Executive Summary
- What’s new: France has adopted a new rule extending the 10% voting rights trigger under French FDI rules to French companies listed on certain non-EU/EEA regulated markets, effectively lowering the voting rights threshold from 25% to 10% for such French companies. The rule goes into effect on August 17, 2026.
- Why it matters: Covered investments by non-EU/EEA foreign investors may trigger a notification requirement where the French publicly listed company carries out covered activities.
- What to do next: Investors pursuing transactions involving French companies may want to take French FDI considerations into account from the outset, particularly where such a transaction may trigger a covered investment under French FDI rules.
__________
On July 30, 2026, the French government adopted Decree No. 2026-718 and a related administrative order (together, the New Rule),1 broadening the scope of France’s foreign direct investment (FDI) regime as applied to French publicly listed companies. Specifically, the New Rule extends the scope of the 10% voting rights trigger under French FDI rules to French companies listed on certain regulated markets outside the European Union and European Economic Area (EEA).
The New Rule applies only to such covered investments by non-EU/EEA foreign investors. Under the New Rule, such an investment will trigger a notification requirement in France if the relevant French publicly listed company is involved in covered activities within the meaning of French FDI rules.
The New Rule will enter into force on August 17, 2026.
Background on French FDI Rules
French FDI rules require a foreign investor to file a request with, and obtain authorization from, the French minister for the Economy (MoE) prior to making a covered investment (Covered Investment) in a covered activity (Covered Activity) in France.
Covered Activities are defined in the French Monetary and Financial Code (MFC) and include, among others:
- Activities in list-based sensitive sectors.
- Research and development (R&D) relating to critical technologies.
Under French FDI rules, Covered Investments are defined as:
(i) The acquisition of control of a French company (Control Trigger);2
(ii) The acquisition, in whole or in part, of a branch of business of a French company (Asset Trigger);
(iii) For non-EU/EEA foreign investors only, the acquisition of more than 25% of voting rights in a French company; or
(iv) For non-EU/EEA foreign investors only, the acquisition of more than 10% of voting rights in a French publicly listed company whose shares are admitted to trading on a regulated market ((iii) and (iv) together, Threshold Trigger).
The Control Trigger and Asset Trigger apply to all foreign investors subject to the French FDI regime. By contrast, the Threshold Trigger applies only to non-EU/EEA foreign investors. As discussed below, the New Rule affects only the 10% voting rights prong of the Threshold Trigger applicable to French publicly listed companies. It does not alter any thresholds.
Instead, for purposes of the 10% voting rights trigger rule, it defines the term “regulated market” and provides a list of such markets, thereby bringing within scope French listed companies whose shares are admitted to trading on certain regulated markets outside the EU/EEA.
For additional background on the 10% voting rights prong of the Threshold Trigger, see our January 16, 2024, client alert, “France Strengthens Foreign Investment Controls, Expands Jurisdiction to ‘Commercial Establishments’ Registered in France.”
The Threshold Trigger
For non-EU/EEA foreign investors only, the Threshold Trigger is met in either of two circumstances:
(i) The acquisition of more than 25% of the voting rights in a French company; or
(ii) The acquisition of more than 10% of the voting rights in a French publicly listed company whose shares are admitted to trading on a regulated market.
Before the New Rule, the French FDI rules did not define the term “regulated market.” The French FDI guidelines (Guidelines), however, clarified that the 10% voting rights prong of the Threshold Trigger applied where a French company’s shares were admitted to trading on a regulated market in France or elsewhere in the EU or EEA.
The Guidelines further stated that French companies listed on nonregulated markets, such as Euronext Growth, fell outside the scope of this provision, as did French companies listed on regulated markets outside the EU or EEA. Accordingly, French companies listed on non-EU/EEA regulated markets remained subject to the 25% voting rights prong of the Threshold Trigger for purposes of French FDI rules.
That position has now been modified by the New Rule, as discussed below.
Extension of the Scope of Regulated Markets
The New Rule defines “regulated market” by reference to a specific provision of the MFC.3 Furthermore, the New Rule expands the scope of “regulated markets” beyond the interpretation set out in the Guidelines to include certain regulated markets outside the EU and EEA for purposes of the 10% voting rights threshold.
Accordingly, where a French company’s shares are admitted to trading on such a market, a transaction by a non-EU/EEA foreign investor that crosses the 10% voting rights threshold in such a French company will trigger a notification requirement to the French authorities if such French company carries out Covered Activities.
Under the New Rule, the scope of regulated markets that apply to the 10% voting rights prong of the Threshold Trigger includes:
- U.K.: London Stock Exchange
- Switzerland: SIX Swiss Exchange
- Canada: Toronto Stock Exchange
- Singapore: Singapore Exchange
- Japan: Japan Exchange Group
- South Korea: Korea Exchange
(i) Regulated markets located in EU member states or EEA countries and included on the list maintained by the European Securities and Markets Authority, as specified in Article 56 of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in Financial Instruments (MiFID II).
(ii) Regulated markets located outside the EU that benefit from an equivalence decision from the EU Commission (Commission) in accordance with Article 25 para. 4 of MiFID II.
(iii) The following regulated markets:
Regarding regulated markets that are not specifically listed in item (iii) above but are subject to an equivalence decision of the Commission under MiFID II (as referenced in item (ii) above), the Commission has adopted three such equivalence decisions that remain in force. Under the relevant Commission implementing decisions, the regulated markets recognized as equivalent are those in Australia, Hong Kong and the United States.
With respect to the United States, the relevant European Commission implementing decision includes a list of national securities exchanges registered with the U.S. Securities and Exchange Commission (SEC), including exchanges operated by the Nasdaq and New York Stock Exchange groups.
Additional guidance on the New Rule is expected when the French authorities issue the next version of the Guidelines.
Simplified Notification and Fast-Track Review
The New Rule retains the simplified notification and fast-track review process for Covered Investments that fall within the scope of the 10% voting rights prong of the Threshold Trigger.
However, it introduces new disclosure requirements that the relevant foreign investor must include in its notification to the French authorities. Upon receipt of the notification, the MoE has 10 business days to determine whether the proposed investment must undergo a standard review under the French FDI regime.
Final Thoughts
The New Rule reflects France’s broader focus on economic security, as recently underscored in a parliamentary report encouraging the government to protect France’s strategic assets. France is expected to introduce further reforms to its FDI regime, both to align with the new EU FDI Regulation passed in June 2026 and to advance its economic security objectives.
Investors pursuing transactions involving French companies should take French FDI considerations into account from the outset, particularly where such a transaction may trigger a Covered Investment under French FDI rules. In practice, this means:
- Allowing sufficient time in the deal timetable for French FDI assessments.
- Carefully considering stake-building and disclosure strategies.
- Addressing any potential filing requirements in France at an early stage.
Research assistant Pierre-Alexandre Morin contributed to this article.
_______________
1 The decree and order were published in the Journal Officiel de la République Française on August 2, 2026.
2 French FDI rules assess control pursuant to Article L. 233-3 of the French Commercial Code. The French FDI guidelines confirm that the Control Trigger includes the acquisition of “deemed control,” “de facto control” and “joint control,” as such concepts are defined under French corporate law.
3 See Article R. 151-2 (4°) of the MFC. See also Article L. 421-1 of the MFC.
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.