Outbound Investments: European Commission Calls for Review

On January 15, 2025, the European Commission (EC) issued a non-binding recommendation “calling on EU Member States to review outbound investments” in certain strategic sectors.[1] [2]

The primary goal of the recommendation is to safeguard the EU’s economic security by ensuring that critical technologies and intellectual property do not “fall into the wrong hands”.

The recommendation focuses on three key technology areas of strategic importance: semiconductors, artificial intelligence and quantum technologies (as outlined in Article 1). While other sectors—such as biotechnology—were initially considered for inclusion, they are not part of the current scope. However, this list may be subject to future updates.

Article 2 defines the scope of the review and clarifies that “outbound investments” refer to any direct or indirect investments made by individuals or entities residing or established within the EU. The recommendation covers various types of transactions, including acquisitions of shares, mergers, transfers of tangible or intangible assets (such as IP), joint ventures and venture capital deals.

The Commission encourages the establishment of voluntary or mandatory screening. The recommendation outlines a minimum set of information that Member States should obtain, including details on R&D agreements, IP licenses and whether the investor has received public funding from the EU or the Member State.

While the recommendation does not single out specific countries, the Commission recommends that EU Member States focus on reviewing investments in countries with elevated risk levels.

For our European clients considering transactions involving semiconductors, artificial intelligence or quantum technologies in non-EU countries, we recommend reaching out for tailored advice.

This recommendation from the EU Commission comes at a time when U.S. authorities have enacted a similar regulatory regime. See our U.S. team alert here: Get Ready for the New Outbound Investment Security Program | Paul Hastings LLP.