Foreign Investment In Spain: Regulations, Proceedings

Foreign investment is an international capital movement undertaken with the intention of obtaining a direct and lasting influence on the business activities of the enterprise receiving the capital or of injecting new funds into an enterprise in which the investor already holds a significant interest.

These foreign investments are mostly made by multinational companies. Foreign investment is an essential basis for economic growth and poverty reduction in many countries. Their correlation is both positive and negative.

By encouraging foreign entrepreneurship, Spain has become a profitable option for foreign investors within the EU. Spain intends to strengthen its economy through internationalisation and the general liberalisation of foreign investments.


There are special regulations for foreign investments in specific sectors such as:

  • aviation;
  • broadcasting;
  • minerals;
  • raw materials of strategic importance;
  • mining;
  • television;
  • games;
  • telecommunications;
  • private security;
  • manufacture, marketing or distribution of weapons and explosives for civil use;
  • activities related to national defence.

The Council of Ministers may suspend the general liberalisation applicable to foreign investment if, by reason of its nature and form or the conditions under which it is carried out, it concerns or may concern activities connected with:

  • the exercise of public authority,
  • public policy,
  • public security,
  • public health.

Foreign investors can be:

  • Natural persons not resident in Spain. This includes both Spaniards and foreigners living abroad or having their main residence there;
  • Legal entities with headquarters abroad and public bodies with foreign sovereignty.

The change of the registered office of a legal entity or the transfer of the domicile of a natural person has an effect on the incorporation

Categories of foreign investment

Foreign investing in Spain is classified into the following categories according to the way they are handled by the authorities:

  • Participation in Spanish companies whose capital is not listed on secondary markets. This includes both the establishment of a company and the subscription or acquisition of all or part of its shares. This heading also includes the acquisition of subscription rights, convertible bonds or similar securities giving the right to participate in the share capital, as well as all legal transactions relating to the acquisition of political rights.
  • Investments in the share capital of Spanish companies whose capital is wholly or partially admitted to listing on Spanish or foreign securities markets, and in subscription or similar rights, regardless of the place of issue or acquisition.
  • Foundation and capital expansion of branches.
  • Subscription and purchase of transferable bonds issued by Spanish residents.
  • Participation in investment funds registered with the Comisión Nacional Del Mercado de Valores.
  • Acquisition of real estate located in Spain whose total value exceeds EUR 3,005,060.52 or regardless of the amount of the investment if it comes from a tax haven.
  • Other forms of investment: The establishment and conclusion of or participation in contracts for participation accounts, foundations, economic interest groups, cooperatives, and goods communities, if the total value of the involvement of the foreign investors exceeds EUR 3,005,060.52 or regardless of the amount of the investment if it originates from a tax haven.

Official processing

Foreign investments in Spain and their liquidation must be declared to the Investment Register of the Ministry of Industry, Tourism and Trade. The following regulations must be observed when registering:


If an investment originating from a tax haven must be registered by the investor both before and after its implementation, regardless of the registration that must be made after the investment has been implemented.

However, investments in listed securities, in investment funds registered with the National Commission of the Securities Market and foreign investments that do not exceed 50% of the share capital of the Spanish company receiving the investment, either before or after the investment is made, are exempt from prior notification.

The pre-notification is valid for six months from the date of its submission. The liquidation of foreign investments originating from tax havens does not require prior notice prior to the liquidation of the investment.

Subsequent registration

As a rule, the non-resident foreign investor must register the investment. If operations are certified by a Spanish notary public, the latter must provide the relevant data of the operation. Especially in the case of investments in listed securities, it is the intermediary service companies, credit institutions or finance companies that are obliged to register the investment.

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Investments in securities that are not listed on secondary markets must, if necessary, be notified by the companies to which the securities are deposited or managed. If such an investment is made through a company, securities agency or credit institution, these companies are responsible for the notification.

In the case of investments in registered shares, the Spanish company receiving the investment is obliged to notify. Investments in Spanish investment funds must be registered by the companies responsible for the management of the investment fund. As regards the form and deadline for the notification of investments, the notification must be submitted within one month for investments in unlisted companies, branches, and real estate.

In the case of investments in listed securities, the obligation to register lies with the institutions that manage and administer the securities account or with the institutions that, without managing the securities account, carry out purchase or sale transactions with the aforementioned securities on behalf of non-residents.

Finally, Spanish companies with foreign capital participation and non-resident branches located in Spain must, in certain circumstances or when requested, submit an annual report on the development of the investment to both the Directorate-General for Trade and Investment of the Ministry of Industry, Tourism and Trade within nine months of the end of the financial year. Failure to comply with the obligation to declare foreign investments is punishable by law.

Transfers to foreign countries

Foreign investors have the right to transfer abroad the proceeds of their investment and legally obtained income. This right is compatible with the official procedures already dealt with and with the special regulations for exchange control, which have already been fully liberalised.

Would you like to get advice when investing or founding a company in Spain? GM Tax Consultancy will advise and support you in all tax matters relating to your business activities. Please do not hesitate to contact our tax advisors in Barcelona by phone or email if you wish to make an inquiry in this regard.

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