Foreign investments

France expands the list of sectors subject to foreign investment screening – Government, public sector

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As of January 1, 2022, and with the addition of sectors in which foreign investment is subject to prior authorization by the Minister responsible for the economy, France has taken a new step in the pursuit of the expansion of investment controls. strangers. This initiative began in 2014, with the famous “Montebourg decree”, and was further strengthened during the COVID-19 crisis. In addition, foreign investors in all sectors must now provide new information to the authorities when applying for authorization.

In related developments, concerning the acquisition of voting rights by non-EEA investors, the 10% threshold triggering authorization is maintained. The European Commission has also updated its list of projects and programs of interest to the EU.

Research and development in renewable energies are now subject to authorization

The order (stopped) of September 10, 2021[1], relating to foreign investments in France, amends the decree of December 31, 2019 and adds, as of January 1, 2022, a ninth technology — the production of renewable energy — to the list of critical technologies subject to the control procedure for Foreign investments. Among the sectors already subject to the obligation are cybersecurity, artificial intelligence, robotics, additive manufacturing (3D printing), semiconductors, quantum technologies, energy storage and biotechnologies (see Article 6 of the amended decree of December 31, 2019).

Extension of the 10% threshold for the acquisition of voting rights

Decree No. 2021-1758 of December 22, 2021 extends for one year the provision reducing from 25% to 10% the threshold triggering the compulsory prior authorization for the acquisition of shares of a listed company carrying out controlled activities. Until December 31, 2022, investors outside the EEA acquiring more than 10% of the voting rights, regardless of the amount of the operation, are subject to the prior authorization of the Ministry of the Economy.

New information to provide to the authorities

As of January 1, 2022, new information will be provided by the investor in the authorization request: (i) the data management method for the target’s French customers, (ii) the list of the target’s EU customers (in addition to its French clients), (iii) the list of all intellectual property rights of the target (for example, patents, brands, licenses), and (iv) the overall strategy of the investor in France and in the EU, with examples of past transactions and a focus on the relevant industry market.

Updated list of projects and programs of Union interest

On 29 September 2021, the European Commission updated the list of projects and programs of EU interest to include those involving a substantial amount or a significant part of EU funding, or projects and programs related to critical areas, mainly in defence, infrastructure, space, nuclear, research, innovation, technology and health. (See Delegated Regulation EU 2021/2126, 29 September 2021, amending the Annex to Regulation EU 2019/452.) Where foreign direct investment is likely to affect these programs, the Commission may issue an opinion addressed to the Member state. for reasons of security or public order.

Reminder of the principles applicable to foreign investments

It is important to remember that, regardless of the amount of the transaction, any direct or indirect investment made through the acquisition of shares (takeover of a company, or for investors outside the EEA, acquisition of more than 25% — or , until December 31/2022, 10% if the target company is listed on the stock exchange — of the target company’s voting rights), or acquisition of goodwill or assets (all or part of a branch of activity of a company) of a French company the exercise of critical activities is subject to prior authorization from the Minister responsible for the economy, under penalty of nullity and heavy financial fines.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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