FDI Screening in France (2024): What Does the 2025 Annual Report Mean for Deal Execution?
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The publication of the 2025 annual report by the Directorate General of the Treasury should not be viewed as a purely statistical exercise.
It reflects a deeper structural shift: FDI screening in France has become a central component of deal execution risk in transactions involving sensitive assets.
In practical terms, FDI screening is no longer a compliance step at the end of a transaction process. It is now a core execution variable that directly affects feasibility, timing, valuation, and structuring.
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A Structural Shift: From Regulatory Control to Transactional Constraint
The year 2024 confirms a broader trend shaped by geopolitical tensions, supply chain reconfiguration, and the strengthening of economic sovereignty policies.
Within this context, the scope of FDI screening in France continues to expand beyond traditional defense and national security sectors. It now encompasses a wide range of strategic activities, including:
• critical technologies (cybersecurity, semiconductors, artificial intelligence)
• healthcare and biotechnology
• energy and essential infrastructure
• food security
• research and development activities, including at early-stage levels
This expansion reflects a fundamental evolution. The qualification of an asset as “sensitive” increasingly depends not only on its current activity, but also on its strategic potential.
For investors, this creates a structural shift in risk assessment. A transaction may be legally feasible, yet operationally constrained or politically sensitive.
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2024: Increased Activity Without Apparent Disruption
The 2024 data shows a clear increase in activity:
• 392 filings, compared to 309 in 2023
• 337 decisions issued
• 182 authorizations, including 99 subject to conditions
• 73% of preliminary rulings concluding that the transaction fell outside scope
• 65% of investors originating from outside the European Union
At a superficial level, the system appears stable and proportionate.
However, from a transactional perspective, these figures indicate a more significant development. The increase in filings and the high proportion of conditional approvals reflect a more intensive review of genuinely sensitive transactions.
The key issue is not the limited number of formal refusals. It lies in the administration’s ability to impose substantive constraints, and in investors’ increasing tendency to withdraw transactions in anticipation of such constraints.
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Conditional Approvals: A Tool for Structuring Transactions
In 2024, more than half of the approvals were granted subject to conditions.
These conditions are not marginal adjustments. They directly shape the structure of the transaction.
They typically address:
• the continuity of strategic activities within France
• the protection of sensitive technologies and know-how
• governance arrangements, including voting rights and access to information
• the implementation of monitoring and reporting mechanisms
In practice, these requirements may lead to significant changes in:
• the scope of the acquisition
• the ownership structure
• shareholder agreements and governance frameworks
FDI screening thus operates as a regulatory mechanism that directly influences the economic substance of the deal.
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A Legal Timeline, but an Operational Process
Formally, the procedure is structured around two phases:
• an initial review phase of 30 business days
• a second phase of up to 45 additional business days
However, this legal framework does not fully capture operational reality.
The actual timeline depends on several factors:
• the completeness and quality of the filing
• the early identification of sensitive issues
• the ability to establish a constructive dialogue with the authorities
In this context, the primary risk is not refusal, but timing uncertainty and process elongation, which can directly affect deal execution.
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Continued Expansion of Scope
The report confirms several structural developments.
Research and development activities are now fully within scope, even before industrial deployment. There is also increased scrutiny of dual-use technologies.
FDI screening applies to distressed companies as well. In 2024, 17 decisions involved entities undergoing restructuring or insolvency proceedings. This requires coordination between regulatory timelines and the urgency of restructuring processes.
These developments reflect a shift toward earlier and more proactive intervention by the authorities.
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A Growing European Dimension
The cooperation mechanism established by the Règlement (UE) 2019/452 continues to expand.
In 2024, 1,808 transactions were subject to information exchanges between the European Commission and Member States.
This framework promotes convergence in national practices and strengthens coordination across jurisdictions. The ongoing revision of the regulation aims to generalize national screening mechanisms and enhance their effectiveness.
As a result, FDI risk is increasingly European in nature, rather than purely domestic.
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Apparent Maturity, Increasing Complexity
Over recent years, the system has shown relative stability in terms of volume and improved predictability for investors.
However, this apparent maturity conceals a growing level of complexity:
• expansion into civilian strategic sectors
• increasing sophistication of imposed conditions
• stronger integration of political considerations into transaction analysis
The system is more predictable in form, but more demanding in substance.
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A Structural Consequence: FDI Screening as an Execution Variable
The 2025 report confirms a fundamental shift.
FDI screening in France is no longer a regulatory filter. It is a core component of transaction economics.
It directly affects:
• deal feasibility
• execution timelines
• valuation
• legal and financial structuring
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Operational Implication: Integrating State Risk Upstream
For investors and M&A advisors, this shift requires a change in approach.
FDI risk must be addressed at the earliest stages of the transaction. This involves:
• precise qualification of sensitive activities
• assessment of sovereignty-related risks
• anticipation of potential conditions
• development of a structured engagement strategy with authorities
Without such an approach, the risk is no longer purely regulatory. It becomes a deal execution risk.
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Relians – Strategic Advisory for Sensitive Transactions
For over 20 years, Relians has advised on transactions where State-related factors are decisive.
Our approach is based on a clear operational principle: sensitive transactions cannot be secured through legal analysis alone. They require the integration of public authority logic into their structuring.
We support our clients in:
• assessing their exposure to FDI screening
• anticipating regulatory and political expectations
• structuring transactions compatible with sovereignty constraints
• securing execution in highly regulated environments
In this context, FDI screening is not a step in the process. It is a defining parameter of execution.
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Our Expertise
For over 20 years, Relians, a strategic and institutional advisory firm, has been assisting companies facing these challenges. Relying on a deep understanding of the applicable regulations, administrative practices, and official guidelines, we help our clients structure their transactions securely, in full compliance with regulatory requirements, and in a spirit of constructive dialogue with the French authorities.
Relians, a specialist in FDI screening in France.
