Declaring or getting approval for foreign investment in a Spanish company

Key rules

• Declaration: Most foreign investments are declared after the investment, through the notary or your Spanish bank.
• Tax havens: If you invest from a tax haven, you must declare before you invest.
• Authorisation: Non-EU/EFTA investors buying 10% or more of a Spanish company in a strategic sector need government authorisation before closing.
• Decision time: The ministry decides within 3 months, and silence means refusal.

The short answer

Almost every foreign investment in a Spanish SL is declared, not approved. Prior authorisation is the exception. It applies only in strategic sectors or above ownership thresholds. Work out which route you are on before you sign, because closing without a required authorisation causes serious trouble.

When you only declare

Most foreign investments are declared after the investment. Your notary or your Spanish bank files the declaration for you, using the official form, with the investment register at the Ministry of Economy, Trade and Business. It is mostly automatic, and the declaration is used for statistics and control.

The one exception is an investor from a tax haven. You must declare before you invest.

When you need authorisation first

Authorisation is a government approval you must get before closing. Non-EU/EFTA investors buying 10% or more of a Spanish company in a strategic sector need it. The ministry decides within 3 months, and silence means refusal.

Check these points in order:

• Where you invest from. Non-EU/EFTA investors are covered. EU/EFTA investors are covered too if their ultimate owners are outside the EU.
• The sector. Strategic sectors include critical infrastructure, technology, supplies, energy, health, media and food.
• How much you will hold. 10% or more of the company, or gaining control of it, counts. A 10% threshold also applies to listed companies.
• Who controls you. If a foreign government controls you, you need authorisation too.
• Non-listed companies. A temporary extension has applied to non-listed companies where the investment exceeds €5 million.

You apply to the Dirección General de Comercio Internacional e Inversiones before closing. Do not sign a closing that cannot be undone until you have the decision.

If you skip a required authorisation

The transaction is legally invalid and has no effect until it is authorised. You can also face fines, which for serious breaches can reach the value of the transaction, and an order to restore the earlier position.

Before you commit

Sector lists and thresholds have been changed and extended several times. Ask the ministry, or a lawyer who handles foreign investment, to confirm your case before you close. The timeline, checklist and FAQ below set out the steps and the common questions.

Timeline and deadlines

• File the authorisation application if you are a non-EU/EFTA investor buying 10% or more of a company in a strategic sector: before closing

• Wait for the ministry's decision; silence means refusal: within 3 months of your application

• Declare the investment before you invest if you are an investor from a tax haven: before the investment

• Declare any other investment through the notary or your Spanish bank: after the investment is completed

Checklist

• Check whether you invest from outside the EU and EFTA, or from inside them with non-EU ultimate owners.

• Check whether the company works in a strategic sector such as critical infrastructure, technology, energy, health, media or food.

• Work out whether you will hold 10% or more of the company, or gain control of it.

• Check whether you are controlled by a foreign government, which also needs authorisation.

• Ask your notary or Spanish bank to file the declaration with the investment register if no authorisation applies.

• Declare before you invest if you are an investor from a tax haven.

What to watch out for

• Closing without required authorisation: A deal made without required authorisation is legally invalid and ineffective until it is authorised. You can also face fines, which for serious breaches can reach up to the transaction value, and an order to restore the earlier position. Apply before closing and do not sign until you have the approval.

• Silence means refusal: If the ministry does not answer within 3 months, the application is treated as refused, and you cannot go ahead. File early and follow up with the ministry before the 3 months run out.

• Sector and threshold rules keep changing: The strategic sector list and the temporary rules, including the €5 million test for non-listed companies, have been extended and amended repeatedly. You may need authorisation even for a small deal. Ask the ministry or a Spanish lawyer which rules apply before you commit.

Frequently asked questions

Who files the declaration for a foreign investment in a Spanish SL?

The declaration is usually filed through the notary or your Spanish bank, using the official form.

What happens if I invest without the authorisation I needed?

The transaction is legally invalid and ineffective until it is authorised. You can also face fines, which for serious breaches can reach up to the transaction value, and an order to restore the earlier position. Apply before closing to avoid this.

Do EU or EFTA investors ever need prior authorisation?

Yes, an EU or EFTA investor can need prior authorisation if the ultimate owners are outside the EU and EFTA. The investment must also be in a strategic sector. If that is your case, ask the ministry before you sign.

Which sectors count as strategic for authorisation?

Strategic sectors include critical infrastructure, technology, energy, supplies, media, health and food. A temporary rule also covers non-listed companies when the investment exceeds €5 million. Confirm whether your target company's activity falls in one of them.