Control of investments

The principle of free movement of capital and the exceptions to it, which include the right of Member States to adopt measures for reasons of public security or order, are established in articles 63 to 66 of the Treaty on the Functioning of of the European Union.

In 2017, the European Commission proposed the adoption of a community framework that would promote the control of foreign direct investment by Member States, to find a balance between the general openness of the EU to foreign direct investment flows and the defense of the essential interests of the EU.

As a result, the EU Regulation 2019/452, of March 19, 2019, for the control of foreign direct investments in the Union, which established a framework for the control of foreign direct investment for reasons of security or public order, in line with the control instruments that most OECD countries have implemented.

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

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

The regulations establish the need to obtain prior administrative authorization for a series of direct foreign investments in Spain that are considered to affect public order, public safety or public health, as long as they involve operations:

  • that are carried out, ultimately, by residents of countries outside the European Union and the European Free Trade Association, and imply that the investor begins to hold a participation equal to or greater than 10 percent of the share capital of a Spanish company or part of it, or acquires control over it, and,
  • in which the object of the investment or the investor incurs certain assumptions:
    • that the object of the investment operates in a series of areas detailed in section 2 of article 7bis of Law 19/2003, of July 4, which include critical infrastructures, critical technologies and dual-use, the supply of essential inputs, those with access to sensitive information and the media.
    • that the foreign investor meets certain characteristics. For example, it is controlled directly or indirectly by the government of a third country or it is found that there is a serious risk that it carries out criminal or illegal activities that affect public safety, public order or public health in Spain, as points out section 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 series of exceptions in the energy, communications and raw materials sector, which are developed in Royal Decree 571/ 2023

Likewise, in application of the Single Transitional Provision of Royal Decree-Law 34/2020, of November 17, investments by residents in countries of the European Union or the European Free Trade Association will also be subject to authorization when their value exceeds 500 million euros or 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 July 4.

To request investment authorizations, the form will be filled out Form for the Foreign Investment scrutiny procedure [DOCX] [105 Kb] (Last update on November 14, 2023), and will be sent to electronic office.

The making of foreign investments in Spain without authorization, if it is mandatory, or with non-compliance with the conditions established therein, will be considered a very serious infringement, for the purposes of the application of the sanctioning regime provided for in Chapter II of Law 19/2003, of July 4.

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

You can also check whether an investment operation must be subject to any of the investment control regimes through the same form and in the same electronic office already indicated based on art 9 of Royal Decree 571/2023. This is a binding consultation with a period of 30 days.

The aggregate data on operations subject to investment control in 2020 and 2021 can be consulted here:

For more information, it is recommended to consult the details of the applicable regulations. This text has no normative value.

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