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How to declare foreign investments in Spain

[vc_row][vc_column][vc_column_text]So you may have heard of the free movement of capital in the EU but what exactly does this mean with regards to foreign investments made to Spain and Spanish companies? Lecuidy tells you more.

The EU allows unrestricted capital movements and payments – not only within the EU but also between EU countries and countries outside the EU.

This applies to foreign investments made to Spain, since Spain is an EU member country. And a general regime has been established in which foreign investment is made freely with the only obligation of declaration.

The legal framework in Spain regarding foreign investments is set forth in the following laws:

  • Law 18/1992, of July 1 which establishes certain rules on foreign investments
  • Royal Decree 664/1999, of April 23 concerning foreign investments
  • Order of 28, May 2001 of the Ministry of Economy, regarding the procedure for the declaration of foreign investments and divestments, annual reports and authorizations
  • Law 19/2003 on the legal regime of capital movements and economic transactions with other countries, as amended by Law 10/2010 of April 28 concerning prevention of money laundering and terrorism funding.
  • Royal Decree 54/2005 establishing certain measures regarding the prevention of money laundering

Who has to declare foreign investments?

  • Non-residents in Spain, including Spanish citizens that have their primary residence abroad.
  • Foreign companies and public entities of foreign nationality.

To whom are foreign investments reported to?

Foreign investments must be reported to the Registry of Foreign Investments held by the Department of Economy, Industry and Competition.

How is the declaration made?

This declaration process is done through two different forms:

  • Model D1-A, which is used to declare foreign investments in Spanish companies that are not listed on the stock exchange, branches and other forms of investment.
  • Model D1-B is used to declare the liquidation the foreign investment in non-listed companies, branches and other forms of investment.

The form can be filled with the AFORIX software, which has been created to provide assistance in the completion of the various forms used for declaring investments.

The form must be submitted through the online platform of the Secretary of Commerce, within a month after completing the investment.

Where the investment comes from MATTERS.

Notice that if the investment derives from countries deemed as tax haven according to Spanish legislation (Royal Decree 1080/1991 of July 5th) then there are some other obligations.

In these cases, there must be an additional and previous declaration to the General Directorate of Commerce and Investment (which can be presented using Form DP-1: Previous declaration of foreign investment from tax havens in non-listed companies, branches and other forms of investment).

Can Lexidy help me understand and complete my obligations related to Foreign Investments in Spain

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