Assessing and mitigating national security risks associated with greenfield investments in the Netherlands.
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Foreign direct investment (FDI) plays a key role in economic growth. However, greenfield investments – where foreign companies establish new operations – may pose national security risks similar to those linked with brownfield investments. In the Netherlands and across Europe, risks include threats to the continuity of vital processes, leakage of critical knowledge or technology, and the creation of strategic dependencies. The current Dutch investment screening mechanism, the Vifo Act, focuses primarily on brownfield FDI, leaving regulatory gaps.
We performed a comparative analysis of national security risks associated with greenfield versus brownfield investments. In addition to examining the Dutch context, the study explored investment screening practices and reviewed relevant case studies from several European countries, including the United Kingdom, Germany, France, Sweden, the Czech Republic, Spain, and Greece. Drawing on these international experiences, we identified lessons applicable to the Netherlands. The research focused on potential risks, sector vulnerabilities, regulatory responses, and the implications for the Dutch investment climate.
Greenfield investments can present substantial national security risks, particularly regarding the continuity of vital processes and increasing strategic dependencies, with knowledge or technology transfer being less pronounced. Most countries apply similar screening processes for greenfield and brownfield investments, typically focusing on critical sectors such as energy, telecommunications and defence. Alignment with European Union level standards assists in managing cross border investment flows and prevents inconsistencies in regulatory application. The Netherlands has opportunities to strengthen its investment review mechanisms to address identified gaps.
In the Dutch context, there are opportunities to strengthen investment review mechanisms. Extending the Vifo Act to encompass greenfield investments comprehensively would offer greater transparency and consistency. Alternatively, sector-specific legislation could help capture high-risk investments in sensitive infrastructure areas. The analysis highlights the importance of maintaining a careful balance between safeguarding national security interests and preserving an attractive investment climate for foreign investment.
