Legal analysis
Strengthening control of foreign investments in France
27 January 2020

By decision and decree of 31 December 2019, published in the Official Journal of the French Republic on 1 January 2020, the French government strengthened the control system of foreign investments in France coming into force on 1 April 2020.

Below, a short update on the main changes brought about by this regulatory reinforcement as part of the Loi PACTE (The French Action Plan for Business Growth and Transformation). If you have any questions, please contact Jens Foerderer or Mathias Schmid:

  • certain articles of the French Monetary and Financial Code (CMF) have been rewritten to make the rules governing the control process clearer and simpler to understand;
  • the minimum threshold for the participation of an investor from a non-EU country in an entity governed by French law is lowered to 25%, compared to the previous threshold of 33%;
  • the control  carried out by the French authorities is extended, in line with the European standards, to the investment projects concerning new activity sectors, such as food safety, online and print media services related to political and general information and activities relating to critical technologies, such as quantum technologies and energy storage;
  • the control process will focus on a single list of activities regardless of the category of investors, whereas previously the scope of inspected activities varied on the basis of the nationality and/or domicile of the investors;
  • the list of the documentation to be provided in support of the request for prior authorization becomes more exhaustive and complete including, in particular, the proof of any connection of the investor with a government of a non-EU country over the last five years, any participation of the company, targeted by the investment, in projects which are meaningful for the interests of the European Union, the list of French and foreign competitors of the investor and of the company in question;
  • the documentation to be provided for a ruling (“avis”) is now clearly defined and – most importantly – less comprehensive than for a genuine authorization request;
  • the Minister of Economy and Finance responsible for the control of the investment projects has to analyze the requests for prior authorization within 30 days, with the possibility of carrying out an additional examination within 45 days;
  • in case of no-reply within the above mentioned time limits, the request will be deemed to be rejected;
  • concerning the penalty system, in the event of investments affecting “public order or national defense […]“, the Minister of Economy and Finance may obtain the submission of a request for authorization, the modification of the operation or the reestablishment of the previous situation, with the authority to make decisions subject to a penalty payment (maximum amount = 50.000 euros per day); he may also take additional measures and appoint an agent to ensure that national interests are respected, if he deems necessary to intervene in order to prevent any risk of public order violation.

A stricter and more detailed regulation system aimed at guaranteeing the safeguarding of national security while encouraging long-term and constructive investments in France.

Click here to consult the decision and the decree of 31 December 2019:


Jens Förderer Partner

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