The introduction of the National Security and Investment Act 2021, which came into force on 4th January 2022, signifies a key change in the UK’s regime of control over foreign direct investment (FDI) and has the potential to impact almost all types of business and investment.

The regime introduced by the Act gives the government broad powers to screen investment into UK companies and assets. This includes both a requirement for certain transactions to be cleared by the UK government before they can proceed, and an ability for the government to “call in” transactions falling outside the mandatory regime and which may nonetheless pose a national security risk.

Please see our NSIA briefing note here for more details on the scope of the Act, as well as potential implications of non-compliance. Our NSIA flowchart shows the stages to be considered in determining whether or not the Act applies.

Clearance can be obtained on either a voluntary or mandatory basis – this may be conditional if the government has concerns about the transaction.

Given the potential impact on both timing and structure of an investment, it is important for the implications of the Act to be considered at an early stage.

We can provide tailored and pragmatic advice to help you navigate the complexities of the new regime. If you wish to discuss a potential transaction or have any questions about how the National Security Act may impact you please contact Catriona Macallan.

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