The Spanish government has approved a new law on foreign investment that removes administrative red tape and other possible bureaucratic obstacles, while also reducing response and resolution times for investment applications.

READ ALSO: Why there are half a million new homes in Spain that no one wants to buy

The new rules also outline exemptions, establishing the types of foreign companies and investments that do or do not need to request an investment authorisation from the government, which improves the predictability of the regulation and speeds up resolution times. 

The resolution period is reduced from the current six months to three months, and it also provides for the possibility of voluntary consultation, something the government must respond to within 30 working days.

READ ALSO: How Spain plans to toughen conditions for its golden visa

Speeding up and streamlining the investment process was one of the main requests of foreign companies and investors with interest in investing in Spain. According to a spokesman from the Ministry of Industry, Trade and Tourism, the result is “clear, predictable and more legally secure” investment regulation.

“The attraction of foreign investment to Spain has been a fundamental element in promoting the modernisation of the economy and the creation of productive, stable and quality employment,” said the Minister of Industry and Tourism, Héctor Gómez.

Another of the changes made is a bid to modernising the statistics base of Spain’s Foreign Investment Register by adapting regulations to the world standard as outlined by the OECD’s ‘Framework Definition of Foreign Direct Investment’.

The royal decree also allows Spanish regulations to be brought into line with EU regulations in the area of investment control, namely the EU Investment Control Regulation which came into force in October 2020. This establishes a regulatory framework for the control mechanisms of foreign investments from outside the EU in member states for reasons of security and public order.

It also develops the investment control regime that was introduced through Article 7 of the previous Law 19/2003, which was amended in March 2020. For the regulation and control of foreign investments coming into Spain, the new law further bolsters the national regulatory framework for investment, which suspends the liberalisation regime for certain foreign direct investments in Spain that were subject to prior authorisation.

The hope is that this cutting of red tape and streamlining of administrative procedures will attract more foreign investment into Spain.