. The United States and United Kingdom were the primary countries of origin for ultimate investors in screened transactions.

Key Updates to the 2026 Guidance

In May 2026, the Department of Enterprise, Tourism and Employment (“DETE”) issued the 2026 Guidance, reflecting the first year of operational experience and significant EU-level developments. Most notably, interinstitutional negotiations concluded in December 2025 on a revised EU FDI Screening Regulation which, when formally adopted, will introduce mandatory screening across all Member States, establish a common minimum sectoral scope, and extend screening to intra-EU investments. The existing Regulation (EU) 2019 / 452 remains in force in the interim.

The most significant practical changes introduced by the 2026 Guidance include:

1. Control-based notification trigger: the mandatory notification criterion under Section 9(1)(a) of the Act has been reformulated from a shareholding percentage focus to whether a change of control occurs. The 25% and 50% shareholding thresholds remain relevant but are now addressed separately from the core test.
2. Internal restructurings: a new clarification confirms that group restructurings are only exempt from mandatory notification where no new third-country party is introduced into the ownership structure.
3. Portfolio investments: the 2026 Guidance clarifies that the 25% threshold for portfolio investments triggers mandatory notification only where all other Section 9(1) criteria are also satisfied, a qualification absent from the earlier guidance.
4. €2 million value threshold: a new clarification confirms that the threshold includes amounts deducted in debt restructuring and may apply where a transaction involves the acquisition of a number of associated assets or undertakings.
5. IIS Portal now fully operational: the IIS Portal and Case Management System are now live and mandatory for all notifications. Incomplete notification forms will be rejected outright, and the 90-day screening clock does not begin until a Screening Notice has been issued.

Revised FDI Screening Regulation 

On 8 June 2026, the Council of the EU formally adopted a revised EU FDI Screening Regulation (the “Revised Regulation”). The Revised Regulation was subsequently signed by the Presidents of the European Parliament and the Council on 17 June 2026, and entered into force on 26 June 2026 following its publication in the Official Journal of the European Union on that date. The Revised Regulation will apply 18 months from the date of its entry into force, at which point Regulation (EU) 2019/452 will be repealed; the existing Regulation remains in force throughout the transitional period. During that period, Member States, including Ireland, will be required to amend their national legislation to ensure compliance. The Revised Regulation introduces both structural and sectoral changes, including: (i) the introduction of mandatory screening obligations across all Member States, establishing a common minimum sectoral scope; (ii) the extension of screening to certain intra-EU investments; (iii) enhanced cooperation and information-sharing mechanisms between Member States and the European Commission in respect of foreign investments with cross-border security implications; and (iv) an expanded sectoral scope covering critical raw materials, semiconductors, quantum technologies, artificial intelligence, and the financial sector.

The Industrial Accelerator Act

On 4 March 2026, the European Commission published a proposal for the Industrial Accelerator Act (the “IAA”). Of particular significance for dealmakers is the IAA’s proposed introduction of a new sector-specific FDI review mechanism, which would operate separately from and in addition to the existing EU and Irish FDI screening regimes.

The IAA targets investments exceeding EUR 100 million in “emerging strategic manufacturing sectors”, specifically battery technologies, electric vehicles, solar PV technologies, and the extraction, processing, and recycling of critical raw materials, where more than 40% of global manufacturing capacity in the relevant sector is controlled by a third country. To obtain approval, investors must satisfy at least four of the following six conditions: (i) minority ownership below 49%; (ii) where the investment is structured as a joint venture with Union partners, the foreign investor may not hold more than 49% of ownership interests or control in that joint venture; (iii) at least 50% Union workforce; (iv) research and development spend of at least 1% of gross annual revenue within the Union; (v) IP licensing and knowledge transfer arrangements; and (vi) a published strategy for enhancing EU value chains and local sourcing, including an endeavour to source at least 30% of inputs from the EU for products sold on the EU market.

The IAA is currently progressing through the EU legislative process and is expected to feature prominently during Ireland’s Presidency of the Council of the EU. Once adopted, it will represent a significant additional layer of regulatory scrutiny for transactions in these strategic sectors, alongside the existing Act and the Revised Regulation.

Summary

The first full year of Ireland’s IIS regime has confirmed a high level of engagement across critical sectors. The 2026 Guidance introduces important clarifications, in particular the shift to a control-based notification trigger and new procedural requirements around the IIS Portal. At EU level, the Council of the EU formally adopted the Revised Regulation on 8 June 2026; it was subsequently signed by the Presidents of the European Parliament and the Council on 17 June 2026 and entered into force on 26 June 2026 following its publication in the Official Journal of the European Union. The Revised Regulation will apply 18 months from that date and will require consequential amendments to national legislation, including the Act, during the transitional period. The proposed Industrial Accelerator Act will introduce a further layer of sector-specific FDI scrutiny targeting strategic manufacturing sectors. Parties to any transaction involving third-country investors should factor these developments into their deal planning at an early stage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.