UK Government ministers have tightened the scope of investments that will fall within the proposed new foreign takeover legislation.

The National Security and Investment Bill, in its current form, is going through the House of Lords and will allow the government to have an overview of UK company purchases, shareholdings or intellectual property in 17 sensitive industries in the interests of national security. 

If non-UK based companies fail to alert the government about a proposed transaction within the industry, the business could face fines of up to 5% of its annual turnover, or the directors may receive personal fines of up to £10million.        

Even with the new scope, the bill's proposed changes have faced scrutiny from the tech industry, fearing it will scare off early-stage investment in progressive industries such as artificial intelligence or robotics. The former being of particular contention given the prevalence of machine learning in software and industry application businesses.

The tightening of the scope of investment still shows a dramatic rise in potential government transaction scrutiny. It's anticipated that up to 1,800 transactions annually could face this scrutiny, a large increase from the 12 government interventions on national security grounds since 2002.   

Businesses should be aware of the proposed legislation and any further amendments to the scope of industries where notification is needed. The bill is due to receive royal assent this summer.