Spanish Foreign Direct Investment Screening Mechanism – 28 December 2022 update

28 December 2022

The Spanish Government has amended the screening mechanism for specific foreign direct investments (“FDIs”) (“Screening Mechanism”) as follows:

  • extending the application of the Screening Mechanism to FDIs made by European Union (“EU”) or European Free Trade Association (“EFTA”) non-Spanish investors through 31 December 2024 –  the regime already applied indefinitely with respect to non-EU/EFTA investors; and
  • clarifying that the Screening Mechanism does not only apply to share deals, but also to asset deals (i.e. where the transaction target is not shares but “all or part of a Spanish company” –“part” of a Spanish company intending to refer to assets or a business). As the Screening Mechanism was already being applied to asset deals, the amendment should not  involve  a significant change in practice.