The Spanish Foreign Direct Investment (“FDI”) legal regime provides for the need to obtain prior administrative authorisation for investments made in strategic sectors that are considered to affect public order, public safety or public health. 

The national authorisation regime has generally applied to non-European Union (“EU”) and non-European Free Trade Association (“EFTA”) investors, and to EU/EFTA residents whose beneficial ownership is held by residents of countries outside the EU and the EFTA. However, since September 2020, it also provides for a temporary screening mechanism that applies to certain investments made by EU/EFTA residents. This extension of the FDI scope is due to the economic effects resulting from the Covid-19 pandemic, which led the Spanish Government to approve the Royal Decree-Law 34/2020, introducing these new (transitional) control measures for such investments meeting specific thresholds. 

In particular, this transitional regime triggered the obligation to undergo the authorisation clearance mechanism for investments made by EU/EFTA residents when investing in listed companies or when the total value of the investment exceeds EUR 500 million. The regime was initially set to remain in effect only until 31 December 2021 and, after multiple renewals, it was scheduled to end on 31 December 2024.

On 23 December 2024, the Spanish Government approved the so-called “Omnibus” Royal Decree-Law (Royal Decree-Law 9/2024), which included a further extension of the transitional FDI regime. This regulation was, however, rejected by the Spanish Congress and the extension therefore lost its validity, although only for a few days. On 29 January, the Spanish Government issued a new Royal Decree Law (Royal Decree-Law 1/2025, of 28 January, which approves urgent measures in economic, transport, and social security matters and to deal with situations of vulnerability), officially extending the requirement for prior authorisation of FDI to EU/EFTA investors, which will now remain in force (at least) until 31 December 2026.

For the avoidance of doubt, this extension does not modify the current Spanish FDI regime (which has been addressed in more detail in our Jurisdictional Guide on Foreign Direct Investment, available here) but it means that EU/EFTA investors must continue to monitor carefully whether their operations in Spain may be subject to FDI screening when the above-mentioned thresholds are met.

This further extension of the EU/EFTA investor regime came into force at the beginning of 2025, a year in which potential amendments may be expected regarding the EU FDI framework, as a result of the legislative Proposal for a new European Regulation on the Screening of FDI in the EU. The Proposal aims to revise the current EU FDI Screening Regulation (Regulation (EU) 2019/452) and to increase coherence and harmonisation between the control mechanisms of the EU Member States, in order to afford more efficient and effective procedures across the EU. The actual effects on the Spanish FDI regime are yet to be seen.

If you need more information or further guidance in this area, please contact Candela Sotés.

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