The rules and procedures to protect the interests of French companies when it comes to foreign investments have been amended by Decree 2018/1057, which came into effect on 1 January 2019.

The French state was already able to protect companies in which it holds shares from foreign investors through the use of a 'golden' or 'special share' mechanism (for further details please see "Protecting the state's interest in strategic companies: a 'golden touch'"). It was also able to control foreign investments made in France in specific sensitive sectors by submitting them to the prior authorisation of the Ministry of Economy and Finance, which can either authorise the investment (with or without conditions) or refuse it.

The new decree has extended the state's control of foreign investments to new sectors and enabled target companies to take an active part in the process by giving them the right to directly ask the ministry if the foreseen investment is subject to a prior authorisation.

Scope of the prior authorisation regime

The prior authorisation regime is applicable to investments:

  • made by a person or a company whose residence or registered office is in a state which is neither a member state of the European Union nor a member state of the European Economic Area; and
  • consisting of acquiring the control of, acquiring a branch of activity of or detaining directly or indirectly more than 33.33% of the capital or voting rights of a company with a registered office in France whose activities relate to the sensitive sectors.

Extension of the control of foreign investments to new sectors

The state already supervises foreign investments in French companies whose activities are critical for public order, safety, security or national defence. With this new decree, the state goes further by extending its control over transversal domains through the protection of new technologies that are key to France, including nanotechnologies, cybersecurity, AI, data hosting, data capture, data security, robotics and additive manufacturing technologies. Since 1 January 2019, foreign investments in these new sectors are therefore also subject to prior authorisation by the ministry.

A more active role for target companies

This decree also enables target companies to ask the ministry if the foreseen operation is subject to the prior authorisation procedure. This ability, which was previously available only to foreign investors, allows target companies to have a more active role in an investment or acquisition process.

Both the target company and the foreign investor will now be able to contact the French administration to anticipate the prior authorisation procedure and then prepare or adapt the structure of a foreseen investment. The administration has two months to reply.


The scope of the prior authorisation process will be significantly widened by this extended regime. Consequently, the French administration will face a major new challenge – the question of how to protect French interests while keeping French companies attractive to foreign investors.

Moreover, these new rules are part of a wider trend of reform in French corporation law (known as the Action Plan for Business Growth and Transformation), which is also expected to provide more proportional and adequate sanctions applicable to investors who are in breach of their obligations in foreign investments in French companies. The developments of this new legal arsenal shall be closely watched.

For further information please contact Alain Levy, Gwenaëlle de Kerviler or Valérie Attia at AyacheSalama by telephone (+33 1 58 05 38 05) or email ([email protected], [email protected] or [email protected]). The AyacheSalama website can be accessed at

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.