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On 31 December 2019, the French government adopted Decree 2019-1590 and a related order (arrêté) which significantly reinforce the French Foreign Investment Regulations (“FIR“).

The changes which they introduce to the FIR regime (i) broaden the scope of foreign investments covered by the FIR, (ii) change the timeline for obtaining a prior authorization from the French Ministry of Economy (“MoE“), and (iii) substantially increase the list of information and documentation to be filed with a prior authorization application.

The changes will apply to requests for prior authorizations filed as of 1 April 2020. The key changes introduced include those as follows.

Increased scope of investments falling within the FIR

The current FIR regime requires the prior authorization of the MoE for investments in a sector deemed “sensitive” by the French FIR, where the proposed investment involves (i) the acquisition of indirect or direct control of a French company or business of a French company to the benefit of an EU or non-EU investor, or (ii) the crossing by a non-EU investor of a 33.33% threshold of direct or indirect holding of the share capital or voting rights of a French company.

Under the new regime, the definition of “foreign investor” has been amended, resulting in the widening of the scope of investments caught by the FIR. The 33.33% threshold for investments by non-EU investors will be lowered to 25% and apply to the acquisitions of voting rights only (share capital is not concerned anymore) for the investors acting alone or jointly (de concert).

In addition, the list of sectors deemed sensitive by the FIR will be extended notably to agricultural and food products which contribute to national food security objectives, the press, critical technologies, i.e. cybersecurity, AI, robots, additive manufacturing, semi-conductors, quantic technologies and energy storage in accordance with the EU foreign investment screening regulation that entered into force on 10 April 2019.

Changes in the process and timing for obtaining a prior authorization

Currently, where a prior authorization is required, the foreign investor must obtain an authorization from the MoE before the completion of its proposed investment by filing a request for authorization to the MoE. The MoE then has two months to provide its position, being a refusal, unconditional authorization or authorization subject to conditions. If the MoE does not provide its position within this two-month period, it is deemed an unconditional authorization.

Under the new regime, the process will involve two phases:

  1. an initial phase of up to 30 business days from the receipt by the MoE of the authorization request, during which time the MoE will provide its position on whether the proposed investment is (i) out of scope of the FIR, (ii) in scope and unconditionally authorized or (iii) in scope and requires further analysis to determine under what conditions it could be authorized;
  2. if during the initial phase the MoE determines that it requires further analysis to ensure that the preservation of national interests may be guaranteed by granting an authorization under condition(s), it will have a further period of up to 45 business days to provide its position.

Reversing the position under the current regime, if the MoE does not provide its position on the expiry of either phase, the prior authorization request will be deemed refused.

Information and documents required for prior authorization request

Currently, the prior authorization request must contain certain information regarding (i) the investor and its group, (ii) the target company or business and (iii) the investment itself. The new regime significantly extends the scope of information and documents requested for each of these categories, including as follows.

Regarding the investor:

  • Identification of all entities or individuals involved in the investment decision.
  • Detailed personal information on the managers of the investor and its group.
  • Information regarding the activities performed by the investor and its group, the markets in which it operates and its competitors.
  • Description of any financial support from a non-EU state or public authority for the last five years.

Regarding the target company or business:

  • Involvement in projects or programs presenting an interest of the EU (per the EU foreign investment screening regulation) as well as any financial support received from the EU.
  • If the target is a business, list of the assets comprising the business.
  • List of all French clients, all markets in which it operates, French and non-French competitors.

Regarding the investment:

  • Documents demonstrating a “sufficiently advanced” investment project, though the FIR does not define this. Until further guidelines are available, the investor may need to provide the relevant letter of intent, offer or draft purchase/investment agreement.
  • Amount of the investment involving France but also the amount for the global transaction as the case may be (or if not available, estimates/determination methods).
  • Rationale of the investment for the investor in the framework of its global strategy.
  • List of states in which the operation has been or will be notified under foreign investment or antitrust regulations.

The new regime provides for a substantially similar list of information and documents to be provided for where there is doubt as to whether or not the completion of the investment requires a prior authorization, and the French target itself or the investor may file a request for prior ruling from the MoE.

There are no further guidelines on the application of the new regime. However, there are upcoming Q&A sessions with the MoE scheduled to provide more insight into the practicalities of the new regime.


Stéphane Davin practices in the areas of private equity, as well as mergers and acquisitions. He joined Baker McKenzie in 1995, and was made partner in July 2008. Mr. Davin participated in the Firm’s Associate Training Program, where he handled cross-border transactions for the Chicago office’s Corporate and Securities Department.


Guillaume Nataf advises domestic and foreign clients on sales and acquisitions of French or foreign companies or groups and on domestic, cross-border or multijurisdictional transactions. He also focuses on the negotiation and implementation of joint ventures involving the creation of corporate entities, the drafting and negotiating of shareholders’ agreements and corporate law matters, including group restructurings and private equity projects. Mr. Nataf joined the Mergers and Acquisitions department of Baker McKenzie in Paris in 2005. He was appointed counsel in 2015 and partner in 2017.