While France remains a top destination of foreign investments in Europe, the 2024 annual report published by French foreign direct investment (FDI) authorities shows increased scrutiny of investments in French strategic sectors.
According to EY's Baromètre de l'attractivité 2025, France remained the leading European country in terms of the number of foreign investment projects in 2024, for the sixth consecutive year. With a total of 1,025 projects, France once again outpaced the United Kingdom (853 projects) and Germany (608 projects). Although the number of projects declined slightly compared to 2023 (1,025 versus 1,194), France still attracted 19 percent of all FDI in Europe, a higher share than in previous years.
On 30 July 2025, the French Ministry of the Economy, Finance and Industrial and Digital Sovereignty (the "MoE") published its 2024 annual report on FDI screening in France. The report outlines key anonymized statistics and enforcement trends under the French FDI regime. The 2024 report confirms what FDI practitioners have observed on the ground: increased scrutiny of inbound investments amid persistent geopolitical tensions. Alongside the annual report, the MoE also published a revised version of the FDI guidelines, providing further clarity on several key aspects of the French FDI rules.
Significant increase in the number of transactions reviewed
The number of FDI applications submitted to the MoE increased significantly, with 392 cases reviewed in 2024 compared to 309 in 2023, representing a year-over-year increase of approximately 27 percent. Of these, 327 were formal requests for prior approval. However, only 182 of those 327 transactions were ultimately deemed within the scope of the FDI rules. This suggests that approximately 40 percent of applications are submitted on a precautionary basis, particularly where it is unclear whether the target operates in a strategic sector.
In 2024, the MoE received 61 filings for preliminary rulings and issued 49 decisions in response, marking a significant increase from 27 decisions in 2023. In over 73 percent of cases, the MoE concluded that the transaction was out of scope, consistent with 2023 figures. This again reflects the precautionary approach often taken by investors.
High number of conditional clearances
The proportion of transactions cleared with conditions increased from 44 percent in 2023 to 54 percent in 2024. Foreign investors should take note of the high number of mitigated cases, an established feature of the French regime, which may also apply to acquisitions of minority stakes in French entities.
The report stresses that conditions were particularly applied to investments in targets with R&D activities in France: 61 percent of such transactions were subject to mitigation measures. These conditions are typically behavioral in nature. Examples cited in the report of conditions imposed in 2024 include:
- Duty to inform the French authorities before a product becomes subject to foreign restrictions;
- Ensuring that a portfolio of patents related sensitive medical research remains owned and operated by the French entity; or
Establishing a security committee within the target entity to oversee the implementation of the conditions and to submit strategic decisions for prior approval by a state representative.
The report also highlights an interesting development in 2024: the revisions of conditions at the request of the investor. Eight such requests were submitted, of which seven were approved. One request was denied on the grounds that the proposed changes would have significantly affected an activity essential to public security.
Finally, the report confirms that vetoes remain rare, with only six transactions vetoed over the past three years.
US, UK, and Swiss investors retain pole position
In 2024, 65 percent of applications were submitted by non-EU investors, primarily from the United States, the United Kingdom, and Switzerland. European investors accounted for the remaining 35 percent, with the majority originating from Germany, Luxembourg, and the Netherlands.
The overall investor profile remains broadly consistent. Banks, sovereign wealth funds, and private equity firms represented the largest category of filers (44 percent in 2024, compared to 43 percent in 2023), followed by individual investors (28 percent, up from 24 percent), and industrial investors (27 percent, down from 33 percent).
Most reviewed transactions in 2024 involved investments in essential infrastructure, goods, and services in the civil sector, representing 37 percent of cases, a slight decrease from 43 percent in 2023. These sectors include energy, water, telecommunications, transportation, and public health. Additionally, 26 percent of authorized transactions related to investments in highly sensitive areas such as defense, cryptology, dual-use goods, and R&D on critical technologies. Mixed transactions involving both civil and defense activities accounted for 22 percent of reviewed cases, while R&D activities involving critical technologies and dual-use goods comprised 14 percent. Notably, the number of transactions flagged for review due to R&D activities has steadily increased, rising from 27 in 2021 to 44 in 2024.
Accelerated review in restructuring cases
The report provides insights into the MoE's approach to FDI filings involving distressed French entities. In 2024, approximately 65,000 businesses were subject to insolvency proceedings. The report notes that such companies may struggle to secure domestic financing and may therefore turn to foreign investors.
Although The FDI rules do not provide for a fast-track process or exemption for restructuring transactions, unlike merger control regulations, the MoE applies a pragmatic approach and offers an accelerated review process in these cases. The average processing time for transactions involving companies subject to insolvency proceedings is around 20 business days, significantly shorter than the standard timeframe of 30 business days for Phase I and 45 business days for Phase II. In 2024, 17 decisions were issued concerning companies undergoing collective proceedings, compared to nine in 2023.
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This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
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