Foreign Direct Investment in Spain

Overview by

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.


Country Comparison For the Protection of Investors

  Spain OECD United States Germany
Index of Transaction Transparency* 5.0 6.0 7.0 5.0
Index of Manager’s Responsibility** 6.0 5.2 9.0 5.0
Index of Shareholders’ Power*** 4.0 6.8 9.0 5.0
Index of Investor Protection**** 5.0 6.0 8.3 5.0

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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.

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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.
Bilateral Investment Conventions Signed By Spain
Spain has signed bilateral agreements with more than fifty countries. 47 agreements can be downloaded from the website of UNCTAD: click here to download these agreements. They define the framework for foreign investment protection in Spain for each of the signatory countries.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Acquisition of Holdings
The acquisition of majority interest by a foreign company in a Spanish company is authorized provided that the business is not in the regulated sector of production and trade of weapons.
Obligation to Declare
Investment portfolios from an EU member state are exempt from all declarations whatever their amount. Direct investments can require a prior declaration, when the investment amount or the granted loans exceed 30,000 Euros for a foreign interest holding higher than 50%. The request is to be made with the Register of Foreign Investments, from the Directorate General of Commercial Policies and Foreign Investments (DGPCIE).
Competent Organization For the Declaration
Sub-secretary of state for Commerce
Requests For Specific Authorizations
Find Investment Service Providers in Spain on

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Investment Opportunities

Investment Aid Agency
Tenders, Projects and Public Procurement
Visionnetware, Competitions and Tenders
Ted - Tenders Electronic daily, Business opportunities in EU 27
Globaltenders, Tenders & Projects from Spain
Tenders Info, Tenders in Spain
DgMarket, Tenders Worldwide
Other Useful Resources
The investment aid agencies of the autonomous communities

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  • Investment Climate in Spain

    A. The government of Spain recognizes the value of foreign investment and the economic importance of attracting more. There have been no significant changes in Spain's regulations for investment and foreign exchange under either the Socialist Party (PSOE) government that took office in March 2004 and was re-elected...

    U.S. Commercial Service Poland on 1 Mar 2010 related to Foreign Direct Investment in Spain

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