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French FDI regime: one step towards a new (extensive) reform?
French FDI regime: one step towards a new (extensive) reform?
2 June 2025
Series
Blogs
2 June 2025
Amidst increasing geopolitical tensions, the French National Assembly has taken the initiative to evaluate the French FDI regime and, on 22 May 2025, published a report setting out a number of recommendations and detailing a roadmap for the adoption of a reformed regime.
Proposals from the Public Policy Evaluation and Monitoring Committee
The report contains 22 proposals; we detail the key ones you should be aware of below.
The current French FDI regime captures transactions resulting in the acquisition of control, the acquisition of all or part of a business branch, and the crossing of certain thresholds (25% of voting rights, reduced to 10% in listed companies) in 24 sensitive sectors. The report suggests extending the regime to the following types of transactions:
Taking inspiration from other jurisdictions, the committee recommends introducing the payment of a filing fee proportional to the value of the transaction.
Again, drawing inspiration from other jurisdictions, particularly Germany and the United Kingdom, the report suggests putting in place an adjustable and progressive control mechanism, with criteria varying by asset sensitivity, with stricter levels of control for the most sensitive sectors. This “sliding scale” mechanism would notably include a lowered threshold in ultra-strategic sectors (i.e. arms manufacturing, cryptology activities and infrastructure essential to national defence).
While France publishes statistical data on FDI decisions, the absence of clear, detailed reports (such as anonymised case studies) creates challenges for investors seeking to align with the regulatory framework. To address this gap, the report notably proposes:
By way of background, as reported in an earlier blog post, the existing EU screening mechanism is currently being revised, notably to extend its scope of control to new sectors (i.e. media, critical raw materials and transport) and to harmonise the foreign investment screening regimes across the Member States.
This initiative of the French National Assembly signals the same effort to strengthen the FDI screening regime and parliamentary oversight in France. The conclusion of this report will be shared with the French Government, which is required to respond within three months (i.e. by the end of August). Following this, a debate is expected to be scheduled before Parliament to assess the opportunity to introduce new legislation to implement these recommendations. We will continue to report on developments in relation to the French FDI regime via this blog!