After falling as a result of the financial crisis, Spanish FDIs recovered in recent years due to an increase in competitiveness and investor confidence in the country. However, according to the 2020 World Investment Report published by UNCTAD, FDI inflows dropped to USD 12.4 billion in 2019, a decrease of 72% compared to the previous year (USD 45 billion in 2018). Nonetheless, FDI stocks increased in 2019 to reach USD 751.5 billion. The latest figures from UNCTAD show that in 2020 FDI inflows rose by 52% compared to the year before, mostly thanks to several acquisitions (including the U.S. private equity companies Cinven, KKR and Providence acquiring 86% of the telecommunication company Masmovil), despite the COVID-19 pandemic outbreak (which prompted a 69% decrease in investment inflows towards developed countries). According to a survey from "Multinacionales por la Marca España" (an association of multinational companies active in Spain), three-quarters of FDIs registered in the first half of 2020 were directed towards the region of Madrid. Investments in Spain are mainly oriented towards financial and insurance services, real estate, manufacturing, scientific, professional, technical, administrative support service activities, wholesale and retail trade, transportation and storage, and the energy sector. The Netherlands, Luxembourg, the United Kingdom, France, Germany and Italy represent nearly 70% of the FDI stock of Spain.
In November 2020, the Spanish government approved a decree-law which requires prior authorization for direct investments of more than 10% of the capital of a Spanish company made by residents of other countries of the EU or EFTA (including the UK). Such measure will be in place until June 30, 2021. The country’s strengths in terms of FDI attractiveness include a restructured financial sector, the boom in tourism, its highly efficient transport network, its development of renewable energies and the cultural proximity to Latin America, with the presence of a number of Spanish multinational companies. Spain also aspires to become one of the world's key research actors. On the other hand, the country has high levels of private and public debt, a very negative net external position and a high level of structural unemployment. Spain ranked 30th out of 190 countries in the 2020 Doing Business report published by the World Bank, stable compared to the previous year.
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Latest Update: June 2021