The “ Report on Investments in the World 2019 ” prepared by the United Nations Agency on Trade and Development (UNCTAD) shows that global direct foreign investments have suffered a decrease of 13% last year, said decrease being especially significant in the case of Europe, where the percentage of foreign investment was reduced by 55%.
At this juncture with a clear downward profile, Spain has been one of the exceptions to the global trend as its foreign direct investment increased by 108.4% compared to the previous year, reaching a total of 43.6 billion US dollars.
The increase in foreign investment in Spain, year after year, is due to its enviable geopolitical position, serving both as a bridge with Latin America, who is joined by historical, cultural and economic ties, as well as with Europe and Asia, since, at Being part of the European Union, gives access to its single market and offers the legal certainty of being framed in the legal-regulatory regime of the European Union.
Spain has all the elements to be considered as the best platform from the legal point of view to become the bridge or access channel for foreign investments, either to invest in Spain, or through it, to invest in Latin America or vice versa, that is, invest from Latin America in Europe or Asia. In addition, the Spanish legal system is prone to grant tax advantages to the establishment of holding companies whose purpose is to channel investment in third countries (the so-called Foreign Securities Holding Entities (ETVE)).
The unequivocal manifestation of the foregoing is the numerous APPRI (Reciprocal Investment Promotion and Protection Agreement) agreements that Spain has signed with 72 countries (including practically all of the Latin American countries) and the CDI (Agreements to Avoid Double Taxation) that Spain has currently subscribed with 103 countries.
The channeling of foreign investment is carried out through the establishment of subsidiaries, which vary legally according to the needs of the foreign company in question and the destination of the investment, but mostly adopt the legal form of Limited Partnership. On September 27, 2019 the National Institute of Statistics published that the number of foreign subsidiaries in Spain in the sectors of industry, consumption and services has been increasing in recent years until reaching the figure of 12,953 subsidiaries in 2017, with a total turnover of 554,055 million euros.
Net Craman Abogados is specialized in advising foreign companies to invest in Spain (either to channel their investment in a third country through a Spanish company or to invest directly in Spain), covering all commercial and fiscal aspects of the same, so that the investment is materialized through the most convenient legal form for the foreign company (ETVE, Public Limited Company, Limited Company, Joint Venture, etc.) and advising in turn in the negotiation phases of the Agreements of Investment and Partnership Pact during investments that by their nature or type so require.
Javier de Vicente
Corporate Department
Net Craman