NETHERLANDS Trends and Developments Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
tieve technologie ) and the Decree on Technical Aspects ( Besluit veiligheidstoets investeringen, fusies en overnames ). Based on this new leg- islation, investments that pose risks to Dutch national security can be blocked. The NSI Act is country-neutral and as such applies to Dutch, non-Dutch and non-EU investors. In essence, the Act establishes a national security regime, rather than a foreign direct investment regime. The NSI Act establishes a screening procedure for investments targeting vital providers, compa- nies active in the area of sensitive technologies and operators of business campuses. A compa- ny that operates, manages or makes available a service whose continuity is vital to Dutch society is considered a vital provider, such as key finan- cial market infrastructure providers like signifi- cant banks, payment services providers, trading platforms, major transport hubs (Schiphol Air- port and the Port of Rotterdam), heat network or gas storage operators and extractable energy or nuclear power companies. The NSI Act will have a substantial impact on acquisitions in the Netherlands. It will require careful assessment of whether a transaction falls within its scope. Parties should expect an addi- tional administrative burden and an impact on their transaction timetables if their M&A activities fall within the scope of the NSI Act. This is especially true for companies that are active in the various Dutch tech sectors, as the Sensitive Technology Decree designates quan- tum technology, photonic technology, semicon- ductor technology and high-assurance products as “highly” sensitive. If an undertaking is active in these technologies, the relevant threshold for highly sensitive technologies is the acquisition of – or an increase in – “significant influence”, namely the possibility of the acquiring party
exercising at least 10% of the votes at the gen- eral meeting. This is especially relevant for start- ups in highly sensitive technologies, especially relatively nascent ones like quantum or photonic technology that require equity funding. The introduction of the EU Foreign Subsidies Regulation The EU Foreign Subsidies Regulation (FSR) entered into force on 12 January 2023 and cre- ates a regime aimed at combating distortions of competition on the EU internal market caused by foreign subsidies. It imposes mandatory notifi- cation and approval requirements on the acqui- sition of businesses with significant EU opera- tions and large EU public tenders, and gives the European Commission (EC) the power to launch ex officio investigations. Since 12 October 2023, the notification obligations have been fully appli- cable. Companies that are active in the EU (or plan to invest in the EU or participate in EU public ten- ders, whether in the technology sector or else- where), and that have received “financial con- tributions” from non-EU countries, need to put in place systems for gathering the information required for the FSR. To avoid delaying transac- tions, any company potentially active in larger M&A transactions having an effect within the EU should start preparations well in advance. Notifiable transactions must be approved by the EC before they can close, creating a standstill obligation. Given the above, companies contem- plating an M&A deal should consider the FSR, in addition to foreign direct investments and other regulatory aspects.
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