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The recently announced restrictions on FDI in France are indicative of the global trend towards tighter control over investment regulation in France and the EU. So, let’s take a closer look at the main aspects of the updated legislation & see how they can affect those considering registering a French company or conducting business activities in the EU.

Key Outtakes

Starting this April, non-resident investments have been governed by a new regulatory framework. It’s based on:

  • PACTE;
  • Ministerial decree of the thirty first of December, 2019;
  • Legislation on FDI verification in the EU.

From now on, investing in strategically important sectors in France requires getting an FDI permit. Issued by the Minister of Economy, the permit must be obtained prior to conducting an FDI transaction in France.

An FDI permit is required for any transaction meeting the following criteria:

  • an FDI comes from another country (EU members included).
  • an FDI transaction requires obtaining an investment license in France:
  • an FDI transaction involves acquisition of a France-based company by non-residents;
  • an FDI transaction involves acquisition of all or part of a branch of a company whose HQ is established in France by foreign investors; 
  • an FDI transaction involves obtaining a twenty five percent stake in a France-based company by investors from non-EU/EEA countries. 
  • an FDI transaction involves French companies that operate in strategic sectors;
  • an FDI transaction is viewed as part of the exercise of state power;
  • an FDI transaction may affect public order, public safety, national interests, etc.

All strategic activities are listed in Article 151-3 of the FMFC, which has been significantly expanded in recent years.

To sum up, Incorporating a company in France may require seeking an opinion from MINEFI to determine whether a target company is eligible for an FDI permit.

Conclusion

Should you require more information on FDI in France, please, consider contacting IQ Decision UK. By signing up for a consultation on FDI regulation in France, you will be able to get a better idea of what it takes to register a company in the EU & which criteria an investment must meet to qualify for an FDI.