Banking & Finance 2025 Comparisons

A general slowdown in transactional activity is now evident, attributable to the ECB’s tightening cycle since 2022 and the protectionist policies recently implemented by the new US administration. Some sectors – such as healthcare and digital health, TMT and infrastructure – remain resilient, while real estate, retail and export-heavy industries face headwinds. The energy and defence sectors are benefiting from increased investment and government support.

High interest rates since 2022 have pushed up the cost of debt. Furthermore, the decline in valuations due to liquidity constraints has resulted in private equity sponsors retaining their assets for extended periods. Consequently, although numerous refinancings and major restructurings have already taken place, the volume of debt maturing over the next two years remains substantial, with a peak anticipated in 2028. Innovative banking and finance techniques have emerged in response to these evolving market dynamics (see 1.5 Banking and Finance Techniques).

Basel III/IV implementation has also prompted banks to become more selective and to scale back their lending activities. Meanwhile, private debt funds are gaining traction, particularly in the mid-market and leveraged-finance segments.

Global conflicts – whether geopolitical tensions, wars or trade disputes – have had a tangible impact on the direction, terms and trends of the loan market in France. Loans are increasingly directed toward sectors considered strategic or resilient. Loan documentation has become more stringent and pricing has generally increased, although some instances of more favourable pricing have been observed in 2025 (in comparison to 2024). Political uncertainty has contributed to a more measured approach to large syndicated transactions, with borrowers increasingly opting for bilateral or club deals due to their speed and confidentiality.

The high-yield market has played a strategic and increasingly influential role in shaping emerging financing trends, both in France and across Europe, and has become a key source of capital for French companies, particularly as bank lending declines. The start of 2025 has seen heightened activity in the high-yield market, driven largely by a wave of refinancing and repricing transactions.

The high-yield market has shaped TLB (Term Loan B) US-style documentation by introducing New York law-style covenants layered into the usual facility agreements.

Alternative credit providers are stepping in to provide flexible financing where traditional banks are retreating due to risk constraints. They offer greater flexibility but at higher costs compared to traditional bank financing. The share of foreign funds in domestic French transactions has significantly increased.

Extended holding periods (averaging six to seven years) are driving private equity sponsors to tailored liquidity solutions – such as partial exits, cross-fund deals, continuation funds, and net asset value financing. Also, a hybrid instrument combining equity (minority or majority) and mezzanine financing – flex equity – has gained traction, providing a tailored risk-return profile and partial exit strategies.

There have been several notable developments in ESG and sustainability-linked lending (SLL) in France recently, reflecting both regulatory momentum and market innovation. France continues to align closely with EU-level legislation, including the EU Taxonomy, the SFDR (Sustainable Finance Disclosure Regulation) and the CSRD (Corporate Sustainability Reporting Directive). French financial institutions are increasingly required to disclose ESG risks, integrate sustainability criteria into credit decisions, and report on green asset ratios.

SLLs are gaining traction across sectors, especially in infrastructure, real estate, and industrials. French corporates are actively using SLLs to signal ESG commitment and access favourable pricing. ESG-linked structures are now common in private credit, particularly in mid-market deals.

Green loans are being used to finance specific environmentally beneficial projects (eg, renewable energy, clean transport).

Entering into credit transactions on a regular basis with companies established in France is reserved to (i) entities licensed as credit institutions (établissements de crédit) or financing companies (sociétés de financement) by the French Autorité de Contrôle Prudentiel et de Résolution, or ACPR; or (ii) entities licensed in another member of the European Economic Area provided that they comply with the European passport procedure described under the 2013/36/EU Directive (see 3.1 Restrictions on Foreign Lenders Providing Loans) – ie, the “French banking monopoly” rules.

Credit transactions include the granting for consideration of loans (or a commitment to grant loans) as well as the purchase of non-matured receivables, but exclude bond subscriptions. Any breach of this prohibition is subject to criminal penalties of three years’ imprisonment and/or a fine of EUR375,000.

In France, the authorisation procedure for credit institutions is overseen by the Autorité de contrôle prudentiel et de résolution. An application should include a detailed business plan outlining the services intended to be provided, the institution’s Articles of Association, the identity of effective managers and significant shareholders, human, technical and financial resources, governance arrangements (compliance, risk management, internal control), and initial capital.

However, certain exemptions apply. Notably (i) specific French law alternative investment funds, which are allowed to have direct lending activities; and (ii) foreign entities or institutions whose purpose or activities are comparable to those of French credit institutions. These are permitted to purchase non-matured receivables arising from credit transactions entered into by licensed credit institutions, financing companies or certain types of alternative investment funds within the context of the transfer of funded participations as part of a primary or secondary syndication.

The French banking monopoly rules referred to in 2.1 Providing Financing to a Company apply to both domestic and foreign lenders.

Two exceptions to the French banking monopoly apply when financing is provided by foreign lenders, as follows:

• the financing is structured as a bond issue subscribed to by foreign lenders; or
• the financing is structured as a loan agreement, with foreign lenders whose purpose or activities are comparable to those of French credit institutions acquiring loan receivables (eg, funded participations) from licensed credit institutions, financing companies, or certain types of funds.

Under French law, there are no restrictions or impediments (other than international sanctions-related restrictions) to foreign lenders receiving the benefit of security or guarantees. A specific receivables security assignment known as the “Dailly assignment” and commonly used in real estate financing may only be granted to duly licensed credit institutions (établissements de crédit), financing companies (sociétés de financement) or certain alternative investment funds reserved for professional investors and securitisation funds.

There are no controls or restrictions regarding foreign currency exchange in France.

The use of proceeds from loans or debt securities is generally agreed upon between the parties to the relevant financing agreement.

There are no specific restrictions on the use of proceeds under French law, except for non-compliance with international sanctions-related provisions, anti-bribery laws and regulations or anti-money laundering laws and regulations, or certain limitations and conditions related to the general principal of corporate interest of the borrower and to the prohibition of financial assistance.

The agent concept as representative of the lenders for the management and administration of the facility relies on a civil law power of attorney (mandat) granted by the lenders to the agent of the facility.

The agent concept as representative of the lenders for the creation, management or enforcement of French law security interests relies on either (i) the above-mentioned civil law power of attorney – in which case the agent is acting in the name and on behalf of the lenders, or, increasingly, (ii) the “security agent regime” provided by Articles 2488-6 to 2488-12 of the French Civil Code, which enables a security agent to take, register, manage and enforce security interests in its own name but in favour of the creditors of the secured liabilities. In the latter case, the rights of the security agent under these security interests are part of a dedicated estate (patrimoine affecté) which is separate from the security agent’s own estate.

Although not used within an agency structure, a concept similar to the trust called the fiducie exists under French law. The fiducie is a contractual arrangement whereby a grantor transfers the full ownership of one or several asset(s) to a fiduciaire (trustee) who will hold, manage and, as required, dispose of, those assets for the benefit of designated beneficiaries. The fiducie can also serve as a form of security interest. In such cases, the beneficiaries are the creditors of the secured obligation, the assets transferred to the fiduciaire constitute the collateral securing the debt, and the fiduciaire acts in its name but in favour of the secured creditors.

Under French law, loans can be transferred by the lenders by way of the following.

• Assignment of receivables (cession de créances) – an existing lender assigns the loans receivables it holds against the borrower to a new lender. The borrower’s consent is not required for this to be valid between assignor and assignee or to be enforceable against third parties (other than the borrower). It must be notified to the borrower in order to be enforceable against it, or, alternatively, the borrower shall have acknowledged or approved the assignment.
• Novation (novation) – the existing loan obligation towards the existing lender will be replaced by a new obligation created in favour of a new lender (the existing obligation towards the existing lender being automatically and simultaneously terminated). This requires consent from the borrower, the existing lender and the new lender.
• Assignment of agreement (cession de contrat) – an existing lender assigns its status as party to the loan agreement to a new lender. It requires the consent of the borrower, the existing lender and the new lender.

In practice, facility agreements often contain provisions whereby the borrower gives standing consent to or acknowledges transfers (or certain transfers) made by the lenders when such consent or acknowledgement is required.

Under French law, security interests and guarantees (excluding autonomous guarantees, ie, guarantees that are independent obligations unaffected by the underlying debtor obligations) are considered ancillary to the secured claims and any assignment of receivables automatically includes the transfer of all ancillary rights. Consequently, when a loan is transferred by way of an assignment of receivables, the associated security package is also transferred to the assignee. Conversely, finance documentation typically includes the express consent of security providers and guarantors for the transfer of security interests and guarantees in the event of a secured loan being transferred through assignment of agreement or novation.

French regulation does not restrict debt buybacks.

In practice, the question of debt buybacks is addressed contractually in the finance documentation. Such transactions are generally contractually prohibited or restricted by the parties, and accompanied, in some cases, by disenfranchising provisions stating that the borrower or financial sponsor (or other affiliates) cannot participate in the decision-making by the lenders.

French laws and regulations applicable to public acquisition transactions require that:

• the tender offer is filed with the French Autorités des marchés financiers, or AMF (the competent authority for supervising public takeover bids), by one or several financial services providers (prestataires de services d’investissement) known as presenting bank(s) (banque(s) présentatrice(s)) on behalf of the offeror; and
• at least one of the presenting banks (which will be called the “guaranteeing bank” (banque garante)) guarantees the content and irrevocable nature of the commitment of the offeror, which means that the guaranteeing bank will pay any portion of the purchase price which the offeror fails to pay. Upon such payment, the guaranteeing bank will hold a right of recourse against the offeror.

Consequently, the guaranteeing banks will require the following protection mechanism to be provided in the loan agreement:

• a strong and certain funds provision for drawdowns made by the offeror – ie, subject only to the absence of (i) major events of default; (ii) change of control; (iii) illegality; and subject to all major representations being correct;
• a direct right for the guaranteeing banks to request a drawdown of the loan where they have not received evidence that the offeror has effected this in a timely manner, or if the drawdown requested by the offeror is not made available; and
• a guarantee from the financing banks securing the payment of all sums due by the offeror to the guaranteeing banks under their right of recourse.

It should be noted that:

• the guaranteeing bank will usually request that their direct drawdown right is only subject to no change of control or illegality; and
• any payment by the financing banks in favour of the guaranteeing banks under the guarantee is deemed to be a drawdown under the loan.

In practice, the filing of the tender offer takes place by way of a letter addressed to the AMF signed by the guaranteeing banks. This letter is accompanied by a draft offer document (note d’information) outlining the key terms of the offer and its financing structure. While the offer document is made publicly available, the underlying financing documentation remains confidential.

The long-form documentation is usually signed prior to the filing of the tender offer.

Certain funds provisions are also commonly used in a private acquisition transaction without the specific protection mechanism described above (ie, direct right of drawdown and guarantee).

Since the COVID-19 pandemic, the use of electronic signatures for finance documents has become standard practice. Following the 2021 reform of insolvency law, English law-style inter-creditor agreements have also become standard, and now incorporate provisions addressing the treatment of impaired creditor classes. In large deals, negotiations around LME (liability management exercises) and lender protection have emerged. Finally, ESG-linked loans are also gaining traction, often supported by government or EU initiatives. Notably, the traditional “rendez-vous clause” for later negotiation of ESG terms has disappeared; these provisions are now negotiated upfront, and typically based on the Loan Market Association (LMA) template.

¬

French usury laws apply to loans granted:

• to (i) individuals for non-professional purposes; or (ii) legal entities other than those having industrial, commercial, agricultural, or non-commercial professional activities; or
• in the form of overdrafts.

A loan is considered usurious if, at the time it is granted, its overall effective rate exceeds by more than one-third the average overall effective rate applied by credit institutions during the previous quarter for transactions of the same nature involving similar risks. This usury rate is calculated by the Banque de France and published on its website after each quarter.

Usurious loans are subject to civil sanctions and, unless they qualify as overdrafts, may also give rise to civil and criminal penalties, as follows.

• Civil sanctions – interest exceeding the usury rate shall first be applied to the payment of interest accrued at a rate within the legal limit, then to the repayment of principal, and any remaining excess must be reimbursed to the borrower.
• Criminal penalties – two years’ imprisonment and/or a fine of EUR300,000. These penalties apply to the person who has granted the usurious loan and any person who has participated directly or indirectly in the granting of the loan.

French law does not provide for any specific obligation to disclose certain contracts to authorities or clients. Based on strict confidentiality rules, credit institutions would also be prohibited from disclosing any privileged client-related information obtained in the course of their professional activities. The 2018/822 Directive (DAC 6) does, however, provide for mandatory disclosure of cross-border arrangements by intermediaries or taxpayers to the tax authorities, and mandates automatic exchange of this information among EU member states in order to dissuade taxpayers from implementing aggressive tax arrangements.

No withholding tax applies on interest paid by a French company to a non-resident lender unless the interest is paid outside France in a so-called “unco-operative state or territory”, as defined in a blacklist published annually by the French authorities. In the latter case, a 75% withholding tax applies on interest payments.

Note that the 2025 blacklist includes American Samoa, Anguilla, Antigua and Barbuda, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, the Turks and Caicos Islands, the US Virgin Islands and Vanuatu.

No tax duties or charges should be due by lenders making loans to (or taking security and guarantees from) French borrowers.

Note, however, that the enforcement of a security ordered by courts may be subject to registration duties in respect of the transfer of ownership triggered by the enforcement. The related registration duties would be due either at (i) 0.1%, when the security relates to shares other than shares of real estate companies; or (ii) 5%, when the security relates to real estate or shares of real estate companies provided that the enforcement of security entails a transfer of ownership.

As mentioned above, interest paid to lenders (or into a bank account) located in an uncooperative state or territory are subject to withholding tax in France. Consequently, careful attention should be paid by a French borrower to ensure that (i) lenders (and bank accounts into which interest is paid) are not located in such jurisdictions; and (ii) no transfer to lenders located in such jurisdictions can be made without prior consent. In practice, facility agreements contain a prohibition from transferring any loan participation or commitment, or entering into sub-participation or subcontracting in relation to a loan or commitment to any entity incorporated or acting through an office situated in an uncooperative state or territory without the prior consent of the borrower.

The standard security packages available to lenders in France are as follows.

• For acquisition finance transactions – security over (i) shares issued by stock company such as société anonyme or société par actions simplifiée or by un/limited partnership; (ii) bank accounts; and (iii) intra-group loan receivables (either in the form of pledge or in the form of assignment by way of security). Such security packages may also include cash collateral, pledges over going concerns or pledges over intellectual property rights.
• In real estate financing – a mortgage, a pledge over shares issued by the borrower, a pledge over shareholder loans and a specific assignment of receivables by way of security (cession de créances professionnelles à titre de garantie, or Dailly assignment – see 3.2 Restrictions on Foreign Lenders Receiving Security) over all revenues derived from the property (eg, rents, insurance proceeds).
• Within the context of a distressed scenario – in addition to the security packages mentioned above, creditors often require the creation of a fiducie agreement (an arrangement similar to a trust) (see section 3.5 Agents and Trust Concept) applicable to shares issued by the holding company of a group, the borrower or the key assets of the group.

As a general rule, a French-law security interest will be validly created once the pledgor and the pledgee have entered into a written pledge agreement identifying the pledged assets and the secured liabilities. Some security will only be validly created if the relevant pledge or assignment agreement contains certain mandatory information (in addition to the description of the pledged assets and secured liabilities). This is the case for the pledge over shares issued by the stock company, the Dailly assignment and the fiducie agreement. Mortgage deeds will only be valid if they are created pursuant to a notarial deed drawn up by a notary. The fiducie agreement also requires registration with the local tax authorities within one month of its signing.

Some security interests have to be registered in order to be enforceable against third parties:

• the pledge over shares issued by un/limited partnerships and the pledge over going concerns must be recorded in a special registry (registre des sûretés mobilières) held by the competent commercial court;
• the pledge over intellectual property must be recorded in a special registry held by the Institut National de la Propriété Intellectuelle; and
• a mortgage must be recorded in the relevant land registry (registre de publicité foncière). This registration is handled by the notary.

Additionally, depending on the corporate form and the by-laws of the issuing company, a pledge over shares may require the approval of the shareholders, manager or board of directors of the relevant company. Security over shares issued by stock companies must be registered in the shareholders’ register of the issuing company. 

Finally, a pledge over receivables (including security over bank accounts) or assignment of receivables are enforceable against third parties upon execution of the pledge or assignment agreement. They are enforceable against the pledged or assigned debtor or against the account bank as from the date of notice of the pledge to it (or, alternatively, if the debtor account bank is party to the pledge or assignment agreement, as from the date of signing of such agreement).

With the exception of mortgages and establishing a fiducie, the creation of French law security interest would not incur significant costs.

The creation of a floating charge or other universal or similar security interest over all present and future assets of a company is not possible under French law. This explains the division between different types of security interests for different types of assets (as detailed in 5.1 Assets and Forms of Security). Such security interests, however, may cover all existing and future assets of the relevant category of asset (except for land charges/mortgages).

Downstream guarantees are generally permissible.

However, upstream and cross-stream guarantees by French companies may be restricted on the basis of French financial assistance rules, as explained in 5.4 Restrictions on the Target, abuse of corporate interests, or misappropriation of a company’s assets. Typically, upstream and cross-stream guarantees will only be valid if the guarantor (and/or its subsidiaries) receives a direct benefit from the secured financing proceeds. In practice, the upstream or cross-stream guarantee is limited to the amounts actually drawn under the facility agreement and directly or indirectly on-lent to the relevant guarantor or its subsidiaries. In the case of abuse of corporate interests or misappropriation of the company’s assets, the company’s officers could be subject to criminal penalties. Lenders benefiting from the guarantees could also potentially be subject to these criminal penalties as accomplices.

Pursuant to French financial assistance rules, a French company incorporated as a société anonyme or société par actions simplifiée cannot grant any loan, guarantee or security interest in connection with the acquisition or subscription by a third party of its own shares.

According to some experts, this prohibition applies similarly to loans, guarantees or security interests intended to be granted for the acquisition of shares in any company that directly or indirectly owns shares in the target company.

Any loan, guarantee or security granted in violation of such prohibition may be deemed null and void. A violation of such a prohibition may also result in criminal penalties against the company’s officers, and, potentially, against the lenders as accomplices.

A French works council consultation is required if a company has at least 50 employees and the transaction may result in a change of control or affect its general management. In practice, a consultation regarding security interests is seldom conducted at the time of their creation, unless a separate circumstance (such as a corporate transaction entailing a change of control) necessitates this.

As a general rule, the release of the security must take the form of a written release letter signed by the beneficiary of the security and identifying the security to be released as well as the assets subject to the security. If the security to be released is a mortgage, the release letter should be drawn up by a notary.

Additionally, the release of a registered security interest must be registered on the registry on which the creation of the security was initially recorded (see section 5.1 Assets and Forms of Security). Mortgages are handled by the notary. 

It should be noted that the release of an assignment of receivables by way of security is a re-transfer letter signed by the assignee and the assignor. If the secured obligations have been fully discharged before the transferred receivable is fully paid, the transferor automatically regains ownership of the receivable.

Finally, the fiducie is released by way of a termination agreement between the grantor, the trustee and the beneficiary, and must be registered with the local tax authorities within one month of its signing.

As a general rule, the order of priority is chronological; seniority over any subsequent security interest is determined by the date on which the security interest was created, unless otherwise agreed by the relevant parties. If the security interest is subject to registration, its ranking is determined by the registration date.

In practice, priority ranking is commonly implemented through contractual arrangements such as subordination/inter-creditor agreements which determine the priority among the lender’s group or separate groups of lenders.

Contractual subordination provisions will be given effect in the context of insolvency proceedings (eg, safeguard (sauvegarde), accelerated safeguard (sauvegarde accélérée) and reorganisation proceedings (redressement judiciaire)). If impaired creditor groups (classes de parties affectées) are created in such proceedings for the voting of the continuation plan, the distribution of creditors among those groups must take into account subordination agreements – provided that the judicial administrator has been notified of such agreements. However, in the event of liquidation proceedings, if the contractual subordination provisions that determine the ranking of competing security interests are in conflict with the statutory order of priority under French law (see 7.2 Waterfall of Payments), the liquidator will likely apply the latter. The contractual subordination agreement will then be implemented through the operation of its turnover provisions.

Outside the context of insolvency proceedings, any security arising by operation of law should not, in practice, take precedence over a lenders’ security interests over movable assets described in 5.1 Assets and Forms of Security, except for liens securing certain taxes. However, liens securing (i) court costs, (ii) certain wages and allowances due to employees, and (iii) certain taxes should supersede any mortgagee’s right on immovable assets. They are not subject to registration. 

Within the context of insolvency proceedings, specific liens are recognised for certain creditors, with the result that the rights of these creditors take priority over those of other creditors, even if secured (see section 7.2 Waterfall of Payments).

Any enforcement of French law collateral requires that the secured obligations are due and payable but unpaid.

Three routes of enforcement are common across most security interests described in 5.1 Assets and Forms of Security, as follows.

• Judicial attribution – the pledgee applies to the relevant French court for an order transferring ownership to it of the pledged asset. The value of the asset is determined by the court on the basis of a report made by an external expert appointed by the court. The pledgee must pay to the pledgor the difference (if positive) between the value of the pledged asset and the amount of the secured obligations (this balancing payment is referred to as the soulte). This type of enforcement is not available for security over going concern.
• Contractual attribution (pacte commissoire) – the pledgee becomes the owner of the pledged asset and applies the value of the asset against the secured obligations, without any judicial intervention. To be available, this foreclosure mechanism must be expressly provided for in the pledge agreement. The value of the pledged asset must be determined (i) by an expert appointed by the parties or the court, or if the pledged assets are financial securities admitted to a regulated market, multilateral trading facility or organised trading facility; (ii) by reference to the latest available closing price on such a trading platform. Any surplus or between the value of the pledged assets and the amount of the secured obligations must be repaid (as the soulte) to the pledgor. This manner of enforcement is not available for security over going concern.
• Public auction or judicial sale process – under French law, a secured creditor is not permitted to directly sell the pledged assets to a third party. Such assets must be sold either through (i) a public auction (vente publique); or (ii) in respect of enforcement of security securing non-professional debt and security over real estate assets, through a judicial sale process; or (iii) if the pledged assets are financial securities admitted to a regulated market, multilateral trading facility or organised trading facility, via the sale on such trading platforms or pursuant to a private placement or accelerated book building. This manner of enforcement is not available for security over receivables and bank accounts.

In the event of an assignment of receivables by way of security, enforcement must occur through the assignee becoming the definitive owner of the assigned receivables. Any monies paid to it in respect of such receivables will be allocated against the secured obligations when it is due.

Foreign Law

The parties are generally free to choose the governing law of a contract concluded in civil and commercial matters, even without a specific connection to the case, provided that the contract or underlying transaction has an international component.

The choice of a foreign law would be recognised and upheld by the French courts, provided that the chosen foreign law is not contrary to the mandatory rules of French law or manifestly incompatible with French international public policy. It should also be noted that a French “loi de police”, or overriding mandatory provisions, will apply even if a foreign law is chosen by the parties. Furthermore, certain mandatory laws will override the choice of applicable law (for example, in real estate matters, the applicable law in France will always be the law governing the property’s location).

Foreign Jurisdiction

If the foreign jurisdiction chosen by the parties is a member state of the EU, a choice of court agreement is valid if (i) the clause has been agreed by the parties, being specified that this consent must be expressed in a written contract; (ii) the clause clearly designates the courts of a member state; and (iii) the dispute involves foreign elements (in accordance with the provisions of the Brussels I bis Regulation).

Similarly, when the foreign jurisdiction chosen is in a state outside the EU, the submission to a foreign jurisdiction would be recognised and upheld by the French courts provided that:

• the dispute has an international component;
• the submission to a foreign jurisdiction is not contrary to the mandatory exclusive jurisdiction of the French courts;
• the choice of jurisdiction provision is not asymmetric; and
• the choice of jurisdiction does not create a significant imbalance between the rights and obligations of the parties.

Finally, choices of jurisdiction provisions may be asymmetric by allowing one of the parties the right to bring proceedings either before the court or courts designated in such clause, or before any other competent court or the courts of another state, provided that (i) they designate courts located in member states of the EU or in states that are parties to the Lugano II Convention; (ii) they are based on objective and precise elements that allow the competent courts to be determined; and (iii) they do not contravene specific provisions of the Brussels I bis Regulation, such as those relating to exclusive jurisdiction.

Waiver of Immunity

A waiver of immunity may concern immunity from jurisdiction or immunity from enforcement.

• Immunity from jurisdiction prevents a court from considering claims against a particular state. A state may waive its immunity from jurisdiction in a dispute, provided that the waiver is certain, express and unequivocal.
• Immunity from enforcement prevents a state’s assets located in another jurisdiction from being seized without its consent by a party seeking to execute a judgment or an arbitral award rendered against that state.

Since the Sapin II law was passed in 2016, a claimant seeking to seize a foreign state’s assets located in France must obtain the prior authorisation of a judge and, at the same time, justify that one of the following conditions is met:

• the foreign state has expressly (ie, written and devoid of ambiguity) agreed to the application of such a measure;
• the foreign state has reserved or allocated the asset for the satisfaction of the claim which is subject to the proceedings; or
• the asset likely to be seized is specifically used or intended to be used by the foreign state for commercial purposes, and is connected to the entity against which the proceedings have been brought.

A foreign judgment or an arbitral award against a company may be enforceable in France without a retrial of the merits subject to certain conditions.

Foreign Judgment

Inside the EU

The fundamental principle within the EU is that of mutual recognition, which facilitates the circulation of judicial decisions between member states. Consequently, in civil and commercial matters, the decisions issued in the court of one member state of the EU are automatically recognised and enforceable in another member state without the need for an “exequatur” procedure (Brussels I bis Regulation). However, recognition may be refused in certain cases – for instance, in the event of a violation of the public policy of the requested state.

Outside the EU

To enforce a foreign judgment rendered outside the EU, an exequatur order is required, and will be granted if the following conditions are met:

• the foreign judgment must be definitive and enforceable in its country of origin;
• the foreign court must have had proper jurisdiction;
• the judgment must not be contrary to the international public policy; and
• the judgment must not have been obtained through fraud.

The process can take months or years, and success depends on fulfilling the four conditions.

If the exequatur is denied, the foreign judgment cannot be enforced in France, and the creditor may face penalties for abusive litigation, although this is rare. 

Conversely, once the exequatur is granted, the foreign judgment can be enforced for a period of ten years from the date of the definitive exequatur judgment.

However, provisional measures against a debtor’s assets may still be taken by request before obtaining an exequatur order, provided the creditor justifies a debt established in principle and a risk of non-recovery of the amounts concerned.

Arbitral Awards

The enforcement of an arbitral award is also subject to an exequatur order and is recognised or enforced in France subject to satisfactory evidence provided by the invoking party, and provided that such recognition or enforcement does not go against international public policy.

If a security interest encumbers the shares of a French company and the enforcement of the security is to be considered a foreign investment falling within the scope of the special regime governed by Articles L.151-1 et seq and R.151-1 et seq of the French Monetary and Financial Code, prior approval of the Ministry of Economy will be required.

Foreign investment means (i) the acquisition by an EU or non-EU foreign company of (a) control of a French company or (b) all or part of a line of business of a French company, or (ii) the acquisition by a non-EU foreign company of a stake of (a) 25% or more of the voting rights in a French company, or (b) 10% or more of the voting rights in a French company whose shares are admitted to trading to a regulated market.

Foreign investment will be subject to prior approval if the French company in which the investment is made carries out an activity related to the exercise of public authority or falling within certain sectors identified by French law (eg, national defence, public security, research, production or marketing of weapons). It should be noted that the list of “sensitive” sectors is broader for non-EU companies than for EU companies.

Commencement of insolvency proceedings (ie, reorganisation proceedings (redressement judiciaire), safeguard proceedings (sauvegarde) and accelerated safeguard proceedings (sauvegarde accélérée)) will freeze the debtor’s financial situation as at the commencement date of the relevant insolvency proceedings and stay payments. The commencement of these proceedings does not trigger the acceleration of debts, and debt cannot be accelerated solely as a result of the commencement of such proceedings.

Secured creditors generally retain their priority over the collateral, but may not enforce their security over the debtor’s assets during the observation period. Any individual legal actions and enforcement proceedings (i) against the debtor and its assets; or (ii) against individuals who granted a guarantee and/or security interest to secure the debtor’s debt, will be stayed during the observation period. This period starts on the date of the court decision commencing the proceedings and ends on the date on which the court takes a decision on the outcome of the proceedings. This may last up to 18 months in the case of reorganisation proceedings.

At the end of the observation period, a continuation plan (plan de sauvegarde ou de redressement), possibly after implementation of a cross-class cram-down, or a sale of the debtor’s assets (plan de cession) will be implemented.

Commencement of liquidation proceedings will freeze the debtor’s financial situation as at the commencement date of such proceedings in the same way as other proceedings described above. However, contrary to the opening of the above-mentioned insolvency proceedings, unmatured claims become immediately due and payable. French law does not set a time limit for judicial liquidation proceedings. The duration therefore usually depends on the number of employees, the assets to be sold and any litigation, which could take years.

There is a hardening period (période suspecte) from the date of cessation of payments (cessation des paiements) of the debtor until the court decision opening the insolvency proceedings. During this period, certain transactions entered into (such as the granting of security interest over the debtor’s assets as collateral for a debt previously incurred) are automatically void or voidable by the court. The date of insolvency (cessation des paiements) of a debtor is deemed to be the date of the court order commencing the proceedings, unless the court sets an earlier date, which may be no earlier than 18 months before the date of the court order.

French insolvency law assigns priority to the payment of certain preferred creditors as follows:

• employees’ super-privileged claims (ie, wages for the last 60 days of work before the opening of the insolvency proceedings);
• post-commencement legal costs (ie, court officials’ fees);
• liens benefiting new money made available during conciliation (described in section 7.4 Rescue or Reorganisation Procedures Other Than Insolvency);
• pre-commencement claims secured by security interests over real estate assets (only in the context of judicial liquidation proceedings);
• post-commencement wages claims not advanced through the French wages guarantee scheme (AGS);
• liens benefiting new money made available during safeguard/reorganisation proceedings;
• post-commencement privileged creditors;
• other post-commencement claims (wages due and AGS claims);
• creditors benefiting from other privileges; and
• unsecured claims.

In the event of judicial liquidation proceedings only, certain pre-commencement secured creditors with claims secured by real estate are paid prior to post-commencement creditors.

There may be exceptions to this order of priority for certain types of creditors, who would be treated separately. This is the case, for example, for creditors with a retention right over assets relating to their claim.

The maximum duration of each type of proceeding may vary as follows.

• Mandat ad hoc (pre-insolvency proceedings) – French law does not provide any maximum duration; in practice, this usually does not last more than one year.
• Conciliation (pre-insolvency proceedings) – four months (or up to five months in total, if the initial length is extended).
• Safeguard proceedings – 12 months.
• Accelerated safeguard proceedings – four months.
• Reorganisation proceedings – 18 months.
• Liquidation proceedings – French law does not provide any maximum duration for liquidation proceedings; in practice, the duration will depend on the ongoing litigation, the size of the company and the value of its assets.
• Simplified liquidation proceedings (available to certain small business only) – 12 months.

The duration of the implementation phase of the continuation plan reached can range from a few weeks to ten years, depending on the complexity of the case.

A French debtor may, in certain conditions, voluntarily request the commencement of the mandat ad hoc or conciliation pre-insolvency proceedings, which are flexible and confidential, with the intention of reaching an agreement with the debtor’s main creditors and stakeholders.

The main characteristics of the pre-insolvency proceedings are as follows.

• The mandat ad hoc and conciliation may only be initiated by the debtor itself, at its sole discretion.
• A mandat ad hoc may be initiated if the debtor faces difficulties but is not insolvent, while the conciliation may be initiated if the debtor faces actual or foreseeable difficulties of a legal, economic or financial nature and is not insolvent, or has not been in a state of cessation of payment (cessation des paiements), for more than 45 calendar days.
• Both are carried out under the aegis of a court-appointed officer (mandataire ad hoc or conciliateur) to facilitate negotiations with creditors.
• In both cases, any agreement between the debtor and its creditors will be negotiated on a purely consensual and voluntary basis; creditors not willing to take part in the agreement cannot be bound by it or forced to accept it.
• None of these proceedings automatically stays any pending proceedings, and creditors are not barred from taking legal action against the debtor to recover their claims; those that have accepted to take part in the proceedings usually accept not to do so during the proceedings.
• Contractual provisions increasing the debtors’ obligations (or reducing its rights) under an existing contract upon the opening of such pre-insolvency proceedings are null and void. This is a public order provision of French law.

In addition, in the case of conciliation, the agreement reached between the parties may be approved (homologué) by the president of the competent court at the request of the debtor. In the case of approval, creditors that, in the context of the conciliation proceedings provide new money, goods or services designed to ensure the continuation of the business of the debtor (other than shareholders providing new equity in the event of a capital increase), will enjoy priority of payment over certain creditors in subsequent insolvency proceedings (see 7.2 Waterfall of Payments).

In insolvency proceedings, creditors may be required to accept debt rescheduling and write-offs as part of the restructuring process. Furthermore, since 2021, creditors can qualify as dissenting creditors if they do not belong to a two-thirds majority class of affected parties or if they are part of a junior class subject to a cross-class cram-down.

Project finance activity in France remains robust, driven by a solid banking sector and active government involvement, particularly through public-private partnerships. The most active industries utilising project finance include renewable energy (wind farms (onshore and offshore) and solar PV projects), infrastructure (such as transport and public facilities) and telecommunications. New types of projects are also gaining ground, including electric vehicle infrastructure, hydrogen production, and data centres powered by artificial intelligence. The AI Action Summit of February 2025 highlighted France’ attractiveness for major infrastructure projects for the development of artificial intelligence, in particular through the establishment of data centres.

Overall, the environment for project finance remains favourable, but recent political instability could potentially challenge this dynamic.

In France, public-private partnerships are primarily categorised into concession agreements and partnership contracts, both of which are governed by the principles of public contract law and codified in the French Public Procurement Code.

• Concession agreements –a public entity entrusts a private partner with the execution of work and/or the operation of a service in exchange for the right to operate the work or service. This includes public service delegation contracts, where a local authority entrusts a private partner with the management of a public service. The private partner, also known as the “concessionaire”, bears operating risks, as its remuneration comes from the users of the public service and is therefore tied to market fluctuations. The concession offer and the negotiation process must comply with specific requirements. In particular, the public entity’s decision to grant a concession must be based on non-discriminatory criteria. Once concluded, the concession agreement may be modified during its execution under specific conditions, such as when additional work or services become necessary.
• Partnership contracts –a public entity entrusts a private partner with a global mission that may include the construction, transformation, renovation, dismantling or destruction of work, equipment or intangible assets necessary for providing a public service or fulfilling a general interest mission, as well as all or part of the associated financing.

A key distinction from concession agreements is that, under a partnership contract, the public entity compensates the private partner by paying a rent in exchange for the execution of the agreed-upon mission.

For both partnership contracts and concession agreements:

• the private partner may, under certain conditions, claim compensation for expenses incurred if the contract is judicially cancelled or terminated as a result of recourse lodged by a third party against the contract; and
• the public entity is required to make the “essential data” from partnership contracts and concession agreements freely accessible.

The French Supreme Administrative Court (Conseil d’Etat) recently introduced important developments regarding public-private partnership contracts. In particular, it ruled that a public entity has the right to unilaterally modify an irregular clause in the contract, provided that the clause is separable from the other provisions of the contract and that the judge has the authority to annul or terminate only these clauses, thereby preserving the integrity of the remainder of the contract.

The same principles as those described in 6.2 Foreign Law and Jurisdiction and 6.3 Foreign Court Judgments apply.

Any investment that qualifies as a foreign investment in a French company or line of business of a French company operating in a “sensitive” sector will be subject to the prior approval of the Ministry of Economy (see 6.4 A Foreign Lender’s Ability to Enforce Its Rights). “Sensitive” sectors include any that are essential to safeguarding the country’s national interests in the fields of energy, water supply, transport, electronic communications and public health, or those connected to the operation of businesses, infrastructure or facilities of “vital importance” to the country within the meaning of French law. The sectors concerned include, in particular, the artificial intelligence, space operations, sensitive-data storage, drones, cybersecurity, robotics and semiconductors sectors. 

In a typical project finance structure, a company (project company or special purpose vehicle) is usually set up specifically to design, build, and then operate the project.

The most commonly used legal structure for a project company is the société par actions simplifiée because it limits the shareholders’ liability to the amount of their equity contributions and offers a high degree of flexibility in its governance and operations.

This financing structure is usually “non-recourse” – ie, in the event of a default by the project company, lenders have no claim against the sponsors to recover their outstanding debt – or, alternatively, “limited recourse” (recourse against the sponsors solely during the construction period). Repayment of the loan is therefore based solely on the project’s expected revenues, and a key concern is how risks are shared among the different parties involved – such as the EPC contractor, operator, and offtaker – and what risks remain with the project company itself.

To protect their interests, lenders rely on a security package, which enables them, in a worst-case scenario, to access the project’s assets – such as through mortgages, pledges over movable assets and receivables – and to take control of the project company.

Project finance in France typically follows a standard model, combining equity from the project sponsors with senior debt provided by external lenders. The amount of equity required (which is subordinated to the lenders’ claims) varies depending on the project’s risk profile and complexity.

Bank loans remain the primary source of senior financing, largely because they offer the flexibility needed during the construction phase, where delays and changes in the disbursement schedule are common. Banks are generally better equipped to handle these uncertainties. Indeed, investment funds usually participate in project financing through subscription of bonds. Bond financings are less flexible than bank loans in some respects, particularly when it comes to features such as revolving credit lines or adapting to irregular drawdown schedules during construction. Moreover, investment funds are typically subject to strict constraints regarding fund performance, timing, and disbursement amounts, which may not align with the borrower’s needs or the unpredictable nature of project development.

However, some French alternative investment funds are now authorised to offer direct loans. New possibilities for structuring project finance, particularly for large or complex projects, have emerged. Notably, some investment funds now provide bridge financing, which allows sponsors to secure external funding during the project’s development stage.

Besides commercial banks and investment funds, the lending institutions most often involved in project finance in France include institutional lenders. Prominent among these are the European Investment Bank, the French Caisse des Dépôts et Consignations and the French Agence Française de Développement.

France, encompassing both mainland France and overseas territories, exploits a wide range of natural resources, including metallic and non-metallic minerals (eg, gold, bauxite, gypsum), biomass (plant and animal, excluding livestock), freshwater, and renewable energy (solar, wind and geothermal) sources.

Natural resources-related projects can be subject to a wide range of regulations, depending on their characteristics. For instance, timber exploitation is primarily governed under the French Forest Code, while large agricultural installations fall under the scope of the regime for permitted facilities (Installations classées pour la protection de l’environnement or ICPE), regulated by the French Environment Code. The exploration and exploitation of mineral resources are governed by the French Mining Code, which outlines the rules for exploration licences and concession agreements. Quarries fall under both the ICPE regime and certain provisions of the French Mining Code.

A common concern associated with the use of natural resources, regardless of their type, is their social and environmental impact. These issues have been longstanding. For instance, the Environmental Charter, integrated into the French Constitution in 2005, highlights the adverse effects of natural resource overexploitation on biodiversity and individual wellbeing (Recital No 5). Reflecting these priorities, the French Government adopted the “Resources for France Plan” in 2018, which outlines key objectives such as developing a programme for strategic metals. Furthermore, a recent reform of the French Mining Code, initiated in 2021-2022, has sought to better integrate health and environmental considerations.

In France, the management and exploitation of natural resources involve both public entities and private companies, often giving rise to legal disputes. These challenges frequently concern issues such as the validity of permits – eg, the annulment of a tungsten mine exploration license due to insufficient environmental considerations – or the liability of operators, such as claims against the state for environmental harm caused by historical metal pollution.

Exports may also face restrictions under certain circumstances. The government can impose controls on energy product exports during shortages. Additionally, EU Regulation 2023/1115 prohibits the export of certain commodities and products linked to deforestation, including wood-based packagings manufactured within the EU.

Certain projects require prior environmental authorisation issued by the local state services department (préfecture), depending on their size, nature or location. This authorisation combines a series of authorisation, permit, and exemption applications under the same procedure – eg, a permit to operate facilities which qualify as ICPEs and exemption requests for projects affecting protected species. It should be noted that projects affecting protected species will be granted an exemption when the applicant demonstrates that (i) certain conditions are met – specifically, the absence of any other satisfactory solution; (ii) that the derogation will not adversely affect the maintenance of protected species populations at a favourable conservation status within their natural range; and (iii) that the derogation serves a valid justification, such as “imperative reasons of major public interest”. Since 2023, certain renewable energy projects are deemed to automatically meet such criterion.

The environmental authorisation procedure consists of several stages and involves multiple stakeholders, as follows.

• Application preparation – a dossier is compiled, typically including an environmental impact assessment and a risk assessment, tailored to the project’s specifics.
• Administrative review – the dossier is submitted to the local state services department, verified, and shared with the relevant authorities (eg, Environmental Authority, local and regional agencies, nature protection councils).
• Public consultation – a three-month public consultation runs alongside the authorities’ examination.
• Final decision – the local state services department decides whether to grant the authorisation. Projects that do not meet health and environmental standards are rejected. Approved authorisations remain subject to judicial review.

Once in their operational phase, projects involving one or more ICPE are monitored and inspected by the state department responsible for environmental protection (Direction régionale de l’environnement, de l’aménagement et du logement). Additional requirements may be imposed by the prefecture; financial penalties may apply in the event of a breach, and environmental authorisation may be revoked if a breach is significant.