Is the European framework for FDI screening reshaping how transactions are assessed in France and across the EU?

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The European framework for FDI screening is entering a new phase. The recent political agreement between the European Parliament and the Council reflects a clear shift: foreign investment control is no longer a fragmented national tool but a coordinated pillar of European economic security.

For investors and companies operating in France, this evolution does not replace the national regime. It transforms the way transactions must be analysed, structured and anticipated within a broader European context.

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A turning point in European economic security

The European framework for FDI screening marks a structural change in how the European Union approaches strategic investments. For the first time, all Member States will be required to implement an operational screening mechanism based on a shared foundation.

This development is driven by converging dynamics:

• intensification of geopolitical competition

• strategic acquisitions of critical infrastructure

• acceleration of the race for advanced technologies

• growing focus on economic sovereignty

FDI screening is now part of a broader regulatory ecosystem that includes export controls, foreign subsidies regulation and instruments related to critical raw materials.

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No “European CFIUS”: a coordinated system, not a federal one

A key clarification is required. The European framework for FDI screening does not create a centralized authority comparable to the Committee on Foreign Investment in the United States.

Decision-making power remains at the level of Member States. France, through its national regime, retains full authority to approve, condition or block transactions.

The role of the European Union is different:

• structuring cooperation between Member States

• facilitating information sharing

• defining a minimum common standard

• reducing regulatory asymmetries within the Single Market

The European framework for FDI screening should therefore be understood as a convergence mechanism rather than a supranational control system.

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The three pillars of the European framework for FDI screening

The future regulation is built around three core pillars that will directly affect transaction analysis.

First, all Member States will be required to establish a national FDI screening mechanism. This eliminates regulatory gaps and prevents strategic investments from being routed through jurisdictions with weaker controls.

Second, a minimum list of sensitive sectors will be introduced at EU level. These include:

• defence and dual-use items

• critical and “hyper-critical” technologies

• critical raw materials

• key transport and digital infrastructure

• electoral systems

• certain systemic financial infrastructures

This list will act as a baseline that national regimes, including France, must cover.

Third, procedural convergence will be strengthened. The European framework for FDI screening will introduce:

• more coordinated timelines

• harmonised procedural safeguards

• reinforced cooperation between Member States and the Commission

This is particularly relevant for cross-border transactions involving assets or activities spanning several jurisdictions.

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A strong French regime facing targeted adjustments

France already operates one of the most mature screening systems in Europe under the Monetary and Financial Code.

As a result, the European framework for FDI screening does not represent a disruption but an extension. However, adjustments are expected.

On the sectoral side, certain areas will likely receive increased attention, particularly:

• electoral infrastructure

• systemic financial market infrastructures

• emerging strategic technologies

France may need to refine its list of sensitive activities to align with the European baseline while maintaining its ability to go beyond it where national interests require.

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Greenfield investments: a structural shift

One of the most significant evolutions introduced by the European framework for FDI screening concerns the treatment of greenfield investments.

Historically, the French regime has focused on:

• acquisitions of control

• voting rights thresholds

• transfers of business lines

The European approach expands this logic. Certain greenfield projects may now fall within the scope of FDI screening when they involve strategic assets or capabilities.

Typical examples include:

• construction of critical infrastructure

• deployment of sensitive data systems

• establishment of industrial facilities in strategic sectors

This represents a material shift. FDI screening is no longer limited to existing corporate structures but extends to the creation of new strategic capabilities.

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More predictability, but broader exposure

For investors and companies, the European framework for FDI screening produces a dual effect.

On one hand, it enhances predictability:

• clearer common definitions

• more consistent criteria across jurisdictions

• improved transparency of procedures

On the other hand, it expands regulatory exposure:

• more transactions potentially in scope

• increased scrutiny of complex structures

• broader interpretation of strategic sensitivity

In practice, assessing FDI risk now requires more than verifying thresholds. It involves analysing:

• value chains

• data flows

• technological dependencies

• industrial positioning

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FDI screening as a transaction variable

The European framework for FDI screening reinforces a fundamental shift already visible in France: FDI is no longer a compliance checkpoint but a structuring variable of transactions.

It can influence:

• deal feasibility

• valuation assumptions

• execution timelines

• negotiation dynamics

Transactions that ignore this dimension risk delays, conditions or, in some cases, rejection.

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The role of specialised advisors

In this evolving environment, a purely legal analysis is insufficient. Effective navigation of the European framework for FDI screening requires a combination of:

• legal expertise

• sector-specific understanding

• knowledge of administrative practice

• ability to engage with public authorities

Advisors must be able to anticipate how authorities will interpret a transaction, not only how the law formally applies.

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Relians — Strategic positioning

At Relians, we support companies and investors in integrating FDI screening into their transaction strategy.

Our approach covers:

• early-stage exposure assessment

• qualification of sensitive activities

• economic security risk mapping

• preparation and management of filings

• design of mitigation strategies

We also assist clients in anticipating the impact of the European framework for FDI screening on future investments, particularly in relation to greenfield projects and cross-border operations.

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Turning regulatory constraints into strategic leverage

The rise of the European framework for FDI screening reflects a structural reality: capital flows are increasingly intertwined with strategic interests.

For companies and investors, the objective is not to circumvent this framework but to integrate it into decision-making.

When properly anticipated, FDI screening can become:

• a tool for structuring transactions

• a lever for securing approvals

• a factor of credibility in discussions with authorities

In this context, mastering the European framework for FDI screening is no longer optional. It is a core component of any transaction involving strategic assets in France and across the European Union.

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Strategic exposure diagnostic

Before assessing a transaction solely through legal thresholds, it is critical to determine whether it may fall within the scope of the European framework for FDI screening from a strategic perspective.

Some transactions formally outside the scope may still attract scrutiny depending on sector sensitivity, investor profile or geopolitical context.

Assess your exposure to FDI screening in France and Europe.

• Identify whether your transaction may fall within scope
• Anticipate potential regulatory risks
• Clarify whether a notification strategy should be considered
• Understand how the European framework for FDI screening may affect your deal

A structured diagnostic helps position your transaction early and avoid execution uncertainty.

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Strategic support — Relians

At Relians, we support investors and companies in navigating the European framework for FDI screening as a strategic transaction parameter.

Our approach combines legal qualification, economic security analysis and institutional positioning to secure transaction outcomes.

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FAQ — European framework for FDI screening

What is the European framework for FDI screening?

It is a coordinated EU-level mechanism that sets minimum standards for national screening regimes, strengthens cooperation between Member States and expands the scope of transactions subject to review.

Does the European Union approve or block transactions directly?

No. Decisions remain at national level. Member States, including France, retain full authority to authorize, condition or reject investments.

Will all EU countries apply FDI screening rules?

Yes. The European framework for FDI screening requires all Member States to implement an operational screening mechanism.

Are greenfield investments now covered by FDI screening?

Potentially. The new framework expands the scope to include certain greenfield projects in strategic sectors such as infrastructure, data or critical technologies.

Does this increase regulatory risk for investors?

Yes. While the framework improves predictability, it also broadens the range of transactions that may fall within scope, requiring earlier and more strategic assessment.

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“FDI screening in Europe is no longer a regulatory formality — it is a strategic filter that shapes how transactions are structured, assessed and ultimately approved.”