Chinese investment in France: what the October 2026 reform changes

October 27, 2026  | William MAK

The 76-article text was adopted by the National Development and Reform Commission (NDRC) on 15 October 2026, signed on 16 October and made public on 22 October. It brings three major changes. First, individuals resident in China are now directly subject to the regime, and no longer only when they invest through a foreign company. Second, the USD 300 million threshold disappears for investments made through offshore subsidiaries: they must be reported whatever their amount. Third, the investor must inform the NDRC when a foreign State or partner requires it to provide technology or data or to dispose of assets, if that requirement threatens China’s interests or national security.

For a French seller, target company or partner, the consequences are practical. Any deal with a Chinese investor must build these formalities into its timetable and contract documentation, including where the acquisition in France goes through a holding company in Hong Kong or Europe.

The key points

• When? The reform applies from 1 December 2026. No transitional regime is provided for transactions in progress.
• Who? Companies, other organisations and, from now on, individuals resident in China. They remain covered when they invest in France through a holding company they control, in Hong Kong or in Europe.
• Which formalities? Depending on the transaction, the investor must obtain an approval (sensitive project), make a filing (non-sensitive direct investment) or submit a prior report (investment through an offshore subsidiary, or a project of USD 100 million or more).
• What timelines? The authorities process a filing within 7 working days and an approval within 20 working days, unless extended. A report must be submitted at least 10 working days before the transaction is implemented, and even before signing for a project of USD 100 million or more.
• What should the French side do? From the letter of intent, provide for a condition precedent, require evidence of the Chinese formalities and align the deal timetable with these timelines.

ODI reform: what changes with NDRC Order No. 49

The new text keeps the 2017 structure (approval for sensitive projects, filing for the others) but significantly widens its scope. It implements the State Council regulation on outbound investment (国务院关于对外投资的规定, Order No. 837 of 5 May 2026, official presentation), in force since 1 July 2026, which laid down the new general framework.

• Individuals too. The reform no longer targets companies only: associations, public bodies and individuals resident in China must also complete the formalities (Art. 2).
• Data now counts. Like technology and intellectual property, data contributed to a foreign company is now counted as an investment (Art. 11). Formalities may therefore apply even where no funds leave China.
• No more threshold for offshore subsidiaries. Until now, a Chinese group investing through an offshore subsidiary only had to report the transaction from USD 300 million. It must now report it whatever the amount, at least 10 working days before implementation. The rule also applies where funds are reinvested back into China (Art. 14).
• Advance notice for large deals. For an investment of USD 100 million or more, or a transaction with diplomatic implications, the investor must notify the authorities at least 10 working days before signing the agreement or making a commitment to a foreign government (Art. 41).
• Certain foreign demands to be reported. If a host country or partner requires the investor to transfer technology or data, or to dispose of assets, and that demand threatens China’s interests, the investor must immediately inform the NDRC (Art. 53).
• Ongoing monitoring. The investor must report the completion or termination of its project within 10 working days (Art. 42), then file an annual report before 30 June (Art. 54).
• A retaliation tool. If a Chinese investor suffers discriminatory treatment abroad, China may, at its request, restrict the activities in China of the foreign parties concerned (Art. 54). It may also respond to a State’s discriminatory measures against China (Art. 55).
• A national security review. Transactions that may affect China’s national security go through a specific security review (Art. 15).

Which ODI formality for which acquisition in France?

Situation	Formality	Authority	Timeline	Articles
Chinese resident (company or individual) acquiring directly, non-sensitive transaction	Filing; filing notice before implementation	Central NDRC (central state-owned enterprises or USD 300m and above) or province	7 working days, extendable by 7	13 and 32
Acquisition through a controlled offshore holding company (Hong Kong, Luxembourg, etc.), non-sensitive transaction	Reinvestment report	Central NDRC or province, same allocation	At least 10 working days before implementation	14 and 72
Sensitive transaction (sensitive country or sector), direct or indirect	Prior approval	Central NDRC	20 working days, extendable by 10	12 and 25
Chinese investment of USD 100m or more, or with diplomatic implications	Report on preparatory work	Central NDRC or province	At least 10 working days before signing or commitment	41
Portfolio investment via QDII, Stock Connect or Wealth Connect	Out of scope, unless control is acquired or a 10% step is reached			73

Old and new regimes compared

Point	Order No. 11 (2017, in force from 1 March 2018)	Order No. 49 (2026, in force from 1 December 2026)
Investors covered	Chinese companies and the offshore entities they control; individuals only through a controlled foreign company	Companies, other organisations and resident individuals, directly (Art. 2)
Contributions covered	Currency, securities, goods, technology, intellectual property, equity, receivables, financing and guarantees	Same contributions, plus data (Art. 11)
Sensitive projects	Prior approval by the central NDRC	Prior NDRC approval retained (Art. 12)
Direct non-sensitive projects	Filing: central NDRC (central state-owned enterprises or USD 300m and above) or local NDRC (below USD 300m)	Filing retained with the same USD 300m threshold; individuals with the province of their hukou or habitual residence (Art. 13)
Reinvestment through a controlled foreign entity	Report only from USD 300m; nothing below	Report whatever the amount, at least 10 working days before implementation (Art. 14)
Round-trip investments	Not expressly covered	Covered, by reference to the reinvestment regime (Art. 14)
Large projects	No prior report (the “road pass” was abolished in 2018)	Report at least 10 working days before major preparatory work, from USD 100m or where there are diplomatic implications (Art. 41)
Major adverse events	Report within 5 working days	Immediate report, including foreign demands for technology, data or disposals (Art. 53)
Post-investment monitoring	Completion report within 20 working days	Completion and termination reports within 10 working days (Art. 42), plus annual report before 30 June (Art. 54)
Response to foreign measures	None	Possible restrictions against the foreign parties concerned (Arts 54 and 55)
Penalties	Orders, warnings and publication of breaches	Suspension, forced disposal, confiscation; fines of 1 to 10‰ of the Chinese investment amount; personal fines; ban on investing for 1 to 3 years; banks and advisers reported to their regulators (Arts 59 to 67)

Review periods remain 20 working days for approval, with a possible 10-day extension (Art. 25). For filing, the period is 7 working days, now extendable by a further 7 days (Art. 32). These periods run from acceptance of the application, the authorities having 5 working days to flag an incomplete file (Arts 21 and 30). An assessment by an expert body may be added: 30 working days at most, extendable by up to 60 working days in complex cases (Art. 23). The approval and the filing notice remain valid for two years (Art. 37).

Chinese investor in France: what are the consequences for the deal?

The reform binds the Chinese investor, but it weighs directly on the timetable and legal certainty of the transaction on the French side.

• Timetable. A Chinese investor making a non-sensitive acquisition in France through a holding company it controls, based in Hong Kong, Luxembourg or Ireland, must file a report at least 10 working days before implementation, whatever the amount. From USD 100 million, a report is also due at least 10 working days before signing the investment agreement or a “similar document” (Art. 41): a binding letter of intent could be caught. These deadlines must be built into the deal timetable from the letter of intent.
• Conditions precedent. Without an approval or filing notice, the foreign exchange authorities and Chinese banks will not process the funds (Art. 35). The NDRC formalities replace neither the outbound investment certificate issued by the Ministry of Commerce (MOFCOM) nor the foreign exchange registration carried out with banks under the supervision of SAFE. The sale agreement should therefore include a condition precedent covering these formalities, a long-stop date, a best-efforts obligation on the buyer and a representation as to its compliance.
• Individual investors. The ODI reform now covers Chinese individuals buying a building, a hotel or a business in France. The filing is made with the province of their place of registration (hukou) or habitual residence (Art. 13). How acquisitions for purely personal use will be treated remains to be clarified in practice. This question should be examined from the first discussions.
• Changes in price or structure. A change of at least 20% in the Chinese investment amount, or of at least USD 100 million, or a change of investors requires an amendment formality before it takes place (Art. 36). Any price adjustment between the letter of intent and signing must take this into account.
• Pending deals. The ODI reform provides no transitional regime. Chinese investments in France not yet completed by 1 December 2026 should therefore be reviewed now, in light of the formalities already completed and the contractual timetable.
• French foreign investment screening. Where relevant, the Chinese formalities come on top of the prior authorisation of the French Minister for the Economy (Article L. 151-3 of the Monetary and Financial Code), required where a foreign investor acquires control of a company carrying on a sensitive activity, acquires a business line of such a company or, if it is not European, crosses 25% of the voting rights (10% in companies listed on a regulated market) (Article R. 151-2). If the French authorisation imposes conditions on data, technology or a partial disposal, the Chinese investor will need to assess whether they threaten China’s interests within the meaning of Article 53 and must be reported to the NDRC. How the two regimes interact remains to be clarified in practice; it should be anticipated when negotiating the undertakings.

The penalties are real. Without approval or filing, the investor faces a fine of 1 to 5‰ of the Chinese investment amount, increased to 5 to 10‰ together with a forced disposal of the assets if it refuses to regularise; its managers face personal fines, and the authorities may bar it from investing abroad for one to three years (Arts 60 and 62). Failure to report exposes the investor to an order to comply, then to a warning or public reprimand (Art. 63). Banks that process the funds of an unreported transaction, and advisers who knew or should have known it was irregular, may be reported to their regulators (Arts 66 and 67).

French seller: five points to check

1. The applicable formalities. Ask the buyer to identify in writing which Chinese formality applies (approval, filing or report) and to produce the corresponding evidence.
2. The chain of control. Check the identity of the ultimate beneficial owner and establish who actually controls the intermediate holding companies, whether in Hong Kong or in Europe.
3. The source of funds. Identify the actual funder, its jurisdiction and the bank making the payment. Funds already held in Hong Kong do not exempt the investor from the Article 14 report.
4. The clauses. Include a condition precedent, set a long-stop date and impose a best-efforts obligation on the buyer. Also specify the consequences of a refusal and, where appropriate, provide for a break fee.
5. Coordinating the French and Chinese processes. Run the Chinese formalities in parallel with, where required, the application for authorisation to the French Ministry for the Economy.

Frequently asked questions on Chinese investment in France

When does China’s new outbound investment regime apply?

The ODI reform comes into force on 1 December 2026. On that date, NDRC Order No. 49 repeals the 2017 measures under Order No. 11, without any transitional regime (Art. 76).

What happens to the USD 300 million threshold?

It disappears for reinvestments made through a controlled foreign entity, which must be reported whatever their amount (Art. 14). It remains, however, for allocating filings: from USD 300 million, a local company files with the central NDRC, and below that with its province (Art. 13).

What about a Chinese individual buying property in France?

They now fall directly within the scope of the regulations. The ODI reform covers individuals resident in China (Art. 2), and no longer only those investing through a foreign company they control. The filing is made with the province of their place of registration (hukou) or habitual residence (Art. 13).

What about a Hong Kong holding company owned by a Chinese group?

It is caught as soon as it is controlled by an investor based in mainland China. Article 72 applies the regime, by reference, to investments made abroad through an entity controlled in Hong Kong, Macao or Taiwan. A non-sensitive investment in France made by that holding company requires a prior report (Art. 14), even if the funds are already held in Hong Kong.

What must the investor do if the host State requires data or technology?

The Chinese investor must immediately report that demand to the NDRC where it threatens or harms China’s interests or national security (Art. 53). Prompt reporting, followed by corrective action, may reduce or even remove the penalties provided for in Article 65.

How much time should be allowed for the Chinese formalities?

At least 10 working days for a reinvestment through an offshore subsidiary, 7 working days (14 at most) for a direct filing and 20 working days (30 at most) for an approval, from acceptance of the application and excluding any assessment. The steps with the Ministry of Commerce and the banks come on top.

Which authorisations does a Chinese investor need to buy a French company?

Two sets of formalities may apply at the same time. In China, the investor must obtain an approval, make a filing or submit a report to the NDRC, then complete the formalities with MOFCOM and the banks. In France, the authorisation of the Minister for the Economy is required where the target carries on a sensitive activity and the applicable control thresholds are met (Articles L. 151-3 and R. 151-2 of the Monetary and Financial Code).

What if the Chinese formality fails?

Without an approval or filing notice, the funds cannot leave China through banking channels (Art. 35). Hence the value of a condition precedent with a long-stop date and a clause setting out what happens to the transaction, and to any deposit, if it fails.

What is the difference between the NDRC, MOFCOM and SAFE?

The NDRC oversees Chinese outbound investment projects through the approval, filing and reporting procedures. MOFCOM applies its own regime and issues the outbound investment certificate. SAFE regulates foreign exchange flows, while banks handle the registration formalities in practice.

What is the role of the French lawyer?

The French lawyer builds the formalities required by Chinese regulations into the timetable and contract documentation of the transaction. They coordinate with advisers in China and make sure the ODI reform fits with the French foreign investment screening regime.

MOSAIK assists Chinese investors and their French partners at every stage of these transactions, through its Asian Desk: mergers and acquisitions, setting up in France and coordination with advisers in China. See also our article Investing in France: legal framework for Chinese investors.

William Mak

Lawyer - Founder