France strengthens foreign investment controls on strategically sensitive activities

France is tightening its oversight of foreign investments in sectors deemed strategically sensitive, aiming to protect its national interests in a competitive global landscape. The Ministry of Economy and Finance announced that foreign investors will now need to seek authorization from the Minister of Economy for certain acquisitions.

The new regulation, published in the Official Journal, specifically targets non-European Union investors acquiring 10% or more of shares in French companies listed on regulated markets. Previously, the threshold for such authorization was 25%. This move brings France's national policy in line with European Union regulations that have been in effect since 2021.

While the measure applies regardless of the regulated market's country, its practical impact is expected to be limited, affecting only a small number of companies. The government's intention is to prevent foreign entities from gaining undue influence over critical French industries, reflecting a broader global trend of increased scrutiny over foreign direct investment in sensitive areas.

This enhanced control signifies France's commitment to safeguarding its economic sovereignty and technological capabilities. By lowering the acquisition threshold, the government aims to maintain a stronger position in managing foreign participation in key French businesses, ensuring that national security and economic stability are prioritized.