3 January 2019

Strengthening control of foreign investments in sensitive companies

France has just enacted a decree increasing the list of sectors concerned by control of foreign investments in companies.

Investments made in France by foreign investors and raising issues in terms of public order and security or of national defence require the Minister of Economy and Finance’s prior authorisation, in exception to the general principle of free movement of capital.

In order to adapt the French system to contemporary challenges that certain foreign investments may represent, the list of sectors concerned by control of foreign investments has been modified by a decree bearing on foreign investments submitted to prior authorisation, published on 1 December 2018.

Henceforth, companies in the aerospace and civil protection sectors or which carry out research and development activities in the fields of cybersecurity, artificial intelligence, robotics, additive manufacturing or semiconductors, as well as hosting providers for certain sensitive data, will be included in such control. The new provisions, which came into force on 1 January 2019, are in compliance with the guidelines contained in the draft regulations on screening of foreign direct investments in the European Union, which are about to be definitively adopted and which France has strongly supported in the Council.

Such regulatory reinforcement is in no way detrimental to the French economy’s attractiveness in the eyes of foreign investors. It includes a component designed to simplify matters: up until now, the foreign investor alone could request authorisation from the administration. Henceforth, however, companies targeted by investment projects may also request prior authorisation.


"With this legislation, our companies involved in Research & Development activities in certain sectors developing technologies for the future, and which raise genuine concerns with regard to defence or public security, will be better protected against hostile acquisitions. We are determined to implement strong measures when investors do not comply with our rules: this is the purpose of the PACTE Bill’s provisions, which I shall be arguing in favour of at the Senate once again in mid-January".
Bruno Le Maire, Minister of Economy and Finance


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