Enhanced Examination of Foreign Direct Investments in France Due to Escalating Geopolitical Conflicts
France Strengthens Foreign Direct Investment Regime in 2024-2025
In a move to secure strategic interests amid complex global investment dynamics, France has expanded and tightened its Foreign Direct Investment (FDI) regime, according to the 2024 annual report and related 2025 guidelines.
The changes in the French FDI regime are marked by an expanded control scope, a rising number of transactions reviewed, more frequent imposed conditions to manage risks, and strengthened enforcement and transparency mechanisms.
A fourth category was added to the screening process, covering the acquisition of control over establishments registered with the French Trade and Companies Register. This expansion enhances the scope of transactions subject to review, especially in sensitive sectors such as defense, energy, AI, healthcare, and transportation.
The number of FDI applications submitted to the Ministry of Economy (MoE) rose sharply to 392 in 2024, up about 27% from 309 in 2023. Among these, 327 were formal prior approval requests, but only 182 were determined to truly fall within the FDI regulatory scope, indicating many precautionary filings by investors uncertain about target sectors.
There was a notable increase in the proportion of transactions cleared with conditions—from 44% in 2023 to 54% in 2024. Conditions are mostly behavioral and frequently imposed on investments involving R&D activities in France, with 61% of such deals carrying mitigation measures.
The French framework is also evolving towards stricter enforcement and transparency. New legal provisions (effective January 2026) require declaring foreign influence activities to HATVP (High Authority for Transparency in Public Life), backed by enforcement powers including financial penalties, audits, and inspections. This reflects France’s strengthened stance against covert foreign interference tied to investment and control attempts.
In 2024, approximately 65% of FDI applications were submitted by non-EU investors, primarily from the United States, the United Kingdom, and Switzerland. Banks, sovereign wealth funds, and private equity firms represented the largest category of filers, accounting for 44% of applications in 2024.
Interestingly, the report highlights an development in 2024: the revisions of conditions at the request of the investor, with seven such requests approved.
Vetoes remain rare, with only six transactions vetoed over the past three years. Most reviewed transactions in 2024 involved investments in essential infrastructure, goods, and services in the civil sector, representing 37% of cases, a slight decrease from 43% in 2023.
Industrial investors accounted for 27% of applications, a decrease from 33% in 2023. Individual investors followed as the second largest category, accounting for 28% of applications, an increase from 24% in 2023. European investors accounted for the remaining 35% of FDI applications, with the majority originating from Germany, Luxembourg, and the Netherlands.
In terms of specific sectors, 26% of authorized transactions related to investments in highly sensitive areas such as defense, cryptology, dual-use goods, and R&D on critical technologies. Mixed transactions involving both civil and defense activities accounted for 22% of reviewed cases. The number of transactions flagged for review due to R&D activities has steadily increased, rising from 27 in 2021 to 44 in 2024.
In 2024, the MoE received 61 filings for preliminary rulings and issued 49 decisions in response, marking a significant increase from 2023.
Overall, the French FDI regime in 2024–2025 is designed to secure French strategic interests in a complex global investment landscape.
- France's Foreign Direct Investment (FDI) regime has expanded the control scope to include establishments registered with the French Trade and Companies Register.
- The number of FDI applications reviewed by the Ministry of Economy (MoE) has increased significantly, with 392 applications in 2024, up from 309 in 2023.
- Conditions are frequently imposed on investments involving research and development (R&D) activities in France, with 61% of such deals carrying mitigation measures.
- France's focus on transparency and enforcement is evident in new legal provisions that require declaring foreign influence activities to HATVP, effective January 2026.
- The majority of FDI applications in 2024 were submitted by non-EU investors, primarily from the United States, the United Kingdom, and Switzerland.
- Banks, sovereign wealth funds, and private equity firms represented the largest category of filers, accounting for 44% of applications in 2024.
- Seven requests to revise conditions at the request of the investor were approved in 2024.
- Vetoes remain rare, with only six transactions vetoed over the past three years.
- The number of transactions flagged for review due to R&D activities has steadily increased, rising from 27 in 2021 to 44 in 2024.
- in 2024, industrial investors accounted for 27% of applications, a decrease from 33% in 2023, while individual investors followed as the second largest category, accounting for 28% of applications, an increase from 24% in 2023.
