Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

French Authorities Release 2025 Annual Report and Update Guidelines on FDI Rules

Skadden Publication

Pascal Bine Guillaume Goubeaux Alexandre Degas Wesley Lainé

Executive Summary

  • What’s new: The French Treasury released (i) its 2025 annual report on the French FDI regime and (ii) updated FDI guidelines, clarifying key concepts and highlighting increased filings and significant use of mitigation measures.
  • Why it matters: The significant use of mitigation measures and conditions highlights the French authorities’ continued vigilance in protecting French national and economic security interests.
  • What to do next: To successfully navigate the French FDI review process, companies and investors should stay informed about key developments, conduct comprehensive due diligence, plan ahead and proactively engage with French authorities in sensitive cases.

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On July 30, 2025, the French Treasury released its 2025 annual report on the French foreign investment (FDI) regime (2025 FDI Report). The report, which focuses on the French Treasury’s activity during calendar year 2024, identifies developments relating to the French FDI review process and includes considerations for foreign stakeholders contemplating corporate transactions involving French businesses.1

On the same day, the French Treasury published the updated version of the French FDI guidelines. This second iteration of the guidelines largely takes the same approach as the first iteration released in 2022, maintaining the same analytical structure. The 2025 guidelines, however, clarify certain concepts in the French FDI rules and the French FDI review process.

Below we provide consequential takeaways from the 2025 FDI Report and the guidelines, including considerations regarding the French FDI regime that merit attention by market participants.

Takeaway Points From the French FDI 2025 Annual Report

  • Record number of FDI filings in 2024: The French Treasury’s Office of Foreign Investment Control received 392 FDI filings in 2024, compared to 309 filings in 2023. This number marks a 27% year-on-year increase from 2023.

    These FDI filings include:
    • 327 formal requests to the French minister for the economy (MoE) for prior authorization related to a foreign investment;
    • 61 ruling requests by a French company or a foreign investor regarding the applicability of French FDI rules to the French company’s business activities; and
    • 4 notifications by non-EU foreign investors related to crossing the 10% voting rights threshold in a French publicly traded company.
  • 182 FDI authorizations in 2024: The MoE approved 182 foreign investments from a total of 327 formal requests for prior authorization. These 182 authorizations were either simple authorizations (i.e., without any mitigation measures and conditions) or authorizations subject to certain mitigations measures and conditions (see below). The remaining 145 cases were mainly either found to fall outside the scope of the French FDI rules or withdrawn by the relevant foreign investor.
  • Countries of origin of the foreign investors: According to the 2025 FDI Report, foreign investors from the European Union (EU) made up 35% of all FDI filings, while non-EU foreign investors accounted for the remaining 65%. Most of these non-EU foreign investors were based in the United States, the United Kingdom and Switzerland.
  • Significant use of mitigation measures and conditions: The French Treasury reported the use of mitigation measures and conditions in 99 out of the 182 foreign investment clearances issued in 2024 (54%). For context, French authorities imposed mitigation measures and conditions in 53% and 44% of cases in 2022 and 2023, respectively. These figures show that the French authorities impose conditions and remedies in roughly half of granted authorizations. The 2025 FDI Report also reveals that French authorities imposed mitigation measures in 61% of FDI authorizations involving French companies carrying out R&D activities involving covered critical technologies.2

    The report also lists examples of conditions used to mitigate national security risks, including “[e]nsuring that an activity involving the production of defense materials will remain in France, and preventing any risk that such activity will become subject to restrictions under foreign regulations.” This specific condition is intended to address the French authorities’ concern with the extraterritorial application of certain foreign export control laws on the business operations of French companies in the French defense sector.
  • Veto power: The report notes that the MoE rejected six requests for authorization during the past three years. The French authorities do not disclose the specific transactions vetoed by the MoE. However, some of these cases have been extensively commented in the press (e.g., Segault/Velan in 2023). In addition, the report indicates that certain foreign investors withdrew their requests either prior to the issuance of a formal veto or because they considered they would not be able to pursue the transaction under the conditions imposed by the French authorities.
  • Requests to revise mitigation measures and conditions: According to the 2025 FDI Report, the MoE received eight requests to modify certain undertakings that were imposed as part of the relevant FDI clearance. The MoE agreed to revise the undertakings in seven cases, and rejected one such request.
  • Adapting the FDI review process for companies in insolvency proceedings: French FDI rules do not provide any special process or timeline for the review of foreign investments in distressed French target companies. The report states that the Office of Foreign Investment Control collaborates with the Interministerial Committee for Industrial Restructuring (CIRI), the Interministerial Delegation for Corporate Restructuring (DIRE) and insolvency administrators to ensure smooth interaction between the French FDI review process and French insolvency proceedings, regardless of the stage of the proceedings (conciliation, receivership, liquidation, etc.).

    The report also states that the review timeline for companies in insolvency proceedings was on average 20 business days, which is faster than the standard review timeline under French FDI rules (under which a 30-business day phase I and, when necessary, a 45-business day phase II review apply). In 2024, the Office of Foreign Investment Control issued 17 FDI decisions involving foreign investments in French companies in insolvency proceedings, compared to nine in 2023. The updated guidelines recommend that foreign investors contact the French Treasury as early as possible, before formally submitting their offers.

Clarifications in the Updated French FDI Guidelines 

The French FDI guidelines, first issued in 2022, provide a road map to how French authorities interpret and apply key concepts under the French FDI regime. (See our November 14, 2022, client alert “France Issues Guidelines on Foreign Investment Control Regime.”) The 2025 guidelines include the following clarifications:

  • Indirect crossing of the 10% or 25% threshold of voting rights in a French company: French FDI rules include a specific covered investment trigger that applies to non-EU/non-EEA foreign investors crossing the threshold of 25% of voting rights in a French private company or 10% of voting rights in a French publicly traded company. The guidelines provide important clarifications on how these thresholds are assessed in cases of indirect crossing of such thresholds.
    • If a foreign investor acquires control of a target entity (French or non-French) that itself holds, either directly or indirectly, more than 10% or 25% of the voting rights in a French company, the foreign investor is deemed to have indirectly crossed the 10% or 25% voting rights threshold in the French company.
    • Similarly, if a foreign investor acquires a stake in a target entity (French or non-French) and, as a result, crosses the 10% or 25% voting rights threshold in that target — and the target exercises control over a French company — the foreign investor is also considered to have indirectly crossed the same threshold in the French company.
  • Increase from more than 10% voting rights to more than 25% of voting rights in a French publicly traded company: In the 2022 version, the French FDI guidelines stated that when the crossing of the 10% voting rights threshold in a French publicly traded company was subject to French FDI review, no additional French FDI review was required if the same foreign investor later crossed the 25% voting rights threshold in the French company. The updated guidelines now clarify that such foreign investor must submit a new request for authorization to cross the 25% voting rights threshold.
  • Greenfield investments: Under French FDI rules, a foreign investor making a greenfield investment — typically by creating a new French company to develop business activities — is not required to request prior authorization. However, the guidelines clarify that the French FDI regime may apply to any subsequent covered investment carried out by this new French entity. This includes the acquisition of (i) control over a French company, (ii) a French establishment registered in a French Trade and Companies Register or (iii) a branch of business of a French company.
  • Scope of information required from investment funds: When a foreign investor’s chain of control includes one or more investment funds, the investor is required to disclose as part of the FDI filing the identity of the fund manager(s) as well as the entities or individuals who ultimately control those fund managers. This ensures that the authorities have clear visibility of those who exercise actual control or influence over the fund.

    The guidelines clarified that this disclosure obligation does not extend to the fund’s limited partners or investors, provided that these individuals or entities are passive and do not possess any specific rights that would allow them to control or influence the management or operations of the fund. In other words, limited partners or investors who simply provide capital without exerting control or special influence are generally not subject to the disclosure requirement. French authorities, however, retain the right to request the identity of all limited partners or investors in an investment fund at any time during the review process if the Office of Foreign Investment Control considers that such information is necessary to assess a particular authorization request.
  • Intragroup exemption assessment on a case-by-case basis for continuation funds: Under French FDI rules, a foreign investor is exempt from the French FDI prior authorization requirement if the ultimate controlling shareholder of the relevant foreign investor already has control over the French target company prior to the transaction.

    Regarding continuation fund transactions, the guidelines clarify that these transactions can only be exempted if the conditions set forth under the French FDI rules for intragroup exemption are met.3 French authorities will assess these transactions on a case-by-case basis, taking into account the legal or contractual structure of the fund, whether it is managed internally or externally, and the specific characteristics of the fund.

Final Thoughts 

The 2025 FDI Report and updated guidelines show that French authorities are increasingly committed to transparency in the FDI review process and in communicating their expectations to foreign investors. The significant use of mitigation measures and conditions highlights the French authorities’ continued vigilance in protecting national and economic security interests. Importantly, the French FDI regime remains stable, providing a predictable framework for foreign investors. To successfully navigate the French FDI review process, it is essential for companies and investors to stay informed about key developments and issues affecting the regime, conduct comprehensive due diligence, plan ahead and proactively engage with French authorities in sensitive cases.

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1 The French Treasury, which operates under the authority of the French minister of the economy, implements the French FDI regime’s review process. The French Treasury’s Office of Foreign Investment Control in France then administers the French FDI review process, which is coordinated within an interministerial framework by the Interministerial Committee on Foreign Investment in France. This committee includes representatives from the ministries that are relevant to the specific business activities of the French company involved in the foreign investment.

2 Covered critical technologies include: cybersecurity, AI, robotics, additive manufacturing, semiconductors, quantum technologies, energy storage, biotechnology, low carbon energy and photonics.

3 See Article R. 151-7 of the French Monetary and Financial Code.

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.

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