Chinese Investment in France: Legal Guide for Chinese Companies and Investors

Short answer. Investment by a company or person established outside the EU and the EEA in a sensitive activity in France requires prior authorisation from the Minister for the Economy (Article L. 151-3 of the Monetary and Financial Code) on acquiring control, all or part of a line of business, or 25% of the voting rights, 10% for a listed company (Article R. 151-2). The minister answers within thirty working days of a complete file, silence meaning refusal, then within forty-five working days of notification of an in-depth review (Article R. 151-6); the European cooperation mechanism (Regulation (EU) 2019/452) may lengthen the review. An acquirer that has received financial contributions from the Chinese State may also have to notify the transaction to the Commission under Regulation (EU) 2022/2560 on foreign subsidies, depending on the thresholds specific to each type of transaction. A commitment made without authorisation is void (Article L. 151-4) and exposes the investor to orders and a fine (Articles L. 151-3-1 and L. 151-3-2).

Chinese groups, funds and private investors acquiring French companies, real estate or industrial assets face a screening regime that has been tightened every year since 2019, a compliance environment shaped by EU sanctions and export controls, and a corporate law that differs on essential points from PRC practice. Most difficulties do not come from the French rules themselves but from timing: the authorisation is requested too late, the commitments are discovered at signing, the target’s sensitive activity is identified after closing.

This page sets out, for Chinese investors and their advisers, the questions to settle before signing, and how the firm assists them in English, as French counsel coordinating with their lawyers in China, Hong Kong or Singapore.

The risk: prior authorisation, commitments and the EU cooperation mechanism

As a non-EU investor, a Chinese acquirer triggers French screening from 25% of voting rights (10% in listed companies) or on acquiring control or a line of business in a sensitive sector. Sensitive sectors are broadly construed: they include critical technologies (artificial intelligence, semiconductors, quantum, energy storage, biotechnologies), data hosting, food security, critical raw materials and, of course, defence and dual-use goods. Regulation (EU) 2019/452 allows other Member States and the Commission to comment on the transaction, which extends the timetable.

Beyond screening, the transaction is examined in light of EU sanctions and export control rules: a French target whose products fall under the dual-use regulation, or whose customers include designated entities, raises questions of compliance that the acquirer inherits. The Foreign Subsidies Regulation (EU) 2022/2560 may also require notification where the acquirer received financial contributions from the Chinese State.

The legal answer: sequence the deal around the authorisation

The firm recommends a request for prior opinion as soon as the target is identified, so that the screening question is settled before the price is negotiated. The share purchase agreement then provides for authorisation as a condition precedent, allocates the risk of refusal or of burdensome commitments, and organises the information flow with the Treasury Directorate. Commitments most often concern the continuity of supplies to French customers, the location of research and data, and governance rights.

On the corporate side, the acquirer must anticipate French rules on works council information and consultation, on directors’ liability and on the protection of minority shareholders, which differ from the structures familiar to Chinese groups.

How the firm works

The firm acts as French counsel, in English, coordinating with the investor’s lawyers in China or Hong Kong: characterisation of the target’s activity, request for prior opinion, authorisation file and commitments, sanctions and export control review, drafting of the acquisition documents and, after closing, follow-up of the commitments given to the Ministry.

It also assists Chinese companies already established in France in their commercial disputes, in the enforcement of French or Chinese decisions and in arbitration, and Chinese exporters facing EU customs measures.

Typical cases handled

The situations below are illustrative, anonymised scenarios. They show when the firm steps in and what the work consists of.

Acquisition of a French industrial sensor manufacturer

A Chinese group acquires a company whose sensors are used in critical infrastructure. The firm obtains a prior opinion, prepares the authorisation and negotiates commitments on supply continuity and data location.

Minority investment by a Chinese fund in a biotech company

The fund crosses 25% of voting rights. The work bears on the characterisation of the activity, on the authorisation and on governance rights compatible with the commitments.

Post-closing discovery of a dual-use product line

After closing, the target is found to export items listed in the dual-use regulation. The firm organises the export licences and the compliance programme required.

The general framework for the screening procedure, common to all non-EU investors, is set out on our page on foreign investment in France.

The firm also acts in international sanctions law and in international commercial litigation.

The general screening framework is set out in detail in our article Foreign investment control in France: thresholds, sectors, timescales.

This work is part of the matters the firm handles in international trade law.

Frequently Asked Questions

Does the French screening regime apply to Chinese investors?

Yes. A Chinese investor is an investor from outside the European Union and the European Economic Area, so the full regime applies, including the twenty five per cent voting rights threshold and the ten per cent threshold for companies listed on a French regulated market. Filings from certain jurisdictions attract closer scrutiny in the sensitive sectors, and the examination is more likely to go to a second phase and to end with conditions. That is a reason to file early and to present the industrial rationale properly, not a reason to avoid the process, since an unauthorised investment is void.

Which structures are used for a Chinese acquisition in France?

Most often a French acquisition vehicle, frequently a société par actions simplifiée, held by a European or Hong Kong holding company, financed by a mix of equity and shareholder loan set by the tax analysis. The chain of control has to be transparent for the screening filing, so a structure designed to obscure the ultimate investor works against the transaction. Joint ventures with a French partner are common in industrial sectors, and the shareholders agreement then does most of the work: governance, deadlock, transfer restrictions and exit.

How are funds transferred, and what should be anticipated?

Funds move under Chinese outbound investment rules as well as French ones, and the timetable of the outbound approvals is often the real constraint on the closing date. On the French side the bank runs its own checks on the origin of the funds, on the ultimate beneficial owner and against sanctions lists, and those checks take time when the ownership chain is long. Anticipating them means opening the account and supplying the corporate documents weeks before signing rather than in the days before completion.

What do French sellers ask for in the sale agreement?

Certainty of funds and certainty of closing. Sellers ask for evidence that the money is available and transferable, a limited set of conditions precedent, and a clear allocation of the regulatory risk, including who bears the consequences if screening authorisation is refused or granted subject to conditions. Break fees, escrow of part of the price and security for warranty claims are negotiated in that light. An offer that is higher but conditional frequently loses to one that is lower and deliverable.

How long does an acquisition take?

Between three and eight months for a private company, driven by three timetables running in parallel: the transaction itself, the screening procedure where it applies, and the employee information and consultation steps. A merger control filing extends it further. The realistic approach is to build the calendar backwards from the regulatory steps and to keep the commercial negotiation ahead of them, because every week lost in the early documents is a week added at the end.

Which employee steps are mandatory?

Where the target has a social and economic committee, it must be informed and consulted before the decision is taken, and that process cannot simply be compressed. In companies below the statutory size thresholds, employees have a prior right to be informed of a proposed sale of the business or of a controlling interest so that they may make an offer of their own. Failing to comply exposes the transaction to challenge. These steps are scheduled at the outset, because buyer and seller cannot waive them between themselves.

Is a Chinese investor treated differently?

The text does not distinguish by nationality among investors established outside the European Union: Article L. 151-3 of the Monetary and Financial Code, as in force since 24 May 2019, makes foreign investments in the activities it covers subject to prior authorisation, without listing any countries. In practice, the review of a file concerning a sensitive technology comes with closer examination of the chain of control and of links with public entities, which lengthens the timetable and multiplies requests for further information. The useful response is therefore not legal but documentary: anticipate these questions by producing the full organisation chart and the nature of the shareholders at the outset, rather than letting them emerge step by step.

How is the chain of ownership documented when it goes back to China?

This is the most demanding part of the file. The authorities expect the chain to be traced up to the beneficial owners, including through structures in Hong Kong, Singapore or intermediate jurisdictions, with the corresponding registration documents, up to date, translated and, where required, legalised. Three difficulties recur: documents in Chinese whose sworn translation takes several weeks, structures whose articles do not clearly show who has control, and holdings by public entities or regional funds that call for an explanation. These documents are gathered at the start of the project, never at the time of filing, and the time needed to obtain them in reality governs the whole timetable.

Do export controls apply in addition to investment screening?

Often, and they are independent of it. Where the target holds dual-use technologies or licences issued by foreign authorities, the acquisition may trigger, beyond the French authorisation, notification obligations or new licences, sometimes subject to a foreign law because of the American component of the technologies concerned. The risk is not theoretical: an acquisition authorised in France may prove impossible to operate if the target loses access to a component or a licence after the change of control. Due diligence must therefore cover licences and their change of control clauses, not only commercial contracts and tangible assets.

What happens to the transaction if authorisation is refused?

It cannot be completed, and attempting to carry it out regardless leads nowhere. Article L. 151-4 of the Monetary and Financial Code, as in force since 24 May 2019, renders null and void any undertaking, agreement or contractual clause that directly or indirectly carries out an investment subject to authorisation without that authorisation having been obtained. Article L. 151-3-2 adds a sanctions regime covering completion without authorisation, authorisation obtained by fraud and failure to comply with conditions, allowing the Minister to issue injunctions, impose penalties and take measures affecting voting rights. The agreement must therefore provide for the possibility of refusal, the return of deposits and the allocation of costs incurred.

How can the French seller be reassured about the buyer’s strength?

This is often the real commercial difficulty, and it is addressed through contractual mechanisms rather than statements. Three tools work. Escrow of part of the price with a third party in France, which makes the availability of funds verifiable. A bank guarantee issued by a first-rank institution established in Europe, which avoids the difficulties of enforcing a guarantee issued outside the Union. And a precise timetable clause, stating who files what, within what time, and what happens at each missed deadline. These mechanisms cost little and remove most of the reluctance, far better than a general presentation of the acquiring group’s financial standing.

Should French law or an arbitration clause be chosen?

For the acquisition of a French company, French law is the natural choice, and corporate disputes fall within the jurisdiction of the French courts. An arbitration clause remains useful for the undertakings attached to the transaction, such as the warranty of assets and liabilities, cooperation agreements and shareholders’ agreements, particularly where some obligations rest on group entities located outside Europe. The choice is then made on a practical criterion: where the assets that will secure enforcement are located. An arbitral award benefits from a very broad international recognition regime, whereas a French judgment will have to go through a local procedure. This question is settled at the drafting stage, never once the dispute has arisen.

Must every Chinese investment in France be authorised?

No, far from it. Only investments in the sensitive activities listed in the Monetary and Financial Code and its implementing texts, above the applicable thresholds, require authorisation. A Chinese investor falls under the regime for third-country investors, and therefore lower thresholds than a European investor, but nationality alone never triggers screening: it is the target’s activity that matters. The purchase of a building by a private individual, for example, falls outside the regime, which does not exempt it from tax questions or from anti-money laundering due diligence obligations. Characterisation is done target by target.

How long does authorisation take for a Chinese investor?

Thirty working days for the first phase, up to seventy-five working days where the file goes to an in-depth review. These periods run only from the complete file, and that is the most frequent source of error in transaction timetables: reconstructing the chain of ownership up to the beneficial owner, and translating it, often takes as long as the review itself. Including the request for prior opinion, the prudent rule is to allow three to five months between identifying the target and obtaining authorisation. The signing timetable and the conditions precedent are built on that duration, not on the regulatory periods alone.

Does the firm work in English with counsel in China?

Yes. The firm acts as French counsel, in English, coordinating with the investor’s lawyers in China, Hong Kong or Singapore, and handles the exchanges with the Treasury Directorate. This division of work is the one that functions best: local counsel document the ownership structure and the Chinese outbound investment approvals, while the firm translates that reality into the categories of French law and speaks for the investor before the administration. One practical point matters as much as the law: foreign corporate documents require translation and sometimes legalisation, formalities best started from the first exchanges.

Matters in this field are handled by Hervé Guyader, avocat at the Paris Bar, Doctor of Law. Page updated on 2 November 2026.