Foreign investors must anticipate FDI clearance issues before planning transactions in strategic or publicly sensitive sectors in France.
The FDI Screening Guidelines specify that it is possible to seek an opinion from the MoE when the transaction is only an investment project, to confirm whether the French company’s activity actually falls within the scope of the FDI screening. The MoE has two months to issue its opinion.
The clearance process with the MoE generally occurs between the signing and the closing of a transaction and is a condition precedent of said closing. It is a two-phase regime which may not exceed 75 business days.
The MoE has an initial 30-business-day period from the receipt of the complete application file to notify the foreign investor that the investment is either
- outside of the scope of review, or
- that clearance is granted without conditions, or
- that it will need further examination to determine whether French national interests can be preserved with the granting of an authorisation subject to conditions.
When further analysis is required and mitigating conditions are necessary, a second phase begins, lasting a maximum of 45 business days, at the end of which the MoE communicates one of three possible outcomes to the investor:
- the transaction is authorised without conditions, or
- the transaction is authorised subject to conditions in order to safeguard national interests, or
- the transaction is not authorised.
If no response is received by the investor at the end of the 30-business-day first phase, the clearance is deemed refused. If no response is received by the investor at the end of an additional 45-business-day second phase allotted to the MoE for further examination, the clearance is also deemed refused.
The grounds on which the MoE can refuse an authorisation are strictly limited to whether there are doubts regarding the investor’s character or whether it is impossible to prescribe sufficiently strong conditions to protect national interests.
The MoE’s decision may be challenged before the French administrative courts within the two months of the decision.
The MoE’s decisions are not made public, but aggregated statistics are published on its website regarding the number of filings, the country of origin of the foreign investors and the strategic or sensitive sectors involved.