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Foreign Direct Investment

After falling as a result of the financial crisis, Spanish FDIs recovered in recent years due to an increase in competitiveness and investor confidence in the country. Following the outbreak of the Covid-19 pandemic that hit the Iberian state hard, FDI inflows totalled USD 9.7 billion in 2021: although increasing compared to one year earlier (+72%), they were still much lower than the pre-crisis level (USD 17.4 billion in 2019 – UNCTAD’s 2022 World Investment Report). In the same year, FDI stock reached USD 819.7 billion. The industry attracting the most foreign investment in 2021 was ‘electricity, gas, steam and air conditioning supply’, followed by investment in ‘specialised construction activities’, ‘programming, consultancy and related activities’, and ‘retail trade, except motor vehicles’. As for the countries where this investment came from, this list was led by Luxembourg, France, the Netherlands, the United Kingdom, the U.S. and Germany (data by the State Secretariat for Trade at the Spanish Ministry of Industry, Trade and Tourism). The Region of Madrid posted the highest investment volume over the year, ahead of Catalonia, the Basque Country, Andalusia, and the Region of Valencia. Overall, Spain was the fourth country in the world in 2021 in terms of the most greenfield projects received from foreign direct investment (fDi Intelligence). According to the latest figures from OECD, FDI inflows to Spain reached USD 21.3 billion in the first half of 2022, compared to USD 14.4 billion in the same period one year earlier (+47.9%). Between January and November 2022, Spain attracted FDI projects worth an estimated USD 32.8 billion, up by 23.9% from the same period of 2021, according to the latest figures from fDi Markets.

The country’s strengths in terms of FDI attractiveness include a restructured financial sector, the boom in tourism, its highly efficient transport network, its development of renewable energies and the cultural proximity to Latin America, with the presence of a number of Spanish multinational companies. Spain also aspires to become one of the world's key research actors. On the other hand, the country has high levels of private and public debt, a very negative net external position and a high level of structural unemployment. However, Spain suspended the FDI liberalisation regime and government authorisation is now required for direct investments of more than 10% of a Spanish company's capital made by residents of non-EU or EFTA countries (including the UK) in certain sectors, including critical infrastructure and technologies, media and food safety. Spain ranks 63rd out of 82 countries in the Economist Business Environment ranking and 36th out of 63 in the World Competitiveness Ranking. Furthermore, it is ranked 51st out of 176 economies in the 2023 Index of Economic Freedom.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 17,94821,95734,811
FDI Stock (million USD) 804,418782,903787,311
Number of Greenfield Investments* 558849861
Value of Greenfield Investments (million USD) 13,62632,65244,588

Source: UNCTAD - Latest available data.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

Country Comparison For the Protection of Investors Spain OECD United States Germany
Index of Transaction Transparency* 7.0 6.5 7.0 5.0
Index of Manager’s Responsibility** 6.0 5.3 9.0 5.0
Index of Shareholders’ Power*** 6.0 7.3 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.


What to consider if you invest in Spain

Strong Points

The country's main strong points are:

  • Flexibility and adaptability of economic operators 
  • The cultural proximity to Latin American countries, making Spain a bridgehead to those countries
  • A developed infrastructure network
  • A diversified economy that welcomes big international companies
  • A government pursuing reform policies
  • Improved financial state of enterprises
  • An important tourism sector
  • Quality of life
Weak Points

The country's weak points are 

  • State unity threaten by the secession movement in Catalonia
  • High unemployment rate 
  • Low productivity of certain enterprises
  • High indebtedness (public, private and exterior)
  • A growing trade balance deficit
  • The complexity of the regulation system with regard to the 17 Autonomous Communities
Government Measures to Motivate or Restrict FDI
Spain applies the principle of free establishment and non-discrimination of foreign investors. Foreign investors can operate any type of business under the same conditions as a local investor. The CEE Council Directive no. 88/361/CEE from 1988, concerning the free movement of capital between the residents of member States was adopted in the Spanish legislation by Law no. 18/1992 and by Royal Decree no. 1816/1991 on Foreign Economic Transactions. The gaming, television, radio and air transport sectors are protected by restrictions on investors residing outside an EU member country; it is the same for businesses manufacturing and selling arms. In the latter case, these restrictions also applies to investors within the European Community.  

The Government provides various incentives for investors, such as grants, tax benefits, professional training, preferential access to credit, etc. For more information consult this link. ICEX Spain Trade and Investment is a public corporation at the national level whose mission involves promoting the internationalization of Spanish companies, to support their competitiveness and add value to the economy as a whole, as well as attracting foreign investment to Spain. Moreover, since Spain is an EU Member State, potential investors can benefit from European aid programs, which make investment in Spain even more attractive.

The Re-industrialization Aid and Industrial Competitiveness Program 2019 is intended to encourage new industrial plants either by transfer of productive activity from another previously existing site or creating a new establishment, as well as increasing production capacity through the introduction of new lines of production in existing facilities. It aims also at developing the “Connected Industry 4.0 technologies”.


Investment Opportunities

The Key Sectors of the National Economy
Real estate, Energy, Finance and insurance, Telecommunications, Wholesale trade and retail trade, Manufacturing of non-metallic minerals, Construction, Civil engineering, Business consultancy, Transportation and storage.
High Potential Sectors
The website Invest in Spain suggests a range of investment opportunities related to the industrial sectors (aerospace, life sciences, chemical sector, automotive and ITC) and to the Spanish regions.

In the energy sector, the government plan for renewable energies represents an opportunity for investments in technological innovation. The biotechnology sector is developing faster in Spain than in other EU countries. The investments in this sector are growing at a rate of more than 25% per year, making Spain the fourth biggest contributor in the world in scientific production in the biotechnology sector. According to the Spanish Institute for External Trade, the chemical, pharmaceutical and plastics industry represent great investment opportunities.

In the agrarian sector, Spain has become the largest European producer of organic foodstuff. It is one of the top markets in the EU for legumes, nuts and sea products.

Spain has become one of the most attractive destinations for call centres. It has attracted several multinationals (Avis, Hewlett-Packard, Citigroup, etc.) thanks to a labour cost 30% less expensive than in other European countries. R&D in the Information Technology (IT) and data processing (software development, artificial intelligence, supercomputers, etc.) is also one of the spearheads of Spain. Finally, numerous investments in property for development of tourism infrastructure are possible, even though some tourist areas are saturated.

Privatization Programmes
No privatisation has been announced.
Tenders, Projects and Public Procurement
Ted - Tenders Electronic daily, Business opportunities in EU 27
Globaltenders, Tenders & Projects from Spain
Tenders Info, Tenders in Spain
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors

The Spanish government retains control in the following sectors:

  • Energy. The government retains a controlling stake (that is, more than 51% ownership, including 100%) in Ensa, Grupo Enusa and Grupo Hunosa. It retains a minority stake (that is, less than 50% ownership) in Enagás, Enresa and Red Eléctrica Corporación.
  • Foreign trade and finance. The government retains a controlling stake in Grupo Cofivacasa, Defex (in liquidation) and Grupo Navantia. It retains a minority stake in Hispasat and Indra.
  • Food environment and leisure. The government retains a controlling stake in CETARSA, Hipódromo de la Zarzuela, MAYASA, Grupo Mercasa, SAECA and Grupo Tragsa. It retains a minority stake in Ebro Foods.
  • Communications and transport. The government retains a controlling stake in, among others, Agencia EFE, Grupo Correos and Grupo SEPIDES. It retains a minority stake in International Airlines Group (IAG), Airbus Group and Alestis Aerospace.
Sectors in Decline
Textile, agriculture.