Ireland’s first year of FDI screening: early lessons and the EU floor still to come

by Paul Henty | Jul 6, 2026 | Merger control

Ireland was among the later EU member states to adopt a foreign investment screening regime.  The Screening of Third Country Transactions Act 2023 commenced on 6 January 2025, giving Ireland its first mandatory regime for reviewing acquisitions of Irish businesses and assets by investors from outside the EEA and Switzerland.  The principal purpose of the Act is to establish a screening regime designed to safeguard national security and public order by reviewing acquisitions of, and investments in, Irish businesses and assets by such investors.

In May 2026, the Department of Enterprise, Tourism and Employment published its first Annual Report, covering the regime’s first year to 31 December 2025 (available here: Screening of Third Country Transactions Act 2023 Annual Report 2025).  The report merits attention beyond Ireland. It offers an unusually clear picture of how a brand-new European screening regime behaves in practice, and it arrives just as the ground shifts beneath it. The revised EU FDI Screening Regulation, formally adopted in June 2026 and applying from 17 January 2028, will require every Member State to meet a harder common baseline. Ireland’s regime, barely three years old by then, will already need to be revisited.

A new regime beds in

The Act protects Ireland’s security and public order by requiring prior notification and clearance of qualifying transactions. The regime is mandatory and suspensory in practical effect: qualifying transactions must be notified before completion, and the parties must build clearance risk into the signing-to-closing timetable. It applies where a third-country undertaking acquires control of an Irish asset or undertaking, or crosses the 25% or 50% voting thresholds, in a transaction worth at least €2 million that touches one of the sensitive areas drawn from the EU framework: critical infrastructure, critical technologies and dual-use items, critical inputs, sensitive data and media plurality. The Minister also holds a discretionary call-in power over transactions outside the mandatory criteria.

What the first Annual Report shows

The first-year caseload was concentrated in sectors that matter to cross-border investors.

The most frequently notified sectors were energy, telecommunications, ICT, healthcare and pharmaceuticals.   These correspond to some of the busiest sectors generally in terms of M&A where we have seen, for example, private equity and venture capital investment.

Of the transactions that proceeded to screening, the target activities most often related to critical infrastructure, followed by critical technologies and dual-use items, critical inputs, and access to sensitive information.

Source: DETE, Screening of Third Country Transactions Act 2023 Annual Report 2025.

The numbers describe a regime that is active but measured. In 2025 the Department received 102 notifications. Of these, 66 were determined not to meet the mandatory notification criteria and were not formally screened. Screening notices issued in 26 cases, each triggering an in-depth review. Eight remained under assessment at year end, one was withdrawn and one was rejected as incomplete.

Of the 26 screened transactions, 23 involved direct third-country investment and three were indirect. The Department also reviewed 74 notifications shared by other Member States through the EU cooperation mechanism where the transaction had an Irish element.

It is notable that during the course of the year, nothing was blocked, and the call-in power was not used at all.

However, two transactions were approved subject to conditions, in both cases to preserve contractual arrangements for the delivery of critical services. Because of the aggregated and anonymised nature of the report, we do not have further details about the conditions such as the duration of compulsory supply or the extent of monitoring obligations.

The Annual Report does not identify any data-localisation, information-protection or access-control remedies. That contrasts with practice under the UK’s National Security and Investment Act, where information-security remedies have featured in final orders.  For example, in Viasat/Inmarsat, the UK Government required controls to protect information from unauthorised access and to ensure continuity of strategic capabilities for the UK Government. Similar remedies could arise in appropriate Irish cases, particularly where the target is a government contractor or handles sensitive public-sector data.

The unused call-in power deserves a word of its own. Under section 12, the Minister may screen transactions that should have been notified but were not, and, more significantly, transactions that fall outside the mandatory criteria altogether where there are grounds to believe risks to security or public order may arise. A deal outside the critical sectors, or below the €2 million threshold, is therefore not beyond the regime’s reach. That the power went unused in year one reflects restraint, not absence.

The report does not identify the transactions screened, which is unsurprising given the commercial sensitivity of the regime. But the sector profile is revealing. It places the regime squarely in the path of the kinds of energy, telecoms, digital infrastructure, healthcare and life sciences transactions that regularly feature in international deal flow.

The real lesson: precautionary filing

The most telling statistic is not the two conditional approvals. It is the 66 notifications, roughly two-thirds of all filings, that turned out not to require screening at all.

That pattern suggests a conservative filing culture is forming. With a €2 million value threshold, broadly drawn sectors and criminal sanctions for failure to notify, parties are understandably filing defensively wherever scope is uncertain. The cost is real: management time, transaction friction and timetable risk on deals the regime was never aimed at. The Department’s updated Guidance, published alongside the report, responds in part, placing greater emphasis on the control analysis, rather than treating shareholding thresholds as the whole question.  Whether that reduces defensive filing remains to be seen. For advisers, the first-year message is that jurisdictional analysis under the Act repays early and careful attention, in both directions.

Friendly capital is still screened capital

For international deal counsel, one finding stands out. The primary countries of origin of ultimate investors in screened transactions were the United States, with nine, and the United Kingdom, with eight, plus two further cases involving combined US and UK ownership.

Indirect investments screened: United Kingdom 2, Japan 1. Source: DETE, Screening of Third Country Transactions Act 2023 Annual Report 2025.

Notably, only one screened transaction involved a Chinese ultimate investor; the regime’s first-year caseload was overwhelmingly US and UK capital.

Ireland’s regime, like most European screening mechanisms, is country-agnostic. It asks what is being acquired and by whom, not whether the investor comes from a friendly jurisdiction. The two largest sources of investment into Ireland are therefore also the most frequently screened. The practical point for clients is simple: familiar investor origin removes no filing risk. A US fund or a UK trade buyer acquiring an Irish target in a sensitive sector should expect the regime to apply with full force.

Timing is manageable, but not frictionless

The report gives welcome transparency on timelines because these are the figures around which deal teams will structure and timetable transactions.

Source: DETE, Screening of Third Country Transactions Act 2023 Annual Report 2025.

Two cautions sit inside those averages. The initial assessment ranged as high as 47 days, and because the statutory clock only starts when the screening notice issues, the front end of the process is less predictable than the averages imply. Deal timetables should treat the ten-day administrative target as an aspiration, not an entitlement.

The EU floor is coming

All of this now has to be read against the revised EU FDI Screening Regulation, which replaces the 2019 framework that the Irish Act was built to implement. From 17 January 2028, every Member State must maintain a screening mechanism meeting a common minimum: mandatory prior authorisation across a defined list of sensitive sectors, including dual-use and military items, semiconductors, quantum technologies, artificial intelligence, critical raw materials and critical infrastructure in energy, transport and digital; a harmonised two-phase procedure with an initial review of up to 45 days; a prior authorisation requirement before completion for investments within the common minimum scope; penalties for failure to file and gun-jumping; and powers to review non-notified transactions after completion.

Significantly, the new framework also reaches certain intra-Union investments, where the investor is an EU entity ultimately controlled from outside the Union. Routing an investment through an EU holding structure will no longer, of itself, place it beyond screening.

The report also shows how plugged in Ireland already is to the EU’s cooperation mechanism, the very machinery the new Regulation overhauls. In 2025 the Department shared 23 notifications outward with the Commission and other Member States, drawing two requests for information from the Commission and three from other Member States, and reviewed 74 inbound notifications with an Irish element. With the revised Regulation entering into force on 16 July 2026, that traffic will run through a reformed, risk-filtered mechanism with harder sharing triggers and tighter deadlines. Multi-jurisdictional deals touching Ireland should expect their filings to travel.

Ireland drafted its regime late and with an eye to the direction of travel, so much of the new baseline is already reflected in the Act: mandatory notification, a standstill in practice, a two-stage process and cooperation-mechanism plumbing. But the fit is not exact. Sector definitions, procedural architecture and key concepts such as beneficial ownership will need review against the Regulation’s requirements before January 2028. A regime that has only just bedded in will be renovated barely three years after commencement, and the light-touch character of year one is not guaranteed to survive the exercise.

Practical takeaways for investors and their advisers

First, build Irish FDI screening into deal timetables early, alongside merger control, and remember the regimes run on different tracks with different tests. Second, test control, sector scope and investor origin before signing rather than after: two-thirds of first-year filings proved unnecessary, and disciplined early analysis can spare clients that cost, while the criminal consequences of a missed mandatory filing make the opposite error far worse. Third, for multi-jurisdictional transactions, coordinate European filings from the outset: the cooperation mechanism already connects national reviews, and the revised Regulation will tighten that coordination further. Finally, do not price Ireland as a permanently light-touch jurisdiction. Year one was measured in outcomes, but the framework, the enforcement tools and now the EU floor all point in one direction.

Ireland’s first year offers European deal counsel a rare, data-rich look at a modern screening regime finding its feet. The second act, as Ireland aligns its regime with the Union’s new common baseline, may prove even more instructive.

Paul Henty, Partner

(UK and Ireland qualified solicitor)

Beale & Company Solicitors LLP, London and Dublin