diff --git a/networking/filtering-proxy/README.md b/networking/filtering-proxy/README.md
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+# Network filtering with Squid
+
+This example shows how to deploy a filtering HTTP proxy to restrict Internet access. Here we show one way to do this using a VPC with two subnets:
+
+- The first subnet (called "apps" in this example) hosts the VMs that will have their Internet access tightly controlled a non-caching filtering forward proxy.
+- The second subnet (called "proxy" in this example) hosts a Cloud NAT instance and a Squid Server [Squid](http://www.squid-cache.org/).
+
+The VPC is a Shared VPC and all the service projects will be located under a folder enforcing the `compute.vmExternalIpAccess` (organization policies)[https://cloud.google.com/resource-manager/docs/organization-policy/org-policy-constraints]. This prevents the service projects from having external IPs thus forcing all outbound Internet connections through the proxy.
+
+To allow Internet connectivity to the proxy subnet, a Cloud NAT instance is configured to allow usage from (that subnet only)[https://cloud.google.com/nat/docs/using-nat#specify_subnet_ranges_for_nat]. All other subnets are not allowed to use the Cloud NAT instance.
+
+To simplify the usage of the proxy, a Cloud DNS private zone is created and the IP address of the proxy is exposed with the FQDN `proxy.internal`.
+
+You can optionally deploy the Squid server as (Managed Instance Group)[https://cloud.google.com/compute/docs/instance-groups] by setting the `mig` option to `true`. This option defaults to `false` which results in a standalone VM.
+
+![High-level diagram](squid.png "High-level diagram")
diff --git a/networking/filtering-proxy/main.tf b/networking/filtering-proxy/main.tf
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+locals {
+  squid_address = (
+    var.mig
+    ? module.squid-ilb.0.forwarding_rule_address
+    : module.squid-vm.internal_ips.0
+  )
+}
+
+###############################################################################
+#                               Top level folder                              #
+###############################################################################
+
+module "folder-netops" {
+  source = "../../modules/folder"
+  parent = var.root_node
+  name   = "netops"
+}
+
+###############################################################################
+#                    Host project and shared VPC resources                    #
+###############################################################################
+
+module "project-host" {
+  source          = "../../modules/project"
+  billing_account = var.billing_account
+  name            = "host"
+  parent          = module.folder-netops.id
+  prefix          = var.prefix
+  services = [
+    "compute.googleapis.com",
+    "dns.googleapis.com",
+    "logging.googleapis.com"
+  ]
+  shared_vpc_host_config = {
+    enabled          = true
+    service_projects = []
+  }
+}
+
+module "vpc" {
+  source     = "../../modules/net-vpc"
+  project_id = module.project-host.project_id
+  name       = "vpc"
+  subnets = [
+    {
+      name               = "apps"
+      ip_cidr_range      = var.cidrs.apps
+      region             = var.region
+      secondary_ip_range = null
+    },
+    {
+      name               = "proxy"
+      ip_cidr_range      = var.cidrs.proxy
+      region             = var.region
+      secondary_ip_range = null
+    }
+  ]
+}
+
+module "firewall" {
+  source     = "../../modules/net-vpc-firewall"
+  project_id = module.project-host.project_id
+  network    = module.vpc.name
+  custom_rules = {
+    allow-ingress-squid = {
+      description          = "Allow squid ingress traffic"
+      direction            = "INGRESS"
+      action               = "allow"
+      sources              = []
+      ranges               = [var.cidrs.apps, "35.191.0.0/16", "130.211.0.0/22"]
+      targets              = [module.service-account-squid.email]
+      use_service_accounts = true
+      rules                = [{ protocol = "tcp", ports = [3128] }]
+      extra_attributes     = {}
+    }
+  }
+}
+
+module "nat" {
+  source                = "../../modules/net-cloudnat"
+  project_id            = module.project-host.project_id
+  region                = var.region
+  name                  = "default"
+  router_network        = module.vpc.name
+  config_source_subnets = "LIST_OF_SUBNETWORKS"
+  # 64512/11 = 5864 . 11 is the number of usable IPs in the proxy subnet
+  config_min_ports_per_vm = 5864
+  subnetworks = [
+    {
+      self_link            = module.vpc.subnet_self_links["${var.region}/proxy"]
+      config_source_ranges = ["ALL_IP_RANGES"]
+      secondary_ranges     = null
+    }
+  ]
+  logging_filter = var.nat_logging
+}
+
+module "service-account-squid" {
+  source     = "../../modules/iam-service-account"
+  project_id = module.project-host.project_id
+  name       = "svc-squid"
+  iam_project_roles = {
+    (module.project-host.project_id) = [
+      "roles/logging.logWriter",
+      "roles/monitoring.metricWriter",
+    ]
+  }
+}
+
+module "cos-squid" {
+  source = "../../modules/cloud-config-container/squid"
+  allow = [
+    ".github.com",
+  ]
+  clients = [var.cidrs.apps]
+}
+
+module "squid-vm" {
+  source        = "../../modules/compute-vm"
+  project_id    = module.project-host.project_id
+  region        = var.region
+  name          = "squid-vm"
+  instance_type = "e2-medium"
+  network_interfaces = [{
+    network    = module.vpc.self_link
+    subnetwork = module.vpc.subnet_self_links["${var.region}/proxy"]
+    nat        = false
+    addresses  = null
+    alias_ips  = null
+  }]
+  boot_disk = {
+    image = "projects/cos-cloud/global/images/family/cos-stable"
+    type  = "pd-standard"
+    size  = 15
+  }
+  service_account        = module.service-account-squid.email
+  service_account_scopes = ["https://www.googleapis.com/auth/cloud-platform"]
+  use_instance_template  = var.mig
+  metadata = {
+    user-data = module.cos-squid.cloud_config
+  }
+}
+
+module "squid-mig" {
+  count       = var.mig ? 1 : 0
+  source      = "../../modules/compute-mig"
+  project_id  = module.project-host.project_id
+  location    = "${var.region}-b"
+  name        = "squid-mig"
+  target_size = 1
+  autoscaler_config = {
+    max_replicas                      = 10
+    min_replicas                      = 1
+    cooldown_period                   = 30
+    cpu_utilization_target            = 0.65
+    load_balancing_utilization_target = null
+    metric                            = null
+  }
+  default_version = {
+    instance_template = module.squid-vm.template.self_link
+    name              = "default"
+  }
+  health_check_config = {
+    type    = "tcp"
+    check   = { port = 3128 }
+    config  = {}
+    logging = true
+  }
+  auto_healing_policies = {
+    health_check      = module.squid-mig.0.health_check.self_link
+    initial_delay_sec = 60
+  }
+}
+
+module "squid-ilb" {
+  count         = var.mig ? 1 : 0
+  source        = "../../modules/net-ilb"
+  project_id    = module.project-host.project_id
+  region        = var.region
+  name          = "squid-ilb"
+  service_label = "squid-ilb"
+  network       = module.vpc.self_link
+  subnetwork    = module.vpc.subnet_self_links["${var.region}/proxy"]
+  ports         = [3128]
+  backends = [{
+    failover       = false
+    group          = module.squid-mig.0.group_manager.instance_group
+    balancing_mode = "CONNECTION"
+  }]
+  health_check_config = {
+    type    = "tcp"
+    check   = { port = 3128 }
+    config  = {}
+    logging = true
+  }
+}
+
+module "private-dns" {
+  source          = "../../modules/dns"
+  project_id      = module.project-host.project_id
+  type            = "private"
+  name            = "internal"
+  domain          = "internal."
+  client_networks = [module.vpc.self_link]
+  recordsets = [
+    {
+      name    = "squid"
+      type    = "A"
+      ttl     = 60
+      records = [local.squid_address]
+    }
+  ]
+}
+
+###############################################################################
+#                               Service project                               #
+###############################################################################
+
+module "folder-apps" {
+  source = "../../modules/folder"
+  parent = var.root_node
+  name   = "apps"
+  policy_list = {
+    # prevent VMs with public IPs in the apps folder
+    "constraints/compute.vmExternalIpAccess" = {
+      inherit_from_parent = false
+      suggested_value     = null
+      status              = false
+      values              = []
+    }
+  }
+}
+
+module "project-app" {
+  source          = "../../modules/project"
+  billing_account = var.billing_account
+  name            = "app"
+  parent          = module.folder-apps.id
+  prefix          = var.prefix
+  services        = ["compute.googleapis.com"]
+  shared_vpc_service_config = {
+    attach       = true
+    host_project = module.project-host.project_id
+  }
+}
diff --git a/networking/filtering-proxy/outputs.tf b/networking/filtering-proxy/outputs.tf
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+output "squid-address" {
+  value = local.squid_address
+}
diff --git a/networking/filtering-proxy/squid.png b/networking/filtering-proxy/squid.png
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diff --git a/networking/filtering-proxy/variables.tf b/networking/filtering-proxy/variables.tf
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+variable "billing_account" {
+  description = "Billing account id used as default for new projects."
+  type        = string
+}
+
+variable "prefix" {
+  description = "Prefix used for resources that need unique names."
+  type        = string
+}
+
+variable "root_node" {
+  description = "Root node for the new hierarchy, either 'organizations/org_id' or 'folders/folder_id'."
+  type        = string
+}
+
+variable "region" {
+  description = "Default region for resources"
+  type        = string
+}
+
+variable "cidrs" {
+  description = "CIDR ranges for subnets"
+  type        = map(string)
+  default = {
+    apps  = "10.0.0.0/24"
+    proxy = "10.0.1.0/28"
+  }
+}
+
+variable "nat_logging" {
+  description = "Enables Cloud NAT logging if not null, value is one of 'ERRORS_ONLY', 'TRANSLATIONS_ONLY', 'ALL'."
+  type        = string
+  default     = "ERRORS_ONLY"
+}
+
+variable "mig" {
+  description = "Enables the creation of an autoscaling managed instance group of squid instances."
+  type        = bool
+  default     = false
+}