Formalities when receiving foreign capital

In Spain, foreign capital investments in Spanish companies may need to be declared through the Foreign Investment Registry of the Ministry responsible for economy and trade.

This process normally involves submitting declaration forms depending on the nature of the investment, the investor's residence and the type of transaction.

Because foreign investment reporting rules and forms can change, the exact model should always be confirmed against the current Registry procedure at the time of the transaction.

Declaration models

Traditionally, foreign investment declarations have used different models depending on the transaction. Common references include the following.

1. Model D-1A

Model D-1A has been used to declare direct foreign investments in Spanish companies by investors residing outside the European Economic Area.

This can include the acquisition of shares or stakes in Spanish companies, capital increases and the establishment of new companies with foreign participation.

The declaration is generally submitted after the investment is made.

2. Model D-1B

Model D-1B relates to Spanish investments abroad.

It is mentioned here for context because it forms part of the wider international investment declaration system.

3. Model D-2

Model D-2 has been used for periodic declarations relating to certain foreign investments in the form of loans, credits, current accounts and other financial means.

It may apply to companies with significant foreign participation, depending on the transaction and current thresholds.

Declaration process

The initial declaration is normally submitted after the transaction involving foreign direct investment has been carried out.

The declaration is made electronically through the relevant electronic office of the competent ministry or registry platform.

Annual declarations

In addition to the initial declaration, companies with foreign investment may need to submit annual declarations if the investment exceeds certain thresholds.

This allows the administration to monitor the impact and nature of foreign investments in Spain.

Important aspects

• Declaration obligation: direct foreign investments in Spanish companies may need to be declared, depending on the investor, amount and transaction type.
• Exceptions: some investments, including those from EEA residents or below certain limits, may be exempt from certain declarations.
• Current rules matter: the precise forms, exemptions and thresholds should be reviewed before filing.
• Consequences of non-compliance: failure to submit required declarations can lead to financial penalties and other legal consequences.

In summary

To declare a foreign capital investment in a Spanish company, Model D-1A has traditionally been the main reference for direct foreign investment declarations.

However, the correct filing depends on the transaction and the current Registry rules.

For companies receiving capital from foreign shareholders or investors, these formalities should be reviewed together with company formation, tax registration, accounting and bank documentation.