U.S. businesses have historically been protected from Foreign Direct Investment (FDI) by the Committee on Foreign Investment in the United States (CFIUS). These protections were later expanded to include critical technologies, infrastructure and/or data — including real estate located near controlled airports, maritime ports, military installations, critical infrastructure, and more recently to agricultural real estate. Alabama, and other states, have similar laws preventing or requiring reporting of foreign ownership of real estate.
Notably, all historic U.S. regulation focused on in-bound foreign investment into the U.S. This changed in 2025 to include investments by U.S. businesses made abroad. This change has significant repercussions for all Alabama business who are looking to expand outside the U.S., or Alabama investors looking to invest outside the U.S.
The Outbound Investment National Security Act of 2025 (COINS Act), effective January 2, 2026, regulates U.S. investment in controlled activities, technologies and industries with a nexus to a foreign “country of concern.”
The COINS Act applies to investments involving semiconductors, microelectronics, artificial intelligence, quantum computing, supercomputing and hypersonic technologies, and provides U.S. Department of the Treasury (Treasury) the authority to add technologies that enable the “capabilities of a country of concern.” The COINS Act also covers transactions where a U.S. person is “knowingly directing” a foreign person’s transaction that would otherwise be notifiable or prohibited or if undertaken by a U.S. business (i.e. investment bankers or brokers).
The COINS Act provides a few limited “exceptions” to otherwise “covered transactions” including investments:
- Determined to be “de minimis” or “in the national interest” of the U.S.
- Involving certain publicly traded securities.
- By passive limited partners, investment funds or pooled investment vehicles.
- Acquiring the “totality of the interest” by a U.S. person.
- Certain intra-company transfers.
Consistent with other existing U.S. trade regulations, the COINS Act defines “countries of concern” to be China (Hong Kong and Macau), Cuba, Iran, North Korea, Russia and Venezuela.
The Treasury is tasked with implementing specific regulations, including a process for public feedback and a process to provide agency advice on whether an investment would be a “covered transaction.” Treasury also will establish enforcement regulations to pursue violations of the COINS Act.
Alabama businesses are now required to determine whether a prospective investment outside the U.S. would be a “covered transaction” requiring notification and/or approval under the COINS Act. As a result, any investment involving an out-bound investment by an Alabama business should be carefully assessed for compliance under the COINS Act.
It should be noted that most U.S. trading partners have similar foreign direct investments regulations. Alabama businesses engaged in cross border transactions — including foreign direct investment — should assure compliance around the globe by early diligence to identify required disclosures and filings.
For over three decades, David Vance Lucas has applied his legal, technological and operational experience to craft strategic advice on intellectual property, international trade and complex litigation matters — throughout the U.S., U.K. and Europe. He accumulated much of this experience while serving as general counsel for a global technology company and a clinical laboratory software company. Lucas utilizes this experience and legal acumen to advise C-suites and boards of directors (public and private) on legal, compliance and operational issues as a member of Womble Bond Dickinson’s Global Defense and Security Solutions Team in the U.S.
