The COVID-19 crisis has highlighted, in a dramatic way, the issues that a country may face if it loses control over certain strategic sectors of its economy to foreign interests.

Like other countries in the world, France has had in place for many years a mechanism to screen foreign direct investments (”FDI”) in strategic sectors, but over the last year it has adopted legislation to markedly reinforce that mechanism, consistent with a global trend developing even before the COVID-19 pandemic.

Foreign investors contemplating an investment in France should expect an environment of stricter scrutiny of proposed transactions from the perspective of FDI regulations, and probably the adoption of additional protective measures to ensure French control of sensitive activities, such as the measures adopted or announced by the French government in the last few months and described below.

With this in mind, this article provides an overview of the current French FDI regulatory framework, the scope of the FDI control mechanism, the corresponding authorization process, and the sanctions applicable in the event of non-compliance.

Photo of Delia Spitzer Delia Spitzer

Delia Spitzer is a partner in the Corporate Department and head of the Corporate Department and Mergers & Acquisitions Group in our Paris Office, which she opened for the Firm. Born and raised in Argentina, Delia studied law in the United States and…

Delia Spitzer is a partner in the Corporate Department and head of the Corporate Department and Mergers & Acquisitions Group in our Paris Office, which she opened for the Firm. Born and raised in Argentina, Delia studied law in the United States and practiced in New York prior to moving to France. She is admitted to the Paris Bar and the New York Bar.

Delia has more than 30 years of experience in cross-border business transactions, through which she brings into play her global cultural and legal background. She advises French and other European clients on issues of U.S. law, and U.S. clients on the legal aspects of their investments in France, and has worked on a broad range of corporate matters, including numerous acquisitions – both for industrial clients and private equity funds – joint ventures, commercial contracts and licensing arrangements, as well as matters involving securities law. Delia has also handled various projects in Latin America, including those in Mexico, Colombia, Venezuela, Brazil and Argentina.

Due to the close relationships that Delia has developed with her long-standing clients, she has become a senior advisor to them in instances where mergers and acquisitions intersect with other areas of law, including competition law, restructurings, sensitive labor issues, litigation in French and U.S. courts and international arbitrations.

Delia is ranked in several leading legal directories, including Chambers and Legal 500Chambers Europe quotes a client as saying, “She combines strong legal skills with a commercial orientation and always looks at the bigger picture.” Another Chambers interviewee commented, “She is very sharp and creative, which is very important. She bridged the cultural gap between the negotiating parties.”

Delia often speaks at client seminars and training events organized by French professional associations on various corporate topics, such as the negotiation of international contracts.

She actively participates in the Firm’s pro bono program, through which she regularly advises Yes Akademia, a not-for-profit organization dedicated to providing development opportunities for promising young adults from troubled suburbs in addition to social enterprises incubated by the prestigious French ESSEC business school.

Photo of Stéphanie Martinier Stéphanie Martinier

Stéphanie Martinier is a special international corporate counsel in the Corporate Department, working in the Paris office.

Stéphanie advises French and international clients on the legal aspects of their investments in France. She has worked on a wide range of corporate transactions, including…

Stéphanie Martinier is a special international corporate counsel in the Corporate Department, working in the Paris office.

Stéphanie advises French and international clients on the legal aspects of their investments in France. She has worked on a wide range of corporate transactions, including business acquisitions and sales (both for industrial clients and private equity funds), and joint ventures, and has been involved in the negotiation of sensitive commercial contracts. In addition, she has built long-term relationships with her clients advising them in this context on compliance with the General Data Protection Regulation (GDPR) and other French data privacy regulations.

Stéphanie has also developed expertise in the restructuring of corporate groups, in the negotiation of management packages and in dealing with the corporate aspects of the departure of top executives.

Photo of Doriane Shannon Doriane Shannon

Doriane Shannon is an associate in the Corporate Department. Based in the Paris office, Doriane’s work focuses on cross-border M&A and private equity transactions in addition to general corporate matters, including corporate restructurings.

Doriane initially joined Proskauer as part of the Paris Bar…

Doriane Shannon is an associate in the Corporate Department. Based in the Paris office, Doriane’s work focuses on cross-border M&A and private equity transactions in addition to general corporate matters, including corporate restructurings.

Doriane initially joined Proskauer as part of the Paris Bar training program. In the context of this program, Doriane interned at a major insurance company where she was involved in M&A transactions as well as in the company’s investments in professional funds and securitization vehicles. In addition, she interned at the French legal department of one of the worldwide leaders in IT and networking, focusing on the negotiation of international commercial agreements and agreements with governmental bodies.

Doriane received a Master’s Degree in economic law, specializing in companies, markets and regulation, from the Law School of the Paris Institute of Political Studies (“Sciences Po”) and studied law and politics at the University of Manchester in England.