FDI in Spain

Overview by Globlatrade.net:

FDI in Figures

In twenty years, Spain has become the ninth global economic power thanks to its cheap workforce, the spectacular boom in tourism and, starting from the year 2000, the real-estate boom. The development of foreign investments illustrates these changes well. Spain came to depend more and more on its added value, both in terms of training and R&D, as well as high-tech services. The country has therefore made a radical turn towards renewable energies (wind and solar energy). In 2013, Seville will have the greatest photovoltaic production platform on the planet. In addition to this, Spain wants to become one of the world’s key research actors. In order to fulfill these ambitions, it has recently developed the “Malaga Valley” project, which its sponsors hope will become the greatest European research and innovation center dedicated to information and communication technologies.

In 2009, Spain’s FDI stock was EUR 465.5b. FDI flows fell sharply in 2009 with a process of disinvestment. The acquisition of holdings of suverain wealth funds in the Spanish petroleum company CEPSA by the UAE International Petroleum Investment Company was the largest acquisition of 2009. Madrid is the main destination for FDI flows, accounting for 62% of the total.

In terms of FDI appeal, the country’s strengths include: proximity to Latin America, with the presence of a number of Spanish multinational companies, boom in tourism, its highly efficient transport network and development of renewable energies.

Foreign Direct Investment 2007 2008 2009
FDI Inward Flow (million USD) 64,264 73,293 15,030
FDI Stock (million USD) 584,833 623,215 670,550
Performance Index*, Ranking on 141 Economies 76 59 114
Potential Index**, Ranking on 141 Economies 26 28 -
Number of Greenfield Investments*** 445 548 387
FDI Inwards (in % of GFCF****) 14.5 15.9 9.9
FDI Stock (in % of GDP) 40.6 39.1 45.9

Source: UNCTAD

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.


FDI Inflows By Countries and Industry

Main Investing Countries 2009, in %
UAE 28.3
France 19.8
UK 8.5
USA 7.3
The Netherlands 5.5
Germany 3.7
Main Invested Sectors 2009, in %
Manufacturing industry 38.6
Information and communication 13.8
Finance and insurance activities 10.6
Trade 9.7
Transport and storage 7.7
Real estate 4.6
Construction 3.9
Arti and leisure activities 2.7
Energy distribution 2.4
Administrative and welfare activities 1.8

Source: Invest in Spain. Ministère de l´industrie, du tourisme et du commerce.

Form of Company Preferred By Foreign Investors

Public Limited (Sociedad Anónima) or Limited Liability Corporation (Sociedad Limitada (S.L.))

Form of Establishment Preferred By Foreign Investors
Subsidiary company
Main Foreign Companies
In June 2007, their number stood at nearly 9,000 of which 34% in the Barcelona area.
To browse through news about foreign companies who invest in Spain, visit the website of Interes (Investment promotion agency).
Sources of Statistics
Bank of Spain
Treasury Department
Ministry of Industry, Tourism and Commerce

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Why You Should Choose to Invest in Spain

Strong Points
The country's main strong points are flexibility and adaptability of economic operators and in the quality of life the country offers.
Weak Points
The country's weak points are the low productivity of its manpower, its weak competitiveness as well as a growing trade balance deficit. The complexity of the regulation system with regard to the 17 Autonomous Communities is also a hindrance to investment.
Government Measures to Motivate or Restrict FDI
Spain applies the principle of free establishment and non-discrimination. Foreign investors can operate any type of business and under the same conditions as a local investor. The CEE Council Directive no. 88/361/CEE dated June 24, 1988, concerning the free movement of capital between the residents of member States was adopted in the Spanish legislation by Law no. 18/1992 of July 1, 1992, and came into effect on July 4, 1992 and by Royal Decree 1816/1991 no. 1816/1991 of December 20, 1991 on Foreign Economic Transactions.

The gaming, television, radio and air transport sectors are protected by restrictions for the investors residing outside an EU member country; it is the same for businesses manufacturing and selling arms. In the latter case, these restrictions also concern investors within the community.

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