France Lowers Foreign Investment Threshold for Critical Industries

The Government of France has tightened regulations on foreign investment in critical and strategic industries to protect national security and economic sovereignty. Non-European investors seeking a stake of 10% or more in French companies operating in sectors such as defense, artificial intelligence, energy, and telecommunications must now obtain approval from the French Finance Ministry.

This new requirement represents a significant reduction from the previous threshold, which required approval for stakes of 25% or more of voting rights. The French Finance Ministry intends to shield technology and assets from investments it characterizes as "opportunistic."

To manage the increase in oversight, the government has accelerated its screening process, committing to determine within 10 days whether a specific application requires a comprehensive review. This policy shift aligns France with a broader Western trend of expanding investment screening due to concerns regarding technology transfer and activities involving Russia and China.