Vifo in Dutch Tech Acquisitions: What Should Be Covered in the LOI and SPA?

Why foreign buyers should treat Vifo as a deal-planning issue

Dutch investment screening under the Vifo Act is becoming more relevant for technology transactions. Foreign buyers, strategic investors and international funds acquiring or investing in Dutch companies should not treat Vifo as a late-stage regulatory check. It can affect the transaction structure, due diligence process, signing conditions, closing timetable, long-stop date, information access and termination rights.

This is especially important for Dutch companies active in AI, biotechnology, advanced materials, nanotechnology, sensor and navigation technology and other sensitive technology areas. From 2027, the scope of Dutch investment screening is expected to become broader for several technology categories.

For international deal teams, the practical question is not only whether a filing is required. The more important question is how the risk is handled in the LOI, term sheet, SPA or investment agreement.

This article explains how foreign buyers and investors should reflect Vifo screening in Dutch technology transactions.

This insight is part of the ViottaLaw series on Dutch M&A deal practice, Vifo screening and foreign investments in Dutch acquisitions, Dutch VC terms and Dutch BV structures and investing in and through the Netherlands.

When can Vifo be relevant in a Dutch transaction?

Vifo screening may be relevant where a transaction gives a buyer or investor control or significant influence over a Dutch company active in vital processes, sensitive technology or certain other strategic activities.

In Dutch tech transactions, the most important issue is often sensitive technology. A target may be relevant because of its technical capabilities, IP, data, customers, public-sector links, dual-use potential or role in a strategic supply chain.

This is not limited to full acquisitions. Minority investments, VC rounds, joint ventures, internal restructurings and transactions involving governance rights may also require analysis.

Foreign investors should therefore assess Vifo implications before the term sheet is finalised. A minority investment with board rights, veto rights or access to sensitive technical information can raise different issues from a passive financial investment.

Start with the technology profile of the Dutch target

The Vifo analysis should start with the actual business of the target. A general description such as “AI company”, “biotech platform” or “sensor business” is not enough.

Deal teams should look at what the technology does, how it is used, who the customers are, whether the company holds strategic IP, whether the technology has dual-use applications and whether sensitive data or infrastructure is involved.

For foreign buyers, this is important because the Dutch analysis may be more specific than the commercial label used in investor materials. A company may market itself as a software company, but the underlying application may still raise investment-screening questions.

What should be covered in the LOI or term sheet?

If Vifo may be relevant, the LOI or term sheet should address it expressly.

At a minimum, the document should state who is responsible for the filing analysis, what information the target must provide, whether the transaction is conditional on clearance and how the parties will cooperate if a notification is required.

The LOI should also deal with timing. A seller should not grant lengthy exclusivity without understanding whether the buyer’s regulatory position may delay or prevent closing. A buyer should not accept an unconditional closing timetable if screening may be required.

The purpose of the LOI is not to include the full regulatory clause. The purpose is to avoid false certainty at the start of the process.

Vifo as a condition precedent

Where a filing is required, the SPA or investment agreement should include a Vifo condition precedent. Closing should not take place until clearance has been obtained or the relevant review period has passed.

The drafting should specify what counts as clearance. Is unconditional approval required? Is approval subject to conditions acceptable? Who decides whether conditions imposed by the authorities are commercially acceptable?

This is important because conditions may affect governance, information access, technology control, data, operational autonomy or future integration. A buyer may be willing to accept limited procedural obligations, but not conditions that undermine the deal rationale.

Cooperation covenant and information obligations

A Vifo filing requires information from both sides. The Dutch target may need to provide details about its activities, technology, customers, contracts, IP, ownership structure and governance. The buyer or investor may need to provide information about its group, ownership, ultimate beneficial owners, business activities and strategic intentions.

The SPA should therefore include a cooperation covenant. Parties should agree to provide information promptly, coordinate filings, respond to questions and consult on communications with the authorities.

The agreement should also address confidentiality. Sensitive technical information should not be shared more widely than necessary, especially if the buyer is not yet cleared and closing may not occur.

Long-stop date and termination rights

Vifo screening can affect the deal timetable. The long-stop date should be realistic and should reflect the expected review process.

If the long-stop date is too short, the deal may fail even though clearance could have been obtained with more time. If it is too long, the seller may be locked into a transaction for an unacceptable period.

The SPA should also determine what happens if clearance is refused, if clearance is delayed or if clearance is granted subject to burdensome conditions. The termination rights should be clear. Otherwise, parties may end up disputing whether the buyer is still obliged to close.

Seller disclosure and warranties

For sellers and founders, Vifo is also a disclosure issue.

If the target operates in a sensitive technology field, the buyer needs accurate information before signing. The SPA may include warranties on activities, technology, customers, public-sector contracts, export control, subsidies, data, IP and prior regulatory filings.

At the same time, sellers should avoid giving absolute warranties on legal qualification where the authority’s assessment remains uncertain. A more workable approach is to warrant that the information provided for the Vifo analysis is complete and accurate.

Information control during due diligence

In sensitive technology transactions, due diligence itself requires care.

Foreign buyers may request source code, technical documentation, customer data, security architecture, strategic roadmaps or other sensitive information. If the deal may be subject to Vifo screening, access to such information should be controlled through the NDA, data room protocol and clean-team arrangements where appropriate.

This protects the target and avoids unnecessary risk if the transaction does not close.

Conclusion

Vifo screening should be addressed early in Dutch technology transactions. For foreign buyers and investors, the key is to translate the regulatory analysis into the transaction documents.

The LOI should identify the issue and allocate process responsibility. The SPA should deal with conditions precedent, cooperation, long-stop dates, treatment of conditions, disclosure, warranties and termination rights.

In Dutch tech M&A, Vifo is not a closing formality. It is part of deal structuring.

FAQ

Is Vifo only relevant for foreign buyers?

No. Foreign ownership is relevant, but the analysis also depends on the target’s activities, the rights acquired and the potential national-security impact.

Can a minority investment require Vifo analysis?

Yes. A minority investment may be relevant if the investor obtains significant influence, governance rights or access to sensitive information.

Should Vifo be included in the LOI?

Yes, if there is a realistic chance that screening may be required. The LOI should address responsibility, timing and clearance risk.

What should the SPA include?

The SPA should include a clearance condition, cooperation covenant, long-stop date, information obligations, treatment of conditions and termination rights.

Can Vifo affect due diligence?

Yes. Access to sensitive technical information should be controlled before closing, especially where the buyer is not yet cleared.

About Dirk de Waard

Dirk de Waard is a Dutch corporate and M&A lawyer and partner at Venture Lawyers in Amsterdam. He advises foreign buyers, investors, founders and scale-ups on Dutch technology transactions, Vifo screening, investment documentation, SPAs, governance rights and Dutch BV implementation.

Planning a Dutch tech acquisition or investment?

Vifo screening can affect timing, information access, closing certainty and transaction structure. In Dutch technology transactions, the issue should be addressed before signing, not shortly before closing.

Dirk de Waard advises foreign buyers, investors and Dutch technology companies on Vifo-sensitive transactions. Contact Dirk at dirk.dewaard@viottalaw.com to discuss the Dutch legal implementation of a proposed tech acquisition or investment.