Publication of the decree extending the control of foreign investment in France


Decree no. 2020-1729 of December 28, 2020 amends Decree no. 2020-892 of July 22, 2020[1] and extends the control of foreign investments in France by one year, i.e. until December 31, 2021.

In principle, foreign investments in France (hereinafter “FIF”) are free.

As an exception, in sectors that are restrictively listed, that are related to national defense or likely to affect public order and activities that are essential to guaranteeing the country’s interests, the French Monetary and Financial Code (hereinafter “CMF”) makes FEIs (editor’s note: the entry of a foreign player in the capital of a French company) subject to a prior authorization procedure[2].

With the health crisis, these prior authorization and control procedures have been strengthened.

On April 29, 2020, Bruno Lemaire, the French Minister of Economy and Finance, announced the adaptation of the control procedure for FIFs around two measures:

(i) The permanent inclusion of biotechnologies in the list of critical technologies covered by the FIF control;

(ii) The lowering to 10% of the threshold for holding voting rights in a company triggering the procedure, for a limited period of time, for listed companies, and for investors from third countries (compared to 25% in normal times).

It should be noted that the epidemic persists, and the decree of December 28, 2020 extended the reduction to 10% of the holding threshold triggering the control procedure by one year, until December 31, 2021.

For the rest, the procedures for implementing this measure remain the same:

  • It does not concern European investors;
  • It concerns only investments made in listed companies;
  • It is carried out according to a special procedure: the investor crossing the threshold of 10% of WEIs notifies the Treasury’s General Directorate. From then on, the Minister of the Economy, Finance and Recovery has 10 days to decide whether the transaction should be subject to further examination. Such an examination may lead to the refusal of a foreign investor to hold more than 10% of the voting rights of a sensitive French company.

UGGC and its team of specialized lawyers are at your disposal to assist you, as a foreign player, in your investments in France.

By  the IP/IT team of UGGC Law Firm

Source : Legifrance

[1] This decree related to the temporary lowering of the control threshold for foreign investments in French companies whose shares are admitted to trading on a regulated market.

[2] See Article L. 151-3 of the CMF

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