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Significant changes in the Spanish FDI regime: broader scope and protective rules that affect EU/EFTA investors

Spanish foreign direct investment (FDI) regime set out in Law 19/20031 has just been amended by Royal Decree-Law 34/2020, of 17 November (RDL 34/2020), which enters into force on 19 November 2020.

RDL 34/2020 introduces significant amendments to the current regime that hardens the conditions for the authorization of FDI. These amendments significantly widen the investments subject to authorization, both by including new transactions under the FDI regime, as is the case of certain investments by EU/EFTA2 residents and by broadening the concept of control. The RDL 34/2020 clearly sets out that the purpose of these changes is no other than to increase the protection of strategic sectors of the Spanish economy in view of the effects of the crisis caused by Covid-19.

1Law 19/2003, of July 4, on the legal regime of capital movements and foreign economic transactions.
2European Free Trade Association.