COVID-19 Foreign Investments



13th MARCH


The March 18th 2020 edition of the Official State Gazette has published the Royal Decree/Law 8/2020 of March 17th 2020 on urgent and the extraordinary measures to confront the economic and social impact of COVID 19. This includes tightening the requirements for foreigners to invest in certain Spanish companies.

In this respect, the prior regime of liberalisation of certain foreign direct investments in Spain has been suspended, effectively prohibiting these investments unless special authorisation is obtained.


“Foreign direct investments” (FDI) are understood as all those investments made by residents from countries outside the EU and the European Free Trade Association (Iceland, Norway, Switzerland and Lichtenstein) under which the investor  obtains title, by means of the investment, to 10 per cent or more of the share capital of a Spanish company, or when as a result of the corporate operation, act or legal business activity, it is effectively involved in the management or control of that company.


The suspension affects specifically FDI when it refers to public order, public security and public health in the following sectors:


  • Critical infrastructure, whether physical or virtual (including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructures and sensitive facilities), as well as land and property properties that are key to the use of these infrastructures  specifically those referred to in Law 8/2011 of 28 April 2001 establishing measures for the protection of critical infrastructure.


  • Critical technologies and dual-use items as defined in Article 2(1) of Council Regulation (EC) No 428/2009, including AI, robotics, semiconductors, cybersecurity, the aerospace, defence, energy storage, quantum and nuclear, as well as nanotechnologies and biotechnologies.


  • Supply of critical resources, in particular, energy, specifically those that are regulated by Law 24/2013 of 26 December, of the Electricity Sector, and in Law 34/1998 of 7 October on the Hydrocarbons, or those relating to raw materials, as well as food security.


  • Sectors with access to sensitive information, in particular personal data, or with the capacity to control such information, in accordance with the Organic 3/2018 of 5 December on Personal Data Protection and Guarantee of digital rights, as long as this sensitive information directly affects to public order, public security and public health.


  • Media.


Investment in Spanish companies is also forbidden if:


  • Foreign investor is directly or indirectly controlled by a foreign government, including public bodies and military.  


  • If the foreign investor has made investments into sectors affecting security, public order and public health in any other EU country.


  • If there are any type of judicial or administrative proceedings against the investor. 


The suspension of the FDI liberalisation regime will be subject to obtaining   authorization, in accordance with article 6 of Law 19/2003 (this authorization shall be  given by the Spanish Ministry of Economy in accordance with Article 8 of the Order of 28 May 2001 establishing the applicable procedures for investment disclosures and its settlement, together with  the procedures for submission of annual reports and authorisation files). All operations carried on without said authorization shall not be valid nor have any legal effects, if they are not legalized in this manner. 


This suspension shall remain in force until the Council of Ministers decides to lift it. .


31st MARCH


The suspension of the foreign investment liberalisation regime has been modified and clarified by the entry into force of Royal Decree Law 11/2020 of 31 March. Specifically, two main areas have been modified:


Firstly, the suspension of the foreign investment liberalization regime applies to investments made by residents from outside the European Union and the European Free Trade Association or by residents of the European Union and the European Free Trade Association whose real ownership corresponds to residents from outside the European Union and the European Free Trade Association. It is understood that this real ownership exists when they directly or indirectly possess a percentage greater than 25 % of the capital or voting rights of the investor, or when by other means they exercise control, directly or indirectly, over the investor.


Secondly, authorisation to carry out this type of investment is regulated by a simplified process if:


  • There is evidence of an agreement between the parties or a binding offer in which the price was fixed, determined or determinable prior to 18 March 2020.


  • Those whose amount is equal to or greater than 1 million and less than 5 million euros.


On the other hand, those investments not exceeding 1 million euros are exempted from the obligation to obtain authorization.