Article adapted from the Instituto Español de Comercio Exterior (ICEX)
As a general rule, foreign investments are subject only to notification after the investment has been made. As of a Royal Decree of 1999 adapting Spanish law to a European Union agreement, exchange controls and capital movements are fully liberalized and in all areas there is complete freedom of action, though specific reporting obligations are still required.
The most noteworthy aspects of the ruling are as follows:
Foreign investments are generally subject to notification only after the investment has been made. However, prior notification is necessary if the investment is from a tax haven where the foreign interest exceeds 50% of the capital stock of the Spanish company in which the investment is made. In this case, once the investment has been reported, the investor may make their investment without having to wait for any reply from the authorities.
There is no obligation for foreign investments to be formalized in the presence of a Spanish notary public (unless specific legislation provides otherwise).
Investments in the air transportation and radio industries, in industries relating to minerals and raw mineral materials of strategic interest and mining rights, in the television, gaming, telecommunications, and private security industries, in industries concerned with the manufacturing, marketing or distributing of arms and explosives for civilian use, and in national security-related activities (these latter activities are subject to the clearance rules contained in the Royal Decree), will be subject to the requirements imposed by the relevant body established by industry-specific legislation.
The General Directorate for Trade and Investments (DGCI) of the Ministry of Industry, Tourism and Trade can require Spanish companies which have foreign shareholders and Spanish branches of non-resident persons specifically or generally to file an annual report on the status of their foreign investments.
Owners of investments, Spanish companies with non-resident shareholders, public authenticating officials, companies providing services, or investment companies and credit entities and other
finance entities that have taken part in investment transactions may also be required by the General Directorate to provide the information necessary in each particular case.