Decoding French Legal Reforms: What International Businesses Need to Know

Friday, 31 May 2024

France is renowned for its scenic views, culinary delights, and rich cultural heritage, making it a sought-after destination for tourists and expatriates alike. But its appeal doesn't end there, it's also a thriving hub for international business. Before expanding your business into France, however, there is a lot to consider. French business law is constantly changing, and staying abreast of the latest developments is crucial for making informed decisions regarding business ventures in France. This guide sheds light on recent legal changes impacting international businesses and investors eyeing the French market.

GDPR: 2018 Changes to EU Data Protection Laws

Since its introduction in 2018, the General Data Protection Regulation (GDPR) has become a fundamental aspect of data policies for businesses operating within the EU. Its influence has also extended to businesses outside EU jurisdictions, as many have adopted stricter data protection measures to accommodate their EU customers. In France, GDPR regulations were integrated into national law through amendments to the French Data Protection Act (Loi Informatique et Libertés). Thus, if you're operating a business in France, ensuring your data protection policies align with GDPR standards is essential. Compliance with these regulations is imperative for businesses to maintain trust with customers and avoid potential legal repercussions.

PACTE Law: 2019 Changes to French Patents

The PACTE law, introduced in 2019, brought about significant changes to patent applications and the protection of intellectual property in France. Among these changes, provisional patent applications were introduced, providing a cost-effective option for intellectual property protection, which proved particularly beneficial for SMEs and startups. Additionally, the duration of utility certificates was extended to ten years, with the option for conversion into full patents, offering greater flexibility. Furthermore, the scope of examination for French patent applications was expanded, enhancing the credibility of French patents globally. These reforms have enhanced the accessibility and robustness of the intellectual property framework in France, making it more appealing for international businesses looking to expand into the country.

FDI: 2024 Changes to Foreign Investments in France

In 2021, France revised its Foreign Direct Investment (FDI) regulations to enhance transparency and safeguard national interests, particularly in critical sectors like defense, energy, telecommunications, and healthcare.In 2024, France further fortified its FDI control regime with Decree No. 2023-1293. This permanent update now extends to non-European investors acquiring over 10% of voting rights in listed French companies. It aslo imposes stricter regulations on takeovers of branches of entities governed by foreign law involved in sensitive activities. The scope of FDI has also increased to include activities related to raw materials, research and development in low-carbon energy, prison security, and more.

France's FDI revisions demonstrate its commitment to safeguarding strategic assets and technologies. International businesses and investors must conduct thorough due diligence and understand these changes to ensure regulatory compliance.

Staying Up To Date With French Business Law

Navigating the legal landscape in France presents both challenges and opportunities for international businesses and investors. From recent reforms in tax compliance and data protection to the evolving foreign investment control regime, staying abreast of regulatory changes is paramount. By understanding and adapting to these developments, businesses can mitigate risks, ensure compliance, and capitalise on investment opportunities in France.

However, success hinges on thorough due diligence, adherence to regulatory requirements, and a proactive approach to legal compliance. With the right knowledge and strategies in place, international businesses can navigate France's legal environment effectively.

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