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New Royal Decree on Foreign Investments in Spain

| Publications | Corporate Law and M&A

The Government has approved the new Royal Decree on Foreign Investments in Spain, which will enter into force on September 1, 2023

The Government has approved the new Royal Decree on Foreign Investments in Spain, which will enter into force on September 1, 2023, although the Third Transitory Provision of Royal Decree 571/2023 establishes the transitional regime for the application of certain provisions until the approval of the implementing regulations.

The new Decree reinforces the control over foreign investments extending the scope of transactions considered as foreign investment and details which ones must be authorized by the Government. It has also shortened the resolution deadlines, from the current six to three months, and established a binding prior consultation system with a response period of 30 working days.

The main novelties of the adaptation to the European regulation refer to the energy and defense sectors, where the exemptions to the prior authorization regime are focused in order to avoid unwanted purchases from European companies that could put security, health or public order at risk. Those from outside the EU will always require prior authorization if they exceed 10% of the capital. Energy assets may be acquired without authorization if they do not reach 5% of the installed power.

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