The already greater pace of security reviews ahead of the new legislation reflects growing concerns worldwide about who owns vital technology, perhaps making the arrival of the stricter regime well timed. 

But the concern is that the breadth of deals set to be affected will dampen appetite for investment in Britain and leave companies such as tech start-ups, which are currently enjoying record levels of foreign funding, facing difficulty in raising capital.

The NSIA will apply scrutiny to any deal that grants an investor a stake of 25pc or more in a company involved in one of 17 “sensitive areas of the economy”. That applies whether the deal is a takeover or a funding round, and is blind to where the investor is based. 

UK-headquartered investors will be scrutinised just as Chinese or American ones are, although their nationality, as well as any government backing, will be considered. That separates it from foreign investment checks such as America’s CFIUS, which exempts domestic investors and those from friendly states, such as the UK.

There is also no threshold on a company’s revenue, unlike the current legislation or the European takeover regime.

And while some categories of companies being considered under the act are typical fare, such as nuclear energy, space and transport, others are considered by critics as too broad – artificial intelligence, in particular.

“We’re going from a lightning strikes type approach where you’ve got to be pretty unlucky, statistically, to get an intervention notice from the Government, to a system where the Government wants to know about pretty much everything that’s going on in the economy,” says Nicole Kar, head of antitrust and foreign investment at law firm Linklaters.

Not notifying the Government about a deal will incur severe penalties: up to five years imprisonment for individuals, or fines of up to 5pc of global turnover for companies. According to Kar, this will cause a tidal wave of “prophylactic filings… because of the consequences of getting it wrong”.

Whitehall has insisted the burden of national security reviews will be limited, taking a maximum of 30 days – much quicker than the current regime, in some cases – due to a new Investment Screening Unit. It estimates that of the 1,000 to 1,800 deals a year that will have to be notified, only around 95 will be called in for a full review.

As well as concerns over the true number that will be scrutinised, tech investors say the worry is not that deals will be blocked but that bureaucracy will slow down those typically done quickly. 

“There’s going to be a bureaucracy and time and effort issue, and I think that will particularly affect venture capital,” Kar says.

Ministers have responded to businesses’ concerns, raising the ownership threshold at which a deal must be reported to the Government from 15pc to 25pc – a level that will catch far fewer venture capital investments. 

They have also narrowed the scope of the rules, by tightening up the definition of sectors affected, although critics maintain it is overly broad. A definition of what constitutes national security has been left vague, some say purposefully.

Meanwhile, ahead of the act coming into effect, business minister Lord Callanan wrote in an open letter to companies and investors: “I want to reassure you that the vast majority of acquisitions will be unaffected by these powers. We know that only a small minority of acquisitions pose a potential risk to the UK.”

He added that while most investors have purely business interests, “it is an unavoidable truth that a handful want to do us harm”. 

Protecting security will always trump investment, but it may come at a cost.