Country Note UK 2025

By Veronica Roberts and Ruth Allen, CELIS Country Reporters for the United Kingdom.

Foreign direct investment is firmly recognised as essential to the growth of the UK economy, and both the current and previous UK governments have emphasised that the UK is “open for business” and keen to attract international investment. However, despite a commitment to a pro-investment approach, the standalone investment screening regime introduced by the National Security and Investment Act 2021 has resulted in a sea-change in the regulatory environment in the UK. Certain transactions in 17 sensitive sectors are subject to mandatory notification obligations, and the Secretary of State also has broad powers to call in a wider range of transactions for review in any sector where s/he reasonably considers that a risk to national security may arise (broadly interpreted). Since the new regime entered into force on 4 January 2022 the Investment Security Unit has quickly established itself as one of the most active authorities globally, receiving around 900 notifications each year. Around 95% of notified transactions are cleared unconditionally within the initial 30-working day review period, but the risk of conditions being imposed on clearance – or even outright prohibition – needs to be taken seriously, and the notification and review process can be a considerable additional burden for investors.