Country Desks — Western Europe
Spain
Legal System
Civil law based on the Código Civil and Código de Comercio; strong Roman law foundation. EU member, fully aligned with EU law. Autonomous communities have limited legislative competences.
Principal Arbitration Centre
Corte Española de Arbitraje (Spanish Court of Arbitration) and CIMA (Corte Civil y Mercantil de Arbitraje). Governed by Ley 60/2003 de Arbitraje (based on the UNCITRAL Model Law). Madrid is a growing seat for international arbitration in Ibero-American disputes.
Corporate Tax
Impuesto sobre Sociedades (IS) standard rate 25%. Start-ups: 15% for the first two profitable years. VAT (IVA) standard 21%. Patent Box regime and R&D tax credits available.
Partner Office
Served together with our Spanish partner office across M&A, corporate structuring, renewable energy projects and dispute resolution.
Country Desk Brief
Legal System, Investment, Trade & Regulation
A civil-law jurisdiction rooted in the Roman law tradition, governed primarily by the Código Civil and Código de Comercio. Spain is the fifth largest economy in the EU and the fifteenth globally, with one of Europe's most dynamic inbound FDI environments. Commercial and corporate disputes are handled by specialised mercantile courts (Juzgados de lo Mercantil) in each provincial capital. Mermeroglu Legal advises on market entry, investment structuring, foreign trade and dispute resolution in Spain, working in coordination with our Spanish partner office across M&A, corporate structuring, renewable energy projects and dispute resolution proceedings.
The standard entry vehicle for foreign investors is the S.L. (Sociedad de Responsabilidad Limitada; minimum capital €3,000 since 2023 reforms), which offers limited liability and flexible governance. The S.A. (Sociedad Anónima; minimum capital €60,000) is used for listed or larger corporate structures. No residency requirement applies to directors or shareholders; remote account opening and documentation preparation are commonly used by foreign investors.
Spain broadly welcomes FDI with no general ownership restrictions. However, Law 19/2003 and Royal Decree 571/2023 impose FDI screening controls for non-EU/EEA investors in strategic sectors and — since 2020 — for EU investors in certain critical sectors. The government must be notified and may authorise, impose conditions on, or prohibit qualifying transactions. Spain's strong regulatory framework, EU membership, geographic position as a gateway to Latin America, and rapidly expanding renewable energy sector make it a high-priority investment destination.
At a Glance — 2024
Investment & Trade Indicators
Establishment
How to Form a Company
The S.L. is the preferred vehicle for foreign investors — minimum capital reduced to €3,000 by the Ley Crea y Crece reforms (Law 18/2022); no residency requirement for directors or shareholders. The S.A. (minimum capital €60,000) is used for larger or listed structures. Branches (sucursales) and liaison offices are also common foreign-entry routes.
Foreign ownership: equal treatment for foreign and domestic investors in general. FDI screening applies to non-EU/EEA investors in strategic sectors under Law 19/2003; since Royal Decree 571/2023, EU investors may also be subject to review in sectors relating to critical infrastructure, dual-use technology, media, data, semiconductors, AI and defense. Transactions above €500M require prior authorisation for non-EU investors in certain sensitive sectors.
Start-up incentives: Ley de Startups (Law 28/2022) offers a reduced 15% corporate tax rate for the first two profitable fiscal years, stock option exemptions, fast-track visa options for entrepreneurs and digital nomads, and simplified administrative procedures for qualifying start-ups.
Typical steps — S.L.
Investment Climate
Investment Models & Where Capital is Flowing
Spain received approximately €35 billion in FDI inflows in 2023 — among the highest in its history — driven by renewable energy, technology and real estate. The economy grew at approximately 3.2% in 2024, the fastest pace among major EU economies. Spain's geographic position as a gateway to Latin America, the use of Spanish as a global commercial language, and its position as Europe's leading renewable energy market are persistent structural investment advantages.
- Renewable energy — Spain has the highest installed renewable energy capacity in continental Europe; solar PV and onshore wind are globally competitive sectors. Green hydrogen is an emerging strategic priority under the National Hydrogen Roadmap.
- Technology & digital — Barcelona and Madrid are among Europe's top five tech hubs; the Ley de Startups (2022) has strengthened Spain's position as a start-up destination.
- Tourism & hospitality — Spain is the world's second most visited country; tourism generates approximately 12–14% of GDP and drives sustained real estate and hospitality investment.
- Automotive & mobility — Spain is the second largest automotive manufacturer in the EU; EV transition investment is substantial, including the SEAT Volkswagen gigafactory in Sagunto.
- Agri-food — Spain is the EU's largest agri-food exporter; olive oil, wine, fruits, vegetables and processed foods are globally traded export sectors with strong brand protection requirements.
- Latin America gateway — Spanish language, legal tradition and established commercial ties make Spain the preferred European base for companies with Latin American operations or ambitions.
Foreign Trade — 2024
Recent Trade & Principal Partners
Spain recorded approximately €385 billion in goods exports, with a structural surplus in services (primarily tourism, financial services and professional services). The overall current account balance has been positive since 2012. The European Union absorbs approximately 65% of Spanish goods exports, with France and Germany the two largest markets. The USA is the principal non-EU export destination. Agri-food, automotive and chemicals are the largest goods export sectors; energy imports — mainly LNG, oil and gas — represent the principal import category.
Top Export Partners
- France (~16%, largest)
- Germany (~10%)
- Italy (~9%)
- United States
- Portugal
Top Import Partners
- Germany
- China
- France
- United States
- Italy
Principal Export Sectors
- Agri-food & beverages
- Automotive & components
- Chemicals & pharmaceuticals
- Machinery & equipment
- Tourism services (structural surplus)
Regulatory Developments
Notable Legislative Changes
In force 19 October 2023
Investment Screening — Royal Decree 571/2023
Updated Spain's FDI screening framework, implementing EU Regulation 2019/452. Extended the screening obligation to EU investors for critical sectors including dual-use technology, media, data infrastructure, semiconductors, AI and defense. Sets out the procedure for prior authorisation, conditions and prohibited transactions. Replaces earlier emergency measures in force since 2020.
In force 1 January 2023
Start-ups — Ley de Startups (Law 28/2022)
Comprehensive framework for emerging companies: 15% corporate tax rate for the first two profitable fiscal years; improved stock option and carried interest tax treatment; entrepreneur and digital nomad visa; simplified administrative procedures for qualifying start-ups; and a sandboxing regime for regulatory testing of new technologies.
In force 30 September 2022
Corporate Simplification — Ley Crea y Crece (Law 18/2022)
Reduced the minimum share capital for S.L. companies from €3,006 to €3,000; introduced mandatory electronic invoicing (factura electrónica) obligations for B2B transactions; and simplified administrative procedures for company formation and growth. Part of a broader reform package to reduce barriers to business creation.
Published 2023 — reform ongoing
Arbitration — Reform of Ley de Arbitraje (Law 60/2003)
The Spanish Ministry of Justice has been consulting on a reform of the Ley de Arbitraje to modernise procedural rules, clarify emergency arbitrator powers and bring the framework into full alignment with current international arbitration practice. No final reform bill has been enacted as of mid-2025; the 2003 Act (UNCITRAL Model Law based) remains in force.
Note: the energy sector in Spain is governed primarily by the Ley del Sector Eléctrico (Law 24/2013) and ongoing PNIEC (National Energy and Climate Plan) implementation; regulatory changes occur through royal decrees and ministerial orders rather than single landmark statutory events. Project-specific verification against current official sources is recommended.
Resources
Useful Official Links
Our Approach
How Mermeroglu Legal Engages in Spain
Spain mandates typically combine S.L. or S.A. structuring with FDI screening advice for strategic-sector transactions, and frequently engage the law of the investor's holding jurisdiction for tax and financing purposes. Cross-border M&A in Spanish renewable energy, agri-food and technology sectors often involves concurrent FDI notification under Royal Decree 571/2023, EU merger control, local employment law and project financing coordination. Our practice is structured to manage that complexity through a single point of accountability, working in close coordination with our Spanish partner office.
Each mandate is led by a single matter principal at the firm, supported by an internal team and local counsel — covering company formation, FDI screening, renewable energy project structuring, foreign trade, M&A and dispute resolution before CIMA and Spanish courts.
INITIAL ENQUIRIES
Market entry and cross-border matters in Spain are handled through coordinated internal and alliance teams.
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