Press release

Pérez-Llorca analyses the sectors, investors and types of transactions affected by the new restrictions on foreign investment


The aim of these webinars was to analyse the practical issues that have arisen in relation to the sectors and types of transactions affected by the restrictions on foreign investment.

Pérez-Llorca organised two webinar sessions with the aim of analysing the main concerns and practical issues that arise in relation to the sectors and types of transactions affected by the restrictions on foreign investment set out in Royal Decree-Law 11/2020 of 31 March, with particular reference to the energy sector and to those with access to sensitive information.

If you were unable to attend or wish to view these webinars again, you can do so by clicking on the videos below:

Please note that the videos are in Spanish; for further details contact

Javier Carvajal, a partner in the Corporate practice at Pérez-Llorca, began his presentation by outlining the international context of foreign investment regulations. Carvajal pointed out that this is not a result of COVID-19, as there are several countries that have previously implemented control regulations in this sector. In this context, Carvajal noted that, in Spain, Law 19/2003 is in force, which establishes the freedom of movement of capital and economic transactions abroad. He went on to describe the main regulations on foreign investment adopted by some countries following the spread of COVID-19, including the guidelines issued by the European Union inviting member states to protect their investments in relevant sectors such as food and healthcare, and the strengthening of investment control being implemented by Germany and Italy through legislative reform.

Next, Carvajal elaborated on the definition of Foreign Direct Investment (FDI) set out in Article 7 bis. For the purposes of this article, FDIs are considered to be direct investments that involve the investor holding a stake equal to or greater than 10% of the share capital or when the investor becomes actively involved in the management of the company. Likewise, in accordance with this article, foreign investors are residents in countries outside of the European Union or the European Free Trade Association, or investors whose real ownership corresponds to residents of countries outside these communities. It is understood that this real ownership exists when these residents possess a percentage of more than 25% of the capital or voting rights of the investor.

Which sectors are affected by restrictions on foreign investment?

Rafael Díaz, a partner in the Corporate practice at Pérez-Llorca, analysed the sectors that have been affected by the suspension of the foreign direct investment liberalisation regime in Spain, within the objective scope of the regulations. Díaz began by explaining that, according to Article 7 bis of Royal Decree-Law 11/2020 of 31 March, critical infrastructure, critical and dual-use technologies, the provision of essential supplies, companies with access to sensitive information and the media are sectors that require prior authorisation to make foreign direct investments, since they can affect security, public order and public health.

Furthermore, Ana Cremades, Counsel of Public Law and Energy at Pérez-Llorca, discussed the impact that Article 7 bis has on foreign direct investments in the energy sector and pointed out that these regulations apply to critical infrastructure in the energy sector and to the essential provision of energy supplies. Cremades specified that all the sectors defined in the Electricity Sector Law and in the Hydrocarbons Sector Law are those considered to be involved in the supply of energy and are therefore subject to these regulations. She also referred specifically to the impact of these regulations on transactions involving renewable assets.

To conclude the analysis on the scope of application of Article 7 bis, Andy Ramos, Counsel in the Intellectual Property and Technology practice, examined the suspension of the foreign investment liberalisation scheme in sectors with access and control over sensitive information and where personal data is held. Ramos explained that the term “sensitive information” may include any information to which a sector has access which is considered privileged, relevant, classified, or personal data documentation, or information that may constitute a trade secret, provided that such information may affect public order, public security, and public health in Spain. Lastly, he stressed that both the person responsible for processing sensitive information and the person in charge are also affected by the regulations.

How do these regulations affect the investor themselves?

Javier Gómez, a partner in the Corporate practice at Pérez-Llorca, conducted an analysis of the subjective scope of Article 7 bis in which he explained how these regulations affect the investor. Gómez identified three cases in which the investment liberalisation scheme would be suspended: when the investor is directly or indirectly controlled by the government of a third country; when the foreign investor has made investments or has a stake in sectors that affect security, public order or public health in another member state; and when proceedings have been initiated against the foreign investor in another member state or in the home country for committing criminal offences or illegal activities.

Lastly, and to conclude the meeting, Rafael Díaz explained the procedures and exclusions from the rule. Regarding the procedures, Díaz noted that there are currently two different types, a standard one and a simplified one. In the standard procedure, the competent body for the resolution is the Council of Ministers, which has a maximum period of 6 months to carry it out. The simplified procedure is aimed at transactions in which a binding offer is confirmed or in which the price had been set prior to the state of alarm, as well as transactions that have a value of between one million and five million euros. Regarding exclusions, Díaz indicated that it was not desirable to penalise transactions valued below one million euros and, therefore, they were exempt from requesting prior authorisation.