France tightens foreign investment rules for non-EU listed companies in sensitive sectors

PARIS — The French government will need to green light attempts by non-European investors to acquire more than 10 percent of shares in French companies “operating in a sensitive sector” and listed on a stock market outside the EU, Prime Minister Sébastien Lecornu said.

“Against a backdrop of heightened geopolitical tensions, we are strengthening oversight of foreign investments in sensitive sectors,” the French leader wrote on X on Sunday. “Our responsibility is twofold: to support the growth of French businesses while safeguarding our strategic interests.”

The threshold will apply to government-designated sectors including defense, critical infrastructure and key technologies.

Earlier this year, Lecornu asked three parliamentarians from his center-right coalition to report on France’s economic security. Obtained by POLITICO, the document called for a “radical change in posture” and urged the government to take “a holistic approach” to protecting strategic assets, securing critical supply chains, reducing dependencies and strengthening technological sovereignty.

In a press release on the threshold change, Lecornu’s office said the government would give its response on any proposed foreign investments within 10 days of notification to “avoid placing an undue burden on companies’ ability to raise capital in financial markets.”

The move is intended to “guard against opportunistic acquisitions by non-EU investors in French companies listed outside the EU that could pose risks to national security,” the statement noted.

France had previously set up a screening process for planned acquisitions of over 10 percent of shares in French companies listed on European markets during Covid-19, with the stated aim of “protecting strategic companies” in a time of crisis. The measure was later made permanent and is now being extended to French companies listed outside the EU.

The new rules will come into effect in the coming days.

Other EU countries, such as Germany and Spain, have similar foreign investment screening regimes that apply a 10 percent threshold to acquisitions in certain strategic sectors.