Spain's foreign investment screening regime has undergone a significant expansion. Rules that once applied narrowly to non-EU buyers now extend to a broader range of transactions – and the notification obligations are stricter than many international businesses expect.
Foreign investment screening in Spain requires mandatory prior notification to the Directorate-General for International Trade and Investment for transactions that meet defined value or sector thresholds. Affected investors must file before closing, not after. Failure to notify in time can render a transaction void under Spanish investment legislation.
This alert sets out what has changed, which business categories are caught, the applicable thresholds, and the immediate steps international companies should take now.
What changed and when it takes effect
Spain's foreign direct investment screening system was initially introduced as a temporary measure during the public health emergency. It has since been made permanent and progressively tightened. The most recent amendments extend the categories of transactions requiring prior authorisation and lower certain thresholds that previously excluded mid-market deals.
Under Spain's investment legislation, the obligation to notify applies to investments from outside the European Union and the European Economic Area. Following amendments that took effect at the start of 2025, EU-resident investors whose ultimate beneficial owner is located outside the EU are also subject to notification in defined circumstances. This closes a structuring route that a number of international buyers had relied upon.
The changes also introduce enhanced disclosure obligations during the review period. Investors must now provide more granular information about corporate structure, beneficial ownership, and the strategic rationale of the transaction. Spanish authorities – acting through the investment screening unit – retain the power to impose conditions, delay closing, or prohibit a transaction outright.
A key procedural shift concerns timing. The prior notification window is not suspended by parties' agreement. Closing a notifiable transaction without clearance – or before the review period expires – triggers the risk of administrative nullity. The Tribunal Supremo (Supreme Court of Spain) has confirmed that administrative infringements in this area are assessed strictly, without leniency for good-faith errors.
Which businesses are affected and what the thresholds are
The screening requirement is not limited to large listed companies. It applies across a range of legal forms, including a Sociedad Anónima (SA), the Spanish public limited company, and a Sociedad de Responsabilidad Limitada (SL), the private limited company equivalent. Any acquisition of a qualifying stake in a Spanish entity – whether directly or through a holding structure – can trigger the obligation.
The principal categories of affected transactions include:
- Acquisitions of ten per cent or more in companies operating in sensitive sectors
- Acquisitions below ten per cent that nonetheless confer influence over management or strategic decisions
- Any acquisition in critical infrastructure, regardless of the percentage acquired
- Greenfield investments that result in control over assets in designated strategic sectors
- Transactions structured through intermediary entities where the ultimate acquirer is non-EU
Sensitive and strategic sectors now include: defence and dual-use goods, energy, telecommunications, transport infrastructure, water, health, financial infrastructure, media, artificial intelligence, semiconductors, and cybersecurity. This list has been extended incrementally and should not be treated as exhaustive in a specific transaction context.
Investment funds – including private equity vehicles and sovereign wealth funds – are expressly within scope. The identity of the ultimate beneficial owner of the fund, not merely the fund's domicile, determines whether the non-EU threshold applies. A fund registered in Luxembourg or the Netherlands may still require Spanish prior approval if its investors or manager sit outside the EU. Practitioners should note that the Registro Mercantil (Commercial Register) filing made by the target company does not itself satisfy the investment screening notification requirement, which is a separate administrative procedure.
The transaction value threshold below which screening does not apply has been set at one million euros for sensitive sectors. For critical infrastructure and certain strategic assets, no monetary threshold applies – the obligation arises from the nature of the asset regardless of deal size.
To receive a tailored assessment of whether your transaction in Spain triggers a notification obligation, contact us at info@ferrazwhitmore.com.
Immediate actions for international companies
International buyers and their advisers should treat the following as a pre-signing checklist for any Spanish transaction in the current environment.
First, map the target's sector exposure. Determine whether the Spanish target operates in, or has assets connected to, any designated sensitive or strategic sector. This analysis should go beyond the company's primary business description. A logistics company, for example, may hold concessions over transport infrastructure that independently trigger screening.
Second, identify the ultimate beneficial owner. Tracing ownership through multiple holding layers is now a regulatory expectation, not merely a due diligence best practice. Spanish authorities will look through intermediate EU-domiciled vehicles. Investors should document this analysis before filing.
Third, assess the timeline against commercial commitments. The review period can extend to several months if the authorities request further information or refer the matter to an inter-ministerial committee. Signing a transaction with a fixed long-stop date that does not accommodate this review window creates closing risk.
Fourth, prepare the notification file before signing where possible. The notification package requires information about the acquirer's corporate structure, the ownership chain, the transaction rationale, and the intended role of the acquirer in the target. Preparing this file in parallel with due diligence avoids delays between signing and filing.
Fifth, consider whether a Notario (Spanish notary public) is involved and at what stage. The notarial deed recording the transfer of shares. a standard step in Spanish acquisitions. cannot be executed before screening clearance is obtained for notifiable transactions. Sequencing the notarial process correctly is essential to avoid procedural defects.
Companies already operating in Spain through a local subsidiary should also review whether a subsequent internal restructuring – such as a change in the ultimate parent – constitutes a notifiable event under the current rules. Internal reorganisations are not automatically exempt.
For wider context on Spain's regulatory environment for cross-border transactions, see our overview of capital markets and investment services in Spain. For the financing structures that frequently accompany inbound investment, our analysis of banking and finance in Spain addresses lender requirements and structuring considerations. Clients active in the Iberian Peninsula may also find it useful to compare Spain's approach with the equivalent regime covered in our investment screening alert for Portugal.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our capital markets practice covers foreign investment screening, securities offering procedures, listing requirements, and IPO-related compliance across European and international markets. As a law firm in Spain and Portugal, we combine Portuguese civil law expertise with English common law tradition. Our attorneys have advised on inbound investment transactions requiring engagement with screening authorities in multiple EU jurisdictions. We work with international investors, institutional funds, and in-house legal teams who need results-oriented counsel across multiple legal systems. To discuss your Spanish transaction and the screening requirements that may apply, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.