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The regulation of foreign investment in Spain reflects the following basic considerations:
 | The general rule is the deregulation of foreign investment in Spain, with the same conditions as investments made by residents in Spain, without prejudice to the need for prior declaration of certain transactions and the obligation for non-resident subjects to declare a posteriori.
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| There is no restriction to the percentage of foreign participation in the share capital of Spanish Companies.
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| The foreign investment to which we have referred must be declared to the Investment Registry of the Ministry of Economic Affairs and Finance for administrative, statistical or economic purposes.
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| Government attitude is favourable towards foreign investment.
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| There is favourable tax treatment for entities holding foreign securities. (ETVE).
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There is a general regime of freedom as regards foreign investment in Spain, favoured by the Council’s Community Directive 88/361/CEE, of 24 June and the Treaty on European Union. Law 18/1992, of 1 July (Ley 18/1992, de 1 de julio), regulates foreign investment in Spain, with the aforementioned community guideline taking in the internal legislation, which deregulates capital movements between people who are resident in the member states. The main modifications are included in Royal Decree 664/1999, of 23 April (RD 664/1999, de 23 de abril).
By virtue of the existing regulations, foreign investments are considered to be those made by private individuals or legal entities that are not resident in the Spanish territory.
In order to determine whether the investment should be considered foreign, the only criterion contemplated is the residence of the investor (the residence of the foreign shares when the investor is an entity resident in Spain is not recognised).
In accordance with section 12 of Royal Decree 664/1999, of 23 April (artículo 12 del RD 664/1999, de 23 de abril), changes of registered office of legal entities or changes of residence of individuals will determine whether an investment is classified as Spanish abroad or foreign in Spain. |
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