The European Commission’s proposed Industrial Accelerator Act adds a new industrial-policy layer that may affect how major non‑EU investments are assessed in strategic sectors. Here’s what to watch for in Romania’s FDI screening context.
For non‑EU investments falling within the scope of the IAA, which will not replace FDI screening mechanism, but will add a new industrial layer, the FDI screening approach will become significantly more stringent.
Under IAA, approval will be based on the investor’s ability to demonstrably and continuously generate added value within the EU. This translates into structural constraints on ownership and control, mandatory cooperation with EU partners, special value conditions regarding workforce, IP sharing, R&D and EU sourcing, and ongoing monitoring obligations throughout the entire lifecycle of the investment.
In practice, non‑EU investors will be required to accept long‑term operational and governance limitations as the price for accessing the EU market in strategic manufacturing sectors.
The EU remains formally open to FDI, but the IAA signals a move from pure openness to conditional openness.
For countries like Romania, where FDI screening is already broad, the interaction between investment screening and EU industrial policy will become more and more relevant in sectors such as energy, technology and industry. As these two frameworks are complementary, operating as two layers of the same governance system, most likely they will be coordinated within the same authority responsible for implementing FDI rules (i.e., the Commission for Examining Foreign Direct Investments).
On 4 March 2026, the European Commission (EC) published the Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a framework of measures for the acceleration of industrial capacity and decarbonisation in strategic sectors and amending Regulations (EU) 2018/1724, (EU) 2024/1735 and (EU) 2024/3110 (Proposal of Industrial Accelerator Act or IAA Proposal) a new regulation to accelerate industrial capacity and decarbonisation in strategic sectors while ensuring that large foreign investments deliver maximum value for the EU economy.
How to achieve such goals? One of the means to achieve the objectives of the IAA Proposal is to ensure foreign investments exceeding EUR 100 million in batteries, EVs, solar PV, and critical raw materials generate maximum added value for the EU economy. As per the IAA Proposal, “mandatory conditions on FDI are necessary to achieve the objective of maximising the benefits of these investments across Member States, strengthening the Single Market benefits and leveraging the access to the Single Market. They will ensure investment comes with know-how development, job creation, and value chain integration”.
Interplay with existing fdi screening regime
The Proposal of Industrial Accelerator Act operates in complementarity to the existing Foreign Direct Investment framework, by adding a new industrial layer. It thus applies without prejudice to the screening mechanism established under Regulation (EU) 2019/452 (FDI Regulation).
Scope of application
What’s caught: high‑value, control‑conferring FDI by non‑EU investors in key manufacturing sectors with significant third‑country capacity.
- Foreign direct investments, which are defined as “investment, including greenfield investments, into an EU target or an EU asset by a foreign investor or by the foreign investor’s subsidiary aiming to establish or to maintain lasting and direct links between the foreign investor and the entrepreneur to whom or the undertaking to which the capital is made available, or at using an EU asset, in order to carry on an economic activity in a Member State, including investments which enable effective participation in the management or control of a company carrying out an economic activity”
- exceeding a value of EUR 100 million
For the purposes of determining whether the threshold is reached, only previous investments by the same foreign investor in the same EU target or asset made from the date of entry into force will be aggregated. - which would result in control over the EU target or EU asset
Foreign investors shall be considered to have control, where the investment in question reaches either of the following thresholds: (a) 30 percent or more of the share capital or voting rights in an EU target; (b) 30 percent or more of ownership of an EU asset, and leasehold or other rights conferring control over an EU asset.
Where a foreign investor’s acquisition or establishment of an investment would result in foreign investors collectively holding more than the ownership or control thresholds, that acquisition or establishment shall be notified.
For the purposes of calculating whether either of the thresholds has been reached, aggregated interests held directly or indirectly, including through affiliates, chains of ownership or by foreign investors acting in concert, shall be considered. - in the emerging strategic manufacturing sectors – (i) battery technologies and its value chain for battery energy storage systems; (ii) pure electric vehicles, off-vehicle charging hybrid electric vehicles and fuel-cell electric vehicles, including components related to electrification and digitalisation; (iii) solar PV technologies; (iv) extraction, processing and recycling of critical raw materials
The strategic sectors may evolve as under the IAA Proposal, the EC has the right to extend the sectors to a range of other net-zero technologies and electric propulsion technologies. Digital technologies, AI, quantum, and semiconductors are explicitly excluded.
where more than 40 % of the global manufacturing capacity is held by the third country of which the foreign investor is a national or undertaking.
What’s out of scope?
- Investors and investments covered by economic partnership and free trade agreements in force or provisionally applied by the EU to the extent relevant commitments have been made under those agreements, including investments made by the EU subsidiaries of such foreign investors;
- Investments targeted at providing services, including investments made by the EU subsidiaries of investors;
- Portfolio investments.
Conditions for approval
For any in‑scope non‑EU investment its approval hinges on concrete, measurable value‑add obligations in the EU.
Starting 12 months after entry into force, Investment Authorities shall approve only those FDIs made directly by foreign investors that meet at least 4 out of the following 6 conditions—with the EU workforce condition being mandatory as one of the four.
- Ownership cap — max 49% – The foreign investor does not acquire, hold, or exercise more than 49% of the share capital, voting rights, or equivalent ownership interests in any EU target; or equivalent ownership/leasehold/other rights conferring control over an EU asset.
- Joint venture with EU entities (≤49% foreign stake) – The FDI is undertaken through a joint venture with one or more EU entities, with the foreign investor holding no more than 49% in any participating EU entities. The JV must ensure effective participation of EU partners in management, technology transfer, and capacity building.
- IP licensing and allocation rule – The foreign investor enters into agreements licensing IP and know‑how to the EU target/asset to enable its economic activities in the context of the FDI. All IP developed by the EU target (or the legal entity owning the EU asset) prior to the FDI, or without collaboration, remains fully and exclusively owned by that EU entity. IP developed as a result of collaboration with the foreign investor’s other business assets, or by the JV, shall be jointly owned by the foreign investor and the EU target/JV/legal entity of the EU asset.
- EU workforce requirement — mandatory among the four conditions – At least 50% of the workforce employed in the context of the FDI, at implementation and continuously throughout operation, must be EU workers across all categories (operational, technical, supervisory, managerial). Employment must be accompanied by training and capacity building.
- R&D investment in the EU – The foreign investor annually directs to R&D in the EU an amount equivalent to at least 1% of the gross annual revenue of the EU target, or the gross annual revenue generated by the EU asset.
- EU sourcing — minimum 30% of inputs + published strategy – The foreign investor prepares and publishes on its website a strategy to enhance EU value chains and prioritise sourcing of inputs from the EU; it endeavours to source at least 30% of inputs used for products placed on the EU market from the EU.
Implementation details: The EC will adopt an implementing act within 6 months of entry into force to set detailed verification rules for compliance with approval conditions.
Obligations & sanctions
Obligation to notify & stand-still: Foreign investors shall notify any planned direct investment, and which would result in control over the EU target or EU asset. Until approval by the Investment Authority/ EC is granted, the FDI cannot be implemented.
Sanctions for the deeds detailed below shall be established by the Member States Investment Authorities. As per the IAA Proposal, the penalty payments established by the Investment Authority shall be effective and proportionate.
- Noncompliance with the notification requirements. NB: The IAA Proposal provides a minimum penalty of 5 % of the average daily aggregate turnover of the foreign investor undertaking and minimum 5% of the investment value if foreign investor is a private person.
- Noncompliance with conditions based on which the FDI was approved
- Monitoring obligations: the foreign investor shall regularly report to the Investment Authority on compliance with the conditions based on which the FDI was approved.
Also, where the EC decides to assess the FDI, it may by decision impose penalties if the foreign investor provides false or misleading information in their notification, or if it does not supply the information required for the EC to perform its review obligation. The penalties imposed by the EC shall not exceed the 5% average daily turnover of the foreign investor, or in case of a private person foreign investor, 5% of the investment value.
Procedural aspects
Implementation Authorities – interplay between Member States and EC
- Member States: Within 1 month after entry into force, each Member State must designate an Investment Authority to review FDI under the IAA Proposal. The competent Investment Authority is the one where the EU target or EU asset is located.
- EC: The EC may intervene: (a) on its own initiative where the FDI could significantly impact added‑value creation in the EU market (i.e., it is of particular strategic importance for the internal market; it has considerable economic impact on the territory of more than one Member State; it has high potential of disrupting the security of supply of that emerging strategic sector or related value chains in the EU, or security in more than one Member State; it has high potential of having detrimental environmental effect in more than one Member State; it is of a particularly high value compared to other investments in that emerging strategic sector; (b) upon request from an Investment Authority handling a notification or from another Member State’s Investment Authority where the FDI would significantly impact its territory; or (c) on its own initiative for FDI > EUR 1 billion.
The EC retains oversight of all admissible notifications and may issue non‑binding opinions that carry considerable weight (details below)
- Multi-jurisdictional investments: Where the relevant EU targets or assets are located in more than one Member State, the foreign investor shall notify the competent Investment Authorities of all Member States concerned and the EC. The Member States concerned shall coordinate the review of such notifications and agree on the conditions imposed with the other Member States concerned, as well as with the EC. The EC shall decide which conditions shall be applied to the foreign direct investment in case there is no agreement between the Member States concerned.
Timeline and procedure before National Investment Authorities
- The Investment Authority shall decide on the admissibility of the notification within 30 days of receiving the notification (extendable once with further 15 days if justified) and shall transfer the notification to the EC.
- Within 30 days of receipt, the EC may issue a written opinion on the investment notified.
- Decision timeline of the Investment Authority: not earlier than the EC’s opinion (or its lapse) and no later than 60 days from notification (75 days if the admissibility phase was extended). The Investment Authority may add an additional 30 days if duly justified. The reasoned decision must explain how the EC’s opinion was considered. The reasoned decision is notified to the EC within 3 days.
- If the decisions diverge from the EC’s opinion: the Investment Authority must re‑assess in greater detail within an additional 2 months; the decision enters into force only after this period.
- Monitoring & appeal: approvals must set investor reporting obligations to verify continuous compliance with the conditions that triggered the approval of the investment. The Investment Authority shall transmit the investor’s reports re. compliance with the conditions to the EC together with its own assessment on each report.
- Judicial recourse shall be available against admissibility and final decisions.
By Vanessa Nistor
