What acquirers should know about the National Security & Investment Act

If you're considering acquiring a UK business, there's one piece of legislation you can't afford to overlook — the National Security and Investment Act (NSIA). This gives the Government broad powers to scrutinise — and potentially intervene in — transactions that could pose a risk to national security.

Here, Emma Thomas explores what the NSIA means for investors, when to notify and why understanding control is key.

What is the NSIA?

The NSIA is designed to protect the UK’s national security by allowing the Government to review acquisitions of entities and assets that may be sensitive. This includes not only foreign investments but also domestic transactions. The NSIA applies to a wide range of sectors, from defence and energy to artificial intelligence and communications.

When do you need to notify?

There are two types of notifications under the NSIA:

• Mandatory notifications — if your deal involves one of 17 defined sensitive sectors and meets certain control thresholds, you must notify the Government before completing the transaction.
• Voluntary notifications — if your deal falls outside those sectors but could still raise national security concerns, you can notify voluntarily to avoid the risk of a post-completion call-in.

The Government can also retrospectively review transactions that were not notified, so it’s wise to err on the side of caution.

What triggers a notification?

The NSIA focuses on control. 

You may need to notify if your acquisition results in:

• Crossing key thresholds of shareholding or voting rights (e.g. 25%, 50% or 75%).
• Gaining material influence over the target’s policy.
• Acquiring the ability to block or pass resolutions.

It’s not just about ownership — it’s about influence and access.

What happens after you notify?

Once a notification is submitted, the Government has 30 working days  from the date of acknowledgement to decide whether to call in the transaction for a full national security assessment. If called in, the review period can extend by another 30 working days, with a possible 45-day extension.

From our experience, responses tend to be received in the last few days of the period and there’s no mechanism to accelerate the process.

During this time, the transaction must not complete so it’s essential to factor this into your deal timeline.

Practical tips for acquirers

• Understand the sectors — familiarise yourself with the 17 sensitive sectors and assess whether your deal falls within scope.
• Assess control — consider whether your acquisition gives you influence that could trigger notification requirements.
• Prepare early — the notification process is detailed and requires comprehensive information about the acquirer, the target and the transaction.
• Engage legal advisers — NSIA compliance should be integrated into your due diligence process from the outset.

Key findings in NSIA annual report 

The NSIA annual report for the year ended 31 March 2025 revealed the following:

• 1,143 notifications were received in the reporting period. 954 of these were mandatory notifications, 134 were voluntary notifications and 55 were retrospective validation applications.
• All reviewed notifications were either called in or cleared within the statutory period of 30 working days. On average, call-in decisions took 29 working days for both mandatory and voluntary notifications.
• 56 call-in notices were issued, seven of which related to non-notified transactions. 28 related to mandatory notifications. Most of the called-in transactions were associated with the following sectors:
  • Defence (36%).
  • Military and dual-use (29%).
  • Advanced materials (27%). 

• 48% of call-ins involved acquirers associated with the UK, 32% with China and 20% with the USA.

   

Managing risk under the NSIA framework

The NSIA isn’t intended to block investment but to ensure that national security risks are properly managed. Most transactions proceed without issue, but failing to comply can result in significant delays, fines or even the unwinding of a deal.

If you're planning an acquisition in the UK, make sure that the NSIA is on your radar and build it into your planning from day one.

Talk to us

Our team of expert corporate lawyers can help you assess how the NSIA may affect your transaction. As the only UK law firm with dedicated deal advisors, we offer integrated legal and financial insight to support informed decision-making and help you structure deals that align with both commercial goals and regulatory requirements.

Talk to us by calling 0333 004 4488, emailing hello@brabners.com or completing our contact form below.