Buying a Company in Spain as a Foreign Investor: FDI Rules and Process [2026]

Quick answer

Most foreign acquisitions of Spanish companies are liberalised, but every buyer should test four points before signing or closing: investor residence and ultimate ownership, the percentage or control acquired, the target's activity and any investor-specific risk factors. For many non-EU/EFTA investors, prior authorisation can apply when the buyer acquires at least 10% or control of a Spanish company and the target or investor falls within Article 7 bis of Law 19/2003. Until 31 December 2026, a transitional regime can also capture certain EU/EFTA investments in Spanish listed companies or unlisted companies where the investment exceeds €500M. A separate post-closing D-1A declaration is generally due within one month when a non-resident reaches at least 10% of capital or voting rights.

Can a foreign investor buy a Spanish company?

Yes. Spain's general regime permits foreign investment, subject to foreign direct investment screening, sector-specific restrictions and statistical reporting. The buyer and any individuals appearing before the notary may need Spanish tax identification numbers and properly legalised powers of attorney; these formalities should be confirmed early with the closing notary.

Prior FDI authorisation and the post-closing Investment Registry declaration are different obligations. An acquisition may require one, both or neither, depending on the investor, percentage, target and transaction structure.

When can prior FDI authorisation be required?

The general screening test under Article 7 bis of Law 19/2003 should be applied in stages:

Test	Question	Relevant threshold or factor
Investor	Who is investing and who ultimately owns or controls it?	A non-EU/EFTA resident, or an EU/EFTA vehicle ultimately owned or controlled above 25% by non-EU/EFTA residents
Transaction	What stake or influence is being acquired?	At least 10% of share capital, or control of all or part of the Spanish company under Spanish competition-law criteria
Target	Does the company operate in a protected sector?	Critical infrastructure; critical or dual-use technologies; essential inputs; sensitive data; or media
Investor profile	Do additional risk factors apply?	Government control, sensitive investments or activities in another EU Member State, or a serious risk of illegal activity affecting security, public order or public health

Authorisation can therefore be required because of the target's sector or because of the investor's profile. The statement that only government-controlled investors are caught outside strategic sectors is incomplete: Article 7 bis.3 contains three separate investor-related tests.

Can an EU or EFTA investor require authorisation in 2026?

Yes, in a limited group of transactions. Under the transitional regime extended by Royal Decree-Law 1/2025, until 31 December 2026 the screening rules in Article 7 bis.2 can apply to investments made by residents of other EU or EFTA countries in:

• Spanish listed companies; or
• Spanish unlisted companies where the value of the investment exceeds €500M.

For this transitional regime, direct investment means reaching at least 10% of capital or acquiring control. It also covers Spanish-resident vehicles ultimately owned or controlled above 25% by residents of other EU/EFTA countries. This temporary rule must be checked separately from the permanent non-EU/EFTA regime.

Does turnover below €5M always create an exemption?

No. The €5M exemption in Article 17.2 of Royal Decree 571/2023 is limited to investments falling within letters b), c), d) and e) of Article 7 bis.2: certain technologies, essential inputs, sensitive data and media. It does not create a blanket exemption for critical infrastructure, investor-profile cases under Article 7 bis.3 or every energy transaction.

The exemption also does not apply where the relevant technology was developed under programmes or projects of particular interest for Spain. Certain electronic communications operators and investments involving research or exploitation of strategic raw-material deposits remain subject to authorisation. Energy investments follow separate tests in Article 17.1.

What happens when the FDI position is unclear?

Before making the investment, the buyer may submit a voluntary consultation under Article 9 of Royal Decree 571/2023. The competent Directorate-General has 30 business days to respond, although a request for additional information suspends the clock. The response is binding on the consulted administration in relation to that applicant. While the consultation is pending, an authorisation application cannot be filed; if the period expires without an express response, the buyer may submit the formal authorisation application.

If authorisation is required, the statutory maximum period for the formal decision is three months, subject to procedural suspensions. The FDI timetable should therefore be reflected in the LOI, conditions precedent and long-stop date.

What happens if a required authorisation was not obtained?

Under Article 11 of Royal Decree 571/2023, an investment completed without the required prior authorisation lacks validity and legal effect until it is legalised. The investor cannot exercise economic or political rights in the Spanish target until the necessary authorisation is obtained. This is why the analysis belongs before signing or closing, not in the post-closing checklist.

How does the acquisition process work?

Step	Main work	FDI and regulatory point
1. Structure and target search	Define acquisition vehicle, thesis, financing and target criteria	Map investor ownership and identify regulated or strategic sectors
2. Indicative offer and LOI	Valuation, price structure, exclusivity and information access	Include authorisation risk, cooperation obligations and timetable
3. Due diligence	Financial, tax, legal, labour, commercial and operational review	Confirm Article 7 bis, sector rules and whether a consultation or filing is needed
4. SPA and signing	Price mechanism, warranties, conditions precedent and remedies	Do not close before required authorisation; set a realistic long-stop date
5. Closing and reporting	Transfer, payment, corporate actions and integration	Complete the Investment Registry declaration and other post-closing filings

A competitive or off-market acquisition commonly takes 6 to 12 months, but a specific deal can be shorter or longer. Screening, merger control, financing or complex due diligence can materially change the timetable.

When is the post-closing D-1A declaration due?

Under Articles 4 and 5 of Royal Decree 571/2023, a non-resident investment reaching at least 10% of the capital or voting rights of a Spanish company is generally declared to the Investment Registry after completion. Order ECM/57/2024 sets a maximum period of one month and uses form D-1A for company investments.

Where a Spanish notary intervenes and the investor supplies all required data, the notary submits the information through the General Council of Notaries. If the information is incomplete, the non-resident investor remains responsible and must be warned of the obligation. Transactions originating in or ultimately linked to non-cooperative jurisdictions can also trigger a separate prior declaration.

What taxes does a foreign buyer face in a share deal?

A transfer of shares in a Spanish company is generally not subject to VAT and is normally exempt from indirect transfer taxation. An anti-avoidance rule can apply where control is obtained over an entity whose assets consist mainly of Spanish real estate not used in a business activity. The exact analysis depends on the target's assets and transaction steps.

An asset deal is different. A transfer of a business capable of operating as an autonomous economic unit may fall outside the scope of VAT, but not every collection of assets qualifies. Corporate income tax, interest deductibility, withholding taxes and future dividend or exit treatment depend on the acquisition structure and applicable treaty. Structuring should therefore be decided before the LOI.

For related tax background, see the Article 21 participation exemption and taxes on selling a company in Spain.

What should a foreign buyer do first?

1. Document the buyer's immediate and ultimate ownership.
2. Classify the target's activities, licences, data and infrastructure.
3. Separate prior authorisation, sector approvals and post-closing reporting.
4. Reflect regulatory risk and timing in the LOI and SPA.
5. Coordinate M&A, tax and legal work before approaching signing.

FDI screening and tax treatment are fact-specific. This guide is general information, not a substitute for advice on a particular transaction. To organise a Spanish acquisition, read how to define a buy-side mandate or contact a Capittal partner confidentially.