Buying a Dutch tech or energy company? Since 1 June 2023, the deal may have to pass through “Vifo” — the Dutch investment-screening law. Buying without notifying: the transaction can be declared void.
What Vifo is and when it applies
Vifo (Wet veiligheidstoets investeringen, fusies en overnames) — the Dutch investment, merger and acquisition security-screening law, effective 1 June 2023. It requires prior notification before acquiring control of Dutch businesses in two groups:
- Vital infrastructure (vitale infrastructuur): energy, telecoms, water, healthcare, finance, ports, aviation… — government-listed.
- Sensitive technology (sensitieve technologie): dual-use (civil–military) tech, semiconductors, AI, quantum, biotech…
Applies to all foreign investors — including Vietnamese — “friendly” or not.
The BTI notification process
Handling authority: the BTI (Bureau Toetsing Investeringen — Investment Screening Bureau, under the Dutch Ministry of Economic Affairs). Process:
- Step 1 — notify: file a notification with BTI before closing — describing buyer, seller, structure, sector.
- Step 2 — initial review: BTI assesses national-security risk — many deals clear here.
- Step 3 — in-depth investigation: if concerns arise, BTI opens detailed review (more time, information requests).
- Decision: approve / approve with conditions (e.g., keep data in the Netherlands, maintain operations) / prohibit.
Timing: build waiting time into deal timetables — never promise “immediate” closing while Vifo is pending.
Consequences of non-compliance
- Void transactions: closing a notifiable deal without notifying — the transaction can be declared void (as if it never happened).
- Fines: breaching notification/cooperation duties can draw penalties.
- Forced divestment: authorities can order resale of acquired stakes.
- Contract risk: sellers may sue if buyers collapse deals over Vifo — Vifo risk-allocation clauses in the SPA are mandatory.
Strategy for Vietnamese investors
- Assess early: once a target is identified, determine whether the Dutch company sits in vital infrastructure/sensitive technology — ask Dutch counsel, never self-diagnose.
- Deal structure: ownership ratios and control rights (not just share % — veto rights, board seats count too) affect notification duties.
- SPA terms: conditions precedent (Vifo clearance), a long enough long-stop date, risk allocation if prohibited/conditioned, reasonable break fees.
- ‘Clean’ file: prepare the buyer’s profile (ownership structure, funding sources, government links) — transparency speeds review.
Comparison with other EU countries
Dutch Vifo is part of the EU-wide FDI screening wave (Regulation 2019/452): Germany (AWG/AWV — see EXP-3893), France (IEF — see EXP-3910), Italy, Spain… all run similar regimes. Common thread: notify first, wait for clearance, possible prohibition. Differences: each country’s scope, thresholds and timelines differ — cross-border deals (buying groups with subsidiaries in several EU states) may need parallel filings.
Risks and notes
‘Thought it was out of scope’ risk: seemingly civilian tech classified dual-use — get expert assessment early. Timing risk: in-depth review drags — sellers lose patience, rivals intervene. Conditions risk: clearance with heavy conditions (tech-transfer limits, job guarantees) — price it in. Political risk: good EU–Vietnam relations (EVFTA) help, but national security is an independent test — never rely on “good relations”.
Frequently asked questions
What is Vifo?
The Dutch investment, merger and acquisition security-screening law (effective 1/6/2023): prior notification before acquiring control of Dutch businesses in vital infrastructure (vitale infrastructuur) or sensitive technology (sensitieve technologie).
What if Vifo notification is skipped?
The transaction can be declared void, fined, with forced divestment; sellers may sue if deals collapse over Vifo — SPAs need Vifo risk-allocation clauses.
How does the BTI process run?
File notification with BTI (Dutch Ministry of Economic Affairs) before closing → initial review (many clear) → in-depth investigation if concerns → decision: approve / with conditions / prohibit.
What should Vietnamese investors prepare?
Early scope assessment of the target, ownership/control structuring, SPA conditions precedent + long-stop dates, and a transparent buyer profile (ownership, funding).
Contact FLAT Law Firm
FLAT Law Firm advises on Dutch deals: Vifo assessment, BTI notification filings, SPA terms and coordination with Dutch counsel. Contact us when targeting an acquisition.
This article has been quality-reviewed by the FLAW AI Legal Council