The U.S. Department of the Treasury is proposing expanded restrictions on American investments in certain foreign technology companies, potentially affecting venture capital firms, investment managers, businesses, and other U.S. investors involved in sensitive technology sectors.
The proposed regulations, published in the Federal Register on October 26, 2026, would require U.S. investors to report certain transactions involving foreign companies developing designated technologies while prohibiting other investments considered a significant national security risk.
The changes would expand the existing Outbound Investment Security Program (OISP), which currently restricts certain investments involving China, Hong Kong, and Macau.
Importantly, the proposed restrictions are not yet final, and they would not prohibit Americans from making ordinary investments in all foreign technology companies.
Why Treasury Wants to Expand Investment Restrictions
The proposal implements the Comprehensive Outbound Investment National Security Act, also known as the COINS Act, which Congress enacted as part of the fiscal year 2026 National Defense Authorization Act.
The legislation establishes a framework intended to prevent certain U.S. investments from supporting foreign development of technologies that could strengthen military, intelligence, surveillance, or cyber capabilities.
According to the Treasury Department’s October 22 announcement, the regulations would strengthen an existing investment security program first established under Executive Order 14105 in August 2023.
The current program, which took effect January 2, 2025, already regulates certain transactions involving semiconductors, microelectronics, artificial intelligence, and quantum information technologies.
The new proposal would broaden that framework to address additional countries and emerging technologies.
Which Countries and Technologies Would Be Affected?
Under the proposed regulations, restrictions would extend beyond China, Hong Kong, and Macau to include Russia, Iran, Cuba, North Korea, and Venezuela under the Maduro regime.
The expanded framework would address specified activities involving several sensitive technology sectors, including:
- Semiconductors and microelectronics
- Artificial intelligence systems
- Quantum information technologies
- High-performance computing and supercomputing
- Hypersonic systems
- Certain biotechnology applications
Treasury would distinguish between technologies requiring transaction notifications and those subject to investment prohibitions.
For example, an investment involving a covered foreign company developing certain advanced computing capabilities could require notification or be prohibited, depending on the technology, transaction structure, and applicable regulatory definitions.
However, the restrictions would not automatically apply to every technology company operating in the listed countries.
What U.S. Investors May Be Required to Do
The proposal establishes two primary requirements for transactions falling within its scope.
First, U.S. persons involved in certain covered transactions would have to notify the Treasury Department and provide information about the investment.
Second, transactions involving designated prohibited technologies would be barred entirely.
The requirements could affect certain venture capital investments, acquisitions of equity interests, joint ventures, limited partner investments, and other covered financial arrangements.
However, the proposal also identifies exceptions for certain transactions, including qualifying publicly traded securities, investment funds, and other excluded activities.
This distinction matters for individual investors because purchasing shares of a publicly traded technology company is not necessarily treated the same as directly financing a covered foreign technology business.
Investors would need to evaluate the specific transaction and applicable exceptions rather than assuming every foreign investment is restricted.
New Compliance Requirements Could Affect Investment Decisions
The proposed rules could create additional compliance responsibilities for American businesses and financial institutions involved in international technology investments.
Before completing a covered transaction, investors may need to determine whether the foreign company operates in a restricted sector, whether the investment requires notification, and whether any exceptions apply.
Treasury’s proposal also outlines expectations for reasonable due diligence and potential penalties for violations.
For investment firms managing international portfolios, these requirements could influence transaction planning, legal expenses, and the evaluation of future investment opportunities.
The agency reports receiving approximately 100 notifications under the existing program since its implementation, providing a starting point for assessing the potential scope of the expanded regulations.
Public Comments Are Open Through December 7
The Treasury Department is accepting public comments on the proposed regulations through December 7, 2026.
Investors, businesses, financial advisers, and other interested parties can review the proposal and submit comments through Regulations.gov under docket number TREAS-DO-2026-0595.
Written comments may also be mailed to the Department of the Treasury, Office of Investment Security, 1500 Pennsylvania Avenue NW, Washington, DC 20220.
Treasury cautions that submitted comments, including identifying information provided by commenters, may become publicly available.
After reviewing feedback, the department may revise the proposal before issuing final implementing regulations.
For now, investors considering transactions involving foreign companies developing sensitive technologies should review the existing requirements and monitor the proposed changes rather than assuming the new rules have already taken effect.
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Amanda Blankenship is the Chief Editor for District Media. With a BA in journalism from Wingate University, she frequently writes for a handful of websites and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, son, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.
