France tightens foreign investment rules to safeguard national security

French Prime Minister Sébastien Lecornu issued a decree on Sunday tightening oversight of non-European foreign investment in French companies, in a move aimed at strengthening national security protections.

Under the decree, any investor from outside the European Union seeking to acquire 10% or more of a listed French company operating in a sensitive sector must now obtain prior government approval, regardless of whether the company is listed in France or abroad.

The decision lowers the threshold for government review from 25% of voting rights to 10% of shares, aiming to counter what it described as "opportunistic takeovers" that could target French firms listed outside the EU and pose a threat to national security.

The decree stated that the new measures come amid rising geopolitical tensions and are intended to protect strategic companies and technologies linked to French security.

To avoid hindering companies’ ability to raise capital from the markets, the Ministry of Finance will be required to issue a decision within 10 days of an application to determine whether a deal requires in-depth review.

The new rules are set to come into effect later this month.