Foreign Investment Control in France and in the European Union 2025 in review, and what changes in 2026
Foreign investment screening stayed busy in France and across the EU in 2025, and 2026 has already brought real changes to both frameworks. This note looks first at how the regimes operated last year, then at what is changing from 2026 onwards.
1. France in 2025: a busy year for the screening regime
France held onto its position as Europe’s top destination for foreign direct investment for a seventh year running, even as the government kept tightening the screening rules around the country’s most sensitive sectors.
Filings keep climbing. The Treasury registered 418 foreign investment filings in 2025, up 6.6% on the 392 recorded in 2024. Prior authorisation requests drove the increase, rising from 327 to 384 (+17%), while requests for a preliminary ruling on whether an activity is caught fell by more than half, from 61 to 30. The accelerated procedure for listed companies stayed flat at 4 filings.
Fewer conditional clearances. Of the 323 decisions issued, 167 (52%) fell within the regime’s scope, slightly down from 54% in 2024. Among those, 49% came with conditions, down from 54% in 2024, though still above the 44% recorded in 2023 – so no clear upward trend in conditionality despite screening becoming more routine.
Where the deals are. Essential infrastructure, goods and services remained the largest category, at 38% of authorisations (stable on 2024). Activities sensitive by nature – defence, dual-use goods, cryptology – fell to 22% (from 26%), and critical-technology R&D dropped to 11% (from 14%). Mixed activities spanning more than one category rose to 29% (from 22%), reflecting how cross-cutting these strategic assessments have become.
Who is investing. Non-EU/EEA investors made up 67% of ultimate investors (up from 65%), and financial investors – private equity firms in particular – became the single largest category at 50% of screened transactions, up sharply from 44% in 2024. Natural persons fell to 23% (from 28%); industrial investors held steady at 27%. The jump in financial sponsors means screening now sits squarely in the diligence workstream for most PE deals.
Useful boundary-setting from the Treasury. The 2025 report also spells out several situations that should, in principle, fall outside the regime: French companies solely developing (not yet operating) onshore wind or solar projects, or operating such projects below 50 MW cumulative capacity (offshore wind and overseas sites still need case-by-case review); software limited to after-sales or intra-group marketing, even when marketed by a group company abroad; training, HR, payroll, CRM or liberal-profession software, provided there is no customer in a regulated sector and no hosting, storage or transmission of data; purely recreational or advertising software; and data centres limited to simple colocation (making room space available) rather than genuine essential infrastructure.
2. The European Union in 2025: screening keeps deepening
The Commission’s Sixth Annual Report confirms the same two-track story at EU level: the bloc remains an attractive investment destination, but national screening and the EU cooperation mechanism are both being used more intensively.
Investment kept growing, but the mix shifted. The EU’s FDI stock grew 8.9% in 2025. Cumulative M&A stock rose 12% (20,695 to 23,078 deals) and greenfield stock rose 6.9% (27,069 to 28,930 projects), continuing a trend running since 2016. Annual flows were nearly flat (+0.2%), but that masks a real shift: M&A activity rose 4% in 2025 (after +8.5% in 2024), while greenfield investment fell a further 4.3% (after -8.3% in 2024). The Commission reads this as investors favouring acquisitions over new-build projects amid macroeconomic uncertainty.
The US still leads, but its edge is narrowing in the most sensitive deals. The US remained the top source of FDI into the EU (30% of acquisitions, 716 deals; 38% of greenfield projects, 699 projects), followed by the UK (24% of acquisitions; 20% of greenfield). India, the UAE and Canada posted the sharpest growth in M&A; China and Hong Kong and offshore financial centres pulled back. Germany led as a destination for M&A (469 deals, 20%), with France second with 339 transactions and third for greenfield investment with 215 projects. Manufacturing and ICT remained the two largest sectors for foreign M&A, with ICT overtaking manufacturing in 2025 (27% versus 26% of deals).
Every Member State now screens. Croatia, Cyprus and Greece adopted screening legislation in 2025, and Bulgaria and Ireland brought their regimes into operation, meaning all 27 Member States now have one. Six more States amended their existing rules. Nationally, authorities handled 4,773 applications and ex officio cases, up from 3,136 in 2024. Of the cases that were formally screened, outcomes stayed broadly stable: 87% cleared unconditionally, 9% with conditions, about 1% prohibited and 3% withdrawn – practically unchanged from 2024, which the Commission reads as screening becoming routine rather than more restrictive.
Cross-border coordination is the real story. Notifications under the Article 6 cooperation mechanism jumped 40% to 667, from 477 in 2024, the largest annual rise on record, submitted by 21 Member States (up from 13 in 2021). Austria, Spain, France and Italy together accounted for 65% of all notifications. Cases reaching an in-depth phase 2 review rose from 8% to 12% – concentrated in manufacturing (53%) and driven mainly by critical technologies, defence and aerospace – though the Commission still issued a formal opinion in under 2% of cases. Tellingly, 27% of notifications involved deals screened in two or more Member States, up from 19% in 2024, underlining why multi-jurisdictional filing strategies now need to be planned from the outset rather than bolted on.
3. 2026 and beyond: both frameworks are being reinforced
France: the 10% threshold now reaches more foreign-listed companies
A decree and order dated 30 July 2026, published on 2 August 2026, close a gap in the regime applicable to French companies listed abroad.
Non-EU/EEA investors have been subject to screening since 1 January 2024 when crossing 10% of the voting rights of a French company listed on a regulated market – but until now, that only caught EU/EEA-listed companies. The decree amends Article R.151-2 of the Monetary and Financial Code to extend the definition of « regulated market » to certain third-country exchanges, and the accompanying order names them: EU/EEA markets on ESMA’s list (which includes, inter alia, the NYSE and the NASDAQ), markets covered by a European Commission equivalence decision, and six specifically designated exchanges – London, SIX Swiss, Toronto, Singapore, Japan and Korea. The changes took effect on 17 August 2026, so minority stakes in French companies listed on any of these markets now need to be checked against the 10% threshold.
The EU: a new Regulation sets a common floor for national regimes
The EU adopted a new FDI Screening Regulation on 17 June 2026, replacing Regulation (EU) 2019/452. It entered into force on 26 July 2026 and will apply from 17 January 2028. Member States keep the final say on whether to clear, condition or block a given investment, but the Regulation requires every one of them to run a screening mechanism covering a shared minimum scope of transactions and sectors, extends screening to intra-EU investments ultimately controlled from outside the bloc, sets a harmonised 45-day initial review period, and allows retroactive review of deals that were never notified. It also strengthens the cooperation mechanism itself, giving more weight to comments from other Member States and the Commission.
For France, whose regime is already largely aligned, the main change will be scope: the common minimum list brings in dual-use goods under Annex I of Regulation (EU) 2021/821 (France currently controls the narrower Annex IV list), electoral infrastructure, and parts of the financial sector. Work to bring the French regime into line is already under way ahead of the 2028 application date.
What this means in practice. None of this points to screening becoming a blanket brake on foreign investment – most deals that get formally reviewed are still cleared, and outright prohibitions remain rare.
But the direction of travel is clear: more transactions in scope, more coordination between regulators, and less room to treat screening as an afterthought. Deals involving minority stakes, cross-listed targets, or activities touching more than one Member State are exactly where the French and EU reforms will bite first, so it is worth flagging screening early and lining up the French and EU analysis together rather than running them separately.
