Investment control

The principle of free movement of capital and the exceptions to it, including the right of Member States to take measures on grounds of public security or public policy, are set out in Articles 63 to 66 of the Treaty on the Functioning of the European Union.

In 2017, the European Commission proposed the adoption of an EU framework that would boost the control of foreign direct investment by Member States while striking a balance between the general openness of the EU to foreign direct investment flows and the defence of the EU's essential interests.

As a result, EU Regulation 2019/452, of 19 March 2019, for the control of foreign direct investment in the Union, was approved. It established a framework for the control of foreign direct investment on grounds of security or public order, in line with the control instruments put in place by most OECD countries.

Regulation (EU) 2019/452 provides that Member States may assess risks due to significant changes in the ownership structure of an enterprise, or in the key characteristics of foreign investors, and guides the application of investment screening by providing a non-exhaustive list of factors that may be taken into account in determining whether a foreign direct investment may affect security or public order. Furthermore, it establishes a mechanism for cooperation between Member States to promote the effectiveness of investment screening. It also provides for the preparation of an Annual Report on the application of the Regulation by the European Commission.

In Spain, since its introduction in 2020, the control of foreign investments has been regulated in Article 7 bis of Law 19/2003, of 4 July [PDF], on the legal regime governing capital movements and foreign economic transactions, the Sole Transitional Provision of Royal Decree-Law 34/2020, of 17 November [PDF], on urgent measures to support business solvency and the energy sector, and in tax matters, and Royal Decree 571/2023, of 4 July, on foreign investments.

The regulations provide for the need to obtain prior administrative authorisation for a number of foreign direct investments in Spain that are considered to affect public order, public safety or public health, provided that these are operations:

  • which are ultimately carried out by residents of countries outside the European Union and the European Free Trade Association, and which involve the investor acquiring a holding equal to or greater than 10% of the capital stock of a Spanish company or part thereof, or acquiring control over the latter, and,
  • in which the subject of the investment or the investor falls under certain assumptions:
    • that the object of the investment operates in a number of areas detailed in section 2 of Article 7bis of Law 19/2003, of 4 July, including critical infrastructure, critical and dual-use technologies, the provision of critical inputs, those with access to sensitive information and the media.
    • that the foreign investor meets certain characteristics. For example, the investor must be directly or indirectly controlled by the government of a third country or there must be a serious risk of criminal or illegal activities affecting public safety, public order or public health in Spain, as stated in paragraph 3 of Article 7bis.
    • Investments in Spanish companies with a turnover of less than 5 million euros in the last fiscal year are exempt, except for a number of exceptions in the energy, communications and raw materials sectors, which are provided for in Royal Decree 571/2023.

Also, in application of the Sole Transitory Provision of Royal Decree-Law 34/2020, of 17 November, investments by residents of European Union or European Free Trade Association countries will also be subject to authorisation when their value exceeds 500 million euros or they are directed to companies listed in Spain, provided that they invest in any of the areas contemplated by section 2 of Article 7bis of Law 19/2003, of 4 July.

To apply for investment authorisations, form for the Foreign Investment Screening Procedure [DOCX] [89 Kb] must be completed and forwarded to the electronic office.

Making foreign investments in Spain without authorisation, if required, or in breach of the conditions established therein, shall be considered a very serious infringement, for the purposes of the application of the penalty regime provided for in Chapter II of Law 19/2003, of 4 July.

They will be subject to their own regime and will also require prior administrative authorisation:

It is also possible to check whether an investment operation is subject to any of the investment control regimes using the same form and in the same electronic office already mentioned in accordance with art. 9 of Royal Decree 571/2023. This is a binding consultation with a 30-day deadline.

Aggregated data on operations subject to investment control in 2020 and 2021 can be found here:

For further information, please refer to the details of the applicable regulations. This text has no normative value.

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