France has established a rigorous framework for the control of foreign investments (IEF) in the strategic sectors of its economy. Set out in Article L. 151-3 of the French Monetary and Financial Code, this regime subjects certain investments to the prior authorization of the Minister for the Economy when they involve sectors relating to national defence, public order or the essential interests of France. 

The control of foreign investments is part of a broader economic security policy, while preserving France’s attractiveness. France is the forth country worldwide in terms of industrial investments over the 2021-2025 period, representing one third of the investments made in Europe.

Rapid growth

The control activity has experienced a marked structural increase: 384 authorization applications were submitted in 2025, compared with 327 in 2024 and 272 in 2023. In 2024, 182 investments were authorized, 54% of which were subject to conditions, while six investments have been rejected over the past three years. 

This growth is driven by the gradual broadening of the scope of control originally set in 1966, following the reforms introduced notably in 2014 and 2019, and by an increased awareness of the framework by investors and their advisors and the related dissuasive sanctions.

Q1 2026 Key decisions 

The first quarter of 2026 was particularly busy, with notably three major decisions by the Minister for the Economy that were heavily commented: two conditional authorizations and one prohibited investment.

The authorizations granted for the acquisitions of Exaion by Mara Holdings and of LMB Aerospace by Loar Group - both involving US-based acquirers of French companies operating in strategically sensitive sectors - reveal the increasing concern of the French State to maintain industrial capabilities in France and to control governance. In both cases, the State imposed for the production activities to remain on the French territory. For Exaion, among the conditions were the entry of a French reference partner (NJJ, Xavier Niel’s holding company) and a majority of board seats appointed by French investors. For LMB Aerospace, the Agence des Participations de l’État was granted a golden share (action de préférence) enabling it to veto decisions contrary to France’s interests. 

The prohibited investment concerned the sale by Eutelsat of certain on-ground passive infrastructures to a Swedish PE fund, and was deemed too strategic to both civilian and military communication.

Legislative initiatives: Towards governance-based controls

Activity during the beginning of 2026 triggered a flurry of legislative initiatives.

On 3 March 2026, a first bill (proposition de loi n° 2558) was tabled before the National Assembly, seeking to impose the establishment of a “proxy board” (conseil d’administration alternatif) composed exclusively of French nationals and endowed with veto rights over decisions likely to affect the Nation’s essential interests.

On 27 March 2026, a broader bill (n° 2600) followed, pursuing four objectives: 

• Broadening the scope of the control in sensitive sectors including health, digital, food, energy and media;
• Codifying objectives that shall be satisfied by the conditions imposed on foreign investors: maintenance of production and R&D capabilities in France, management autonomy through the appointment of an ad hoc board of directors, etc.;
• Granting to the National Assembly's Finance and Defence Committees an effective right of oversight over authorizations granted by the Minister for the Economy; and
• Introducing a principle of international reciprocity.

In parallel, a parliamentary mission on economic security policies was launched on 24 February 2026 and entrusted to three deputies of the National Assembly. They will examine the German, Italian, Dutch, Spanish and British models as well as the US and Chinese economic security policies in order to identify potential sectoral expansions (data, cloud, space, deep tech) and control measures. Their report, expected in June 2026, shall include proposals to the French Government in order to further reform the French foreign investment control regime. 

A strengthened European framework in the future

The contemplated French reform shall also take into account the evolvements of the European regime. Indeed, on 11 December 2025, the European Parliament and the European Council reached a political agreement proposing a strengthening of the screening of foreign direct investments in the EU. 

This new regulation, expected in the first half of 2026, will require each Member State to establish a screening mechanism and will broaden the list of sensitive sectors to include artificial intelligence, biotechnologies, energy, electronics, robotics, electoral infrastructure and systems, and systemically important financial actors, some of which were only covered through R&D activities in the current French regime. 

A strategic turning point

The convergence of landmark Minister decisions, ambitious legislative proposals and the forthcoming European screening regulation leaves little doubt - 2026 will mark a strategic turning point for foreign investment control in France. 

Yet, foreign acquisitions in strategic sectors remain achievable, provided investors engage constructively with the French State's expectations on governance, territorial anchoring and industrial continuity. 

France's attractiveness for foreign investments has not deteriorated as controls have been strengthened, thanks in particular to the transparency efforts made by the French Minister for the Economy through the publication of guidelines, annual reports and the holding of meetings with practitioners, the regime hence gaining in predictability. 

This goal for a transparent framework should be pursued by the reform in order to plan and execute smoothly transactions into one of Europe's most attractive targets for strategic investments.