Since 17 August 2026, a non-EU investor looking at a French company must ask a more precise question than “does a 10% stake require approval?”. The answer depends on three cumulative elements: who the investor is, what transaction is being carried out, and what the French target actually does. The revised rule is important because the 10% voting-rights route now expressly covers a French company whose shares are traded on certain recognised foreign regulated markets. It is not, however, a blanket approval requirement for every foreign purchase, every private company or every ordinary commercial activity.

In practice, an investor from the United States, the United Kingdom, Switzerland, Canada, Singapore, Japan or South Korea may need to notify the French Ministry for the Economy before crossing 10% in a sensitive French company listed on a qualifying market. For a transaction that falls only within this listed-company route, the notification can lead to a dispensation from the full authorisation request after ten working days unless the Minister objects. A control acquisition, branch purchase or 25% voting-rights investment follows a different route. This guide sets out the test, the new date, the filing timetable, the main closing protections and the consequences of getting the sequence wrong. It complements our French company law and cross-border business hub.

I. Does the 10% threshold apply to your French investment after 17 August 2026?

A. What changed for non-EU investors and foreign regulated markets?

The relevant regime is the French foreign investment screening system, commonly called “IEF” for investissements étrangers en France, meaning foreign investments in France. Its legal foundation is Article L. 151-3 of the French Monetary and Financial Code. The rule applies to foreign investments in an activity in France that participates in public authority or falls within protected areas linked to public order, public security or national defence. The opening words of the provision are direct: Sont soumis à autorisation préalable du ministre chargé de l’économie les investissements étrangers dans une activité en France. The official text is available in Article L. 151-3 of the Monetary and Financial Code.

The important 2026 development is found in Decree No. 2026-718 of 30 July 2026. The decree amended the regulatory definition of the 10% listed-company transaction. Article 1 states: Le 4° de l’article R. 151-2 est complété par la phrase suivante : « Constitue un marché règlementé pour l’application des présentes dispositions tout marché répondant à la définition figurant à la première phrase du I de l’article L. 421-1. Un arrêté du ministre chargé de l’économie fixe la liste des marchés regardés comme répondant à cette définition. » The spelling inside that quotation follows the published text. The measure does not create a general foreign-investment licence. It clarifies which foreign trading venues can count as a regulated market for this particular screening route.

The decree was published in the Official Journal of the French Republic, or JORF, on 2 August 2026. Its Article 2 provides for application from the eleventh working day after publication. The current version of the official code records the result as 17 August 2026. The date matters for a transaction timetable: a term sheet signed earlier does not by itself answer when the investment is legally made, and a subscription, transfer, conversion or closing may have different legal effects. The signing documents should therefore identify the exact step that will cause the voting-rights threshold to be crossed and should allocate responsibility for a filing that becomes necessary before completion.

The companion Order of 30 July 2026 concerning foreign investments in France supplies the market list contemplated by the decree. It begins: Les marchés réglementés mentionnés au 4° de l’article R. 151-2 du code monétaire et financier sont : The order covers regulated markets in a European Union Member State or a European Economic Area state appearing on the list maintained by the European Securities and Markets Authority, third-country markets recognised as equivalent by the European Commission, and named markets in the United Kingdom, Switzerland, Canada, Singapore, Japan and South Korea. The named examples are the London Stock Exchange, SIX Swiss Exchange, Toronto Stock Exchange, Singapore Exchange, Japan Exchange and Korea Exchange.

This produces two separate questions that are often confused. First, is the investor from a country treated as a third country for the relevant rule? Secondly, are the French company’s shares admitted to trading on a regulated market included in the ministerial list? A United Kingdom fund may be a third-country investor after Brexit while the London Stock Exchange may nevertheless be an eligible market under the order. Conversely, a company with an informal quotation, a private platform, an unrecognised multilateral venue or an ordinary over-the-counter listing should not be treated as satisfying the regulated-market condition without checking the legal status of the venue.

Article R. 151-1 also prevents a foreign investor from avoiding the regime by inserting a French or foreign holding company. It defines the investor as including, in the official wording, Toute personne physique de nationalité étrangère, Toute personne physique de nationalité française qui n’est pas domiciliée en France au sens de l’article 4 B du code général des impôts, Toute entité de droit étranger, and Toute entité de droit français contrôlée par une ou plusieurs personnes ou entités mentionnées au présent 1°, 2° ou 3°. The complete definition, including the control chain, appears in the official Section 1 covering Articles R. 151-1 to R. 151-3.

For a founder or investment committee, “investor” therefore means more than the name on the share-transfer agreement. Counsel should map the fund, its general partner, investment vehicle, co-investors, ultimate controllers and any person acting jointly with it. A French acquisition vehicle controlled by a non-EU entity can remain within the regime. A French national living outside France may also be treated as an investor under the statutory conditions. The analysis should use the legal control chain, not only the immediate shareholder shown on a draft share register.

The 2026 change is consequently narrow but commercially meaningful. It can bring a minority investment in a French listed company into the IEF process even when the investor has no intention of taking management control. That is relevant to a foreign founder seeking a strategic investor, a venture fund subscribing for a secondary round, a private-equity purchaser buying from several shareholders, and a listed company whose securities are traded on a foreign venue included in the order. The investor still has to pass the activity test: the 10% number is not sufficient on its own.

B. When do control, 25%, branch and sensitive activity tests combine?

The legal architecture should be read as a decision tree. Under the current Article R. 151-2 version in force from 17 August 2026, an investment may consist of four different operations: acquiring control of a French entity or a French-registered establishment; acquiring all or part of a French entity’s business branch; crossing 25% of the voting rights of a French entity; or crossing 10% of the voting rights of a French company whose shares are admitted to trading on a regulated market. The fourth route is the one changed in 2026, but the first three continue to matter for a non-EU investor in a private or unlisted business.

The 10% expression is “voting rights”, not simply the percentage of subscribed capital. The provision also refers to crossing the threshold directly or indirectly, alone or in concert. That requires a review of voting agreements, double-vote mechanisms, preferred shares, convertibles, options, shareholder arrangements and coordinated acquisition plans. A transaction that appears to be an 8% subscription can have a different result if a concerted party acquires another block, if a conversion changes voting rights, or if governance rights amount to control under the applicable company-law test.

Control is a distinct route. Article R. 151-1 refers to control under Article L. 233-3 of the French Commercial Code and, where that test does not establish control, to the relevant competition-law control concept. A buyer can therefore face an authorisation question below 25% if the contractual and voting arrangements give it decisive influence. Conversely, a passive investor crossing 10% in a listed French company may need to use the listed-company process even though it does not control the board. The transaction documents should not describe a stake as “minority” and stop there; the legal rights attached to it must be examined.

The target’s activity is the second filter. Article R. 151-3 lists activities covered by Article L. 151-3. The official Article R. 151-3 text includes defence-related activities, military goods, dual-use goods and technologies, entities holding national-defence secrets, information-system security services for certain protected operators, cryptology, interception equipment, gambling, pathogen-related activities and data processing whose compromise could affect protected activities. It also covers essential energy, water, transport, space, electronic communications, public security, health, food-security and critical-raw-material activities, as well as certain research and development projects.

That list is functional rather than purely descriptive. A software company may fall within it because it provides cyber-security services to an operator covered by the defence rules, because it develops a critical technology, or because it stores data whose compromise could affect an essential service. A medical-device company, satellite supplier, payment or communications provider, agricultural-input business or critical-minerals processor may require a careful classification. The investor should review the target’s contracts, customers, licences, subcontracting arrangements, data flows and research programme rather than rely on a broad industry label such as “software” or “healthcare”.

There are also European carve-outs. The relevant provisions exclude certain individuals who are nationals and residents of an EU or qualifying European Economic Area country, and entities whose entire control chain falls within the stated European conditions, from the 25% and 10% routes. That carve-out does not mean that every European-labelled holding structure is outside the regime. The nationality, residence, governing law and complete control chain must be checked. A non-EU parent above an EU subsidiary can change the outcome, and the control and branch routes need separate treatment.

Consider three examples. A United States fund acquires 10.4% of a French cyber-security company whose shares trade on the London Stock Exchange, and the company’s services support protected critical infrastructure. The investor, operation, qualifying market and sensitive activity may satisfy the IEF test; a notification should be planned before the threshold crossing. A German fund whose entire ownership chain satisfies the European conditions acquires 11% in the same company; the 10% carve-out may apply, but the team must still test control, sector-specific rules and the precise ownership chain. A Canadian company buys 15% of an unlisted French design agency with no protected activity; the 10% listed-company route is absent, and the IEF regime may not apply unless the transaction reaches control, a branch or another protected operation.

If the target’s classification is unclear, Article R. 151-4 provides a preliminary activity examination. The target, or an investor acting with the target’s agreement, can ask the Minister whether all or part of the activity falls within Article L. 151-3. The official Article R. 151-4 states that the Minister responds within two months. This is useful for a borderline business, but it is not a reason to defer the analysis until after signing. A two-month opinion and a subsequent authorisation timetable can exceed the commercial window in a competitive process.

The practical conclusion for Part I is clear. The 10% figure is a trigger for a defined type of transaction, not a conclusion about approval. Identify the investor and control chain, identify the legal transaction and voting-rights effect, verify the market against the 2026 order, classify the target’s actual activities, and then select notification or full authorisation. That sequence gives a foreign founder or board a defensible answer before a binding commitment is made.

II. What should a non-EU investor do before signing or closing?

A. Which filing route, documents and deadlines apply?

The first step is to decide whether the planned transaction is a listed-company 10% notification or a full authorisation request. Article R. 151-5 says, La demande d’autorisation d’un investissement étranger est déposée par l’investisseur. Where several investors belong to a control chain, one member may file for all members of that chain. For an investment falling under the 10% listed-company provision, the same article creates a specific procedural relief: the investor is dispensed from the authorisation request if the project has been notified in advance to the Minister for the Economy. The official text adds: Sauf opposition du ministre, la dispense de demande d’autorisation naît à l’issue d’un délai de dix jours ouvrés à compter de la notification. See Article R. 151-5 of the Monetary and Financial Code.

That ten-working-day mechanism is not an automatic approval of every deal described as a 10% investment. It is a dispensation from the full authorisation request for the qualifying operation, subject to prior notification and the absence of ministerial opposition. The notification should be treated as a pre-closing condition. It should not be filed on the assumption that the clock has started merely because an email was sent: retain the electronic submission, the acknowledgement, the complete-file correspondence and the date from which the statutory period is calculated.

The filing route is managed by the Foreign Investment Office of the Directorate-General of the Treasury, commonly called “DG Trésor”. Its official filing guidance directs applicants to the dedicated electronic platform and explains the complete-file acknowledgement, the ten-working-day treatment for qualifying listed-company notifications and the longer authorisation timetable. If the platform is unavailable, the page identifies the official contact route. Use the current official instructions rather than copying a form from an old transaction, because the list of evidence and electronic process can evolve.

A full authorisation request is different. Under Article R. 151-6, the Minister has 30 working days from receipt of the request to indicate whether the investment is outside the authorisation scope, authorised without conditions, or within scope but requires further examination to determine whether conditions can protect national interests. The text provides that silence at that stage is deemed a rejection. If further examination is needed, the refusal or conditional authorisation is issued within a further 45 working days from receipt of the first decision, and silence again is deemed a rejection. A transaction that needs a full request can therefore require up to two formal review stages, measured in working days and subject to a complete filing.

The filing package should be assembled before the share-purchase agreement is finalised. It normally needs a clear description of the investor and every relevant controller; ownership charts; the source and structure of funds; the target’s corporate information; the precise percentage of capital and voting rights before and after completion; the market on which the shares trade; the proposed governance rights; the target’s products, services, customers and contracts; the French activities that may be sensitive; the location and protection of data, technology and know-how; and the transaction timetable. The investor should also explain any public-sector connection or state-backed financing instead of leaving the administration to infer it from a complex structure.

Article R. 151-16 confirms the documentary and electronic discipline. The official Article R. 151-16 provides that a ministerial order fixes the documents and information supporting the preliminary activity review, the authorisation request and the notification, and that requests, notifications, declarations and related correspondence are transmitted electronically under the ministerial arrangements. In a cross-border deal, translate key documents consistently, maintain one ownership chart across the filing and transaction documents, and ensure that percentages are expressed as voting rights where the rule is based on voting rights.

The target can be central to the process even when the investor files. It controls factual information about customers, infrastructure, contracts and protected work. A target that wants a strategic investment should nominate a single disclosure team, prepare a sensitive-activity memorandum and agree on who will answer follow-up questions. A foreign investor should require cooperation covenants and access to relevant records as a condition to signing. If the target refuses to provide information needed for a complete filing, the parties should assume that the timetable is at risk rather than promising a fixed closing date.

A preliminary activity opinion can be sensible where the target is unsure whether a service falls within Article R. 151-3. The request can be made by the French entity or by the investor with the entity’s agreement, and the statutory response period is two months. It should be built into the timetable separately from the ten-working-day notification route. The two procedures answer different questions: the preliminary opinion asks whether the activity is covered; the notification or authorisation addresses the investment once the relevant facts are known.

Finally, the French review may interact with European cooperation. The DG Trésor explains that an EU-level notification can arise when a third-country entity sits in the control chain. That possibility does not turn every French IEF filing into a separate European authorisation, but it reinforces the need for a complete control chart and a realistic timetable. The investor should identify all jurisdictions in the chain, any public shareholders and the countries in which the target supplies essential services before the filing is submitted.

B. How should the transaction be protected against refusal, conditions and sanctions?

Approval is not always unconditional. Article L. 151-3 allows the authorisation to carry conditions designed to protect national interests. Article R. 151-8 explains the purpose of those conditions: ensuring the continuity and security of protected activities in France, protecting associated information, maintaining knowledge and know-how, adapting internal organisation and governance, and establishing reporting arrangements. The official Article R. 151-8 also allows the Minister, in the circumstances set out in the text, to condition authorisation on the sale of acquired shares or all or part of a protected business branch to a separate approved entity.

Potential conditions should influence valuation and governance negotiations from the outset. They may affect who can access source code or sensitive data, where particular functions are performed, how a board committee operates, the identity of a compliance officer, the reporting provided to the administration, or the separation of a protected business. A buyer should not treat a conditional authorisation as a routine administrative formality. The condition may require a different operating model, a ring-fenced business, or a post-closing divestment plan. The seller and investor should agree who bears the cost and who has the right to terminate if the conditions are unacceptable.

The Minister may refuse an investment when conditions would not sufficiently preserve the protected national interests. Under Article R. 151-10, the administration may also consider the investor’s links with a foreign government or public body, and the provision identifies certain serious criminal, tax and prior-compliance circumstances relevant to refusal. A foreign founder should therefore disclose state ownership, public financing, sovereign-fund participation, government contracts and regulatory history accurately. A complex structure is not automatically disqualifying, but unexplained links create avoidable review risk.

The share-purchase agreement should contain an explicit IEF condition precedent. It should state whether completion requires a written authorisation, a written confirmation that the investment is outside scope, or the expiry of the ten-working-day period without opposition following a valid notification. It should prohibit the transfer of voting rights, the payment of the purchase price, the appointment of directors and any other step that would complete the investment before the relevant clearance. It should include a long-stop date long enough to cover a 30-working-day first phase and a possible 45-working-day second phase when full authorisation is required.

The agreement should also allocate filing control. The investor may be the statutory filer, but the target normally supplies the activity evidence. The parties should agree who signs, who responds to information requests, who pays filing and separation costs, who may communicate with public authorities, and what happens if the authority proposes conditions. A seller warranty should cover the target’s sensitive activities, government contracts, protected data, licences, prior foreign-investment filings and any informal concert arrangement. An investor warranty should cover its ownership chain, funding, controllers and public-sector links. These provisions make later explanations coherent.

Closing without the required authorisation can expose the investor and the target to more than a delayed transaction. Article L. 151-3-1 provides administrative police powers where a foreign investment was made without prior authorisation. The Minister may order the investor to submit an authorisation request, restore the previous situation at its own cost or modify the investment; those orders can carry a daily penalty, and protective measures may be taken where national interests are compromised or at risk. The official Article L. 151-3-1 is therefore a central reason to preserve the status quo until the process is complete.

There is also a financial sanction. Under Article L. 151-3-2, a sanction may follow an investment made without prior authorisation, a fraudulently obtained authorisation, a breach of conditions or a failure to comply with an injunction. The maximum amount is the highest of the double of the irregular investment, 10% of the annual pre-tax turnover of the company carrying on the protected activity, five million euros for a legal entity or one million euros for an individual, subject to the statutory proportionality rule. Article R. 151-14 separately caps a daily penalty imposed under Article L. 151-3-1 at 50,000 euros; see the official provisions on the enforcement penalty.

Those consequences also affect financing. A lender may require evidence that the IEF condition has been satisfied before funding is drawn. A board should record why the transaction was treated as a notification or a full authorisation, who approved the classification and what evidence supports the market and activity tests. A listed company should coordinate its public disclosures with the filing strategy and its ordinary market obligations. The IEF process is a national-security review; it does not replace corporate approvals, securities-market obligations, merger-control analysis, export controls, data rules or sector licences that may apply to the same investment.

A practical pre-closing checklist for a non-EU investor should contain at least the following actions:

• Identify each investor, controller, co-investor and concert party, including any French vehicle and any public-sector connection.
• Calculate voting rights before and after completion, including indirect holdings, conversion rights and governance arrangements.
• Verify whether the French company’s shares trade on a regulated market named or recognised under the 30 July 2026 order.
• Map the target’s products, services, customers, infrastructure, data and research against every relevant category in Article R. 151-3.
• Separate the 10% listed-company route from the control, branch and 25% routes; do not use the ten-day notification shortcut for a transaction that needs full authorisation.
• Ask for a preliminary activity opinion when the classification is genuinely uncertain and the target can cooperate.
• Prepare a consistent electronic dossier, including the ownership chart, source of funds, business description, voting-rights calculation and transaction documents.
• Make notification, authorisation or a written out-of-scope analysis a condition precedent, with evidence of receipt and completeness retained in the deal file.
• Set a long-stop date and a no-closing covenant that respects the applicable working-day period and any ministerial follow-up.
• Agree in advance how the parties will handle conditions, refusal, divestment requirements, public communications and termination costs.

Take a hypothetical transaction involving a United States investment vehicle buying 10.2% of a French company listed on the London Stock Exchange. The target develops security software used by an operator of essential infrastructure. The investor should first prove that the London venue is included in the ministerial list and that the target’s actual services fall within the sensitive categories. It should then establish that the fund and its controllers are third-country investors, calculate the voting rights on a fully converted basis where relevant, and determine whether any shareholder agreement gives additional influence. If the transaction is genuinely the 10% listed-company operation, the notification should be made before completion and the fund should wait through the ten-working-day period without opposition. If the rights amount to control or the deal also crosses a separate route, the parties should plan for full authorisation instead.

Now change the facts. The target is a private French company, the investment is 20%, and the activity is not sensitive. The new 10% foreign-market rule does not apply because the shares are not admitted to a qualifying regulated market, and the 25% route has not been reached. That does not answer every legal question, but it may mean the IEF authorisation system is not engaged. If the same investor acquires 30% or contractual control, the analysis changes. If the private company supplies protected systems or holds critical data, the activity test must still be documented before relying on the apparent absence of a trigger.

After clearance, the file should not be closed and forgotten. Article R. 151-11 states that completion of an authorised investment must be declared under conditions set by ministerial order. The official Article R. 151-11 should be added to the completion checklist. Keep the authorisation or notification record, the final ownership chart, proof of completion, any conditions-monitoring reports and the post-closing declaration. If the ownership chain changes later, a new analysis may be needed; an initial clearance is not a permanent exemption from every future transaction.

The safest process is therefore front-loaded. A foreign investor should bring the target, French counsel, financial advisers and lenders into the same timetable before signing. The file should answer the administration’s three questions in plain language: who is investing, what exactly will happen to the French entity, and why is the activity inside or outside the protected perimeter? A precise answer is more valuable than a generic statement that the buyer is taking “only a minority stake”.

Conclusion

Since 17 August 2026, a non-EU investor can face French foreign-investment screening when crossing 10% of the voting rights in a French company whose shares are traded on a qualifying regulated market, including certain recognised markets outside France. The threshold alone is not enough. The investor status, the exact operation, the market, the voting-rights calculation and the target’s sensitive activity must all be checked.

For a transaction that falls only within the 10% listed-company route, prior notification may produce a dispensation from the full authorisation request after ten working days without ministerial opposition. Control, a branch acquisition or 25% of voting rights can require the ordinary authorisation procedure, with 30-working-day and possible 45-working-day stages. The transaction should not close until the relevant clearance is documented. A properly drafted condition precedent, a complete filing and a preserved evidence trail protect the investor, the target and the board from avoidable enforcement risk.

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