The UK’s current regulatory stance on foreign direct investment (FDI) in sensitive sectors balances openness to international business with national security protections. Under the National Security and Investment Act 2021, the government requires mandatory notifications for acquisitions in designated sensitive areas such as defence, energy, AI and critical infrastructure, and can review, impose conditions on, or block deals that pose security risks. These rules apply irrespective of the investor’s origin and focus on protecting strategic interests while still encouraging investment that supports UK jobs and growth. The government is consulting on refining the regime to make it more proportionate and clearer for investors.

Right now the UK welcomes foreign direct investment, but it also has a pretty robust screening system to protect national security and critical infrastructure and that’s something every international buyer has to emotionally prepare for. Under the National Security and Investment Act, acquisitions in 17 defined “sensitive sectors” (like defence, energy, AI, data infrastructure and more) must be notified and cleared by the government before completion, and the state can intervene, impose conditions, or even block a deal if it thinks national security could be at risk.

The UK’s current regulatory stance welcomes foreign direct investment broadly but with a focused national-security filter: deals in defined sensitive sectors (like defence, energy, AI, data infrastructure and critical technologies) must be notified under the National Security and Investment Act, and can be reviewed, conditioned, or blocked to protect strategic interests.