3 August 2026
Executive Summary
France has strengthened its foreign-investment screening regime by lowering the threshold at which certain non-European investments in strategically sensitive French businesses require government authorisation.
Under the new rules, a non-European investor acquiring 10% or more of the shares in a publicly traded French company operating in a sensitive sector may require approval, regardless of whether that company is listed in France or elsewhere. The previous general threshold was 25% of voting rights.
The French Government said the change is intended to prevent opportunistic acquisitions that could threaten national security or place critical companies and technologies under unsuitable foreign influence. The new rules are expected to enter into force later in August.
UK Impact
UK investors may be treated as non-European investors for the purposes of French investment screening following Brexit.
The change could therefore affect UK:
- Private-equity and infrastructure investors.
- Corporate acquisition strategies.
- Minority investments in listed companies.
- Pension and institutional investment portfolios.
- Joint ventures involving strategically important French businesses.
- Transactions involving technology, defence, energy, telecommunications or critical infrastructure.
A transaction that appears to provide no operational control may still trigger scrutiny where the shareholding threshold is met.
UK businesses should also consider indirect acquisitions made through subsidiaries, investment vehicles or consortium structures.
Global Impact
France’s decision forms part of a broader European movement towards stronger economic-security controls.
The revised EU investment-screening framework requires member states to maintain screening systems covering sensitive and strategic sectors. It also broadens attention to indirect foreign control and allows greater scrutiny of transactions routed through European entities but ultimately controlled from outside the EU.
International investors may increasingly face:
- Additional regulatory filings.
- Longer transaction timetables.
- Conditions attached to approval.
- Restrictions concerning technology, data or governance.
- Retrospective scrutiny of unnotified transactions.
- Greater investigation of ultimate ownership and funding sources.
Our View
Businesses should no longer assume that only majority acquisitions or changes of control require foreign-investment approval.
Even a relatively small minority investment may now create regulatory exposure where the target operates in a sensitive sector.
Investors and advisers should:
- Conduct investment-screening analysis at the beginning of a transaction.
- Identify the target’s sensitive activities, technology and government relationships.
- Establish the investor’s ultimate ownership and source of funding.
- Include regulatory approval conditions within transaction documents.
- Allow sufficient time for government review.
- Avoid splitting an investment into stages in an attempt to remain below a threshold.
Foreign-investment screening is becoming a central transaction risk alongside merger control, sanctions and competition law.
Risk Indicator: HIGH
Disclaimer
The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.