SPAIN Law and Practice Contributed by: Miguel Cases, Toni Barios, Joaquín Fabré and David Navarro, Cases & Lacambra
activity of lending money alone does not require the relevant entity granting the loan to obtain a licence or authorisation from the Bank of Spain, but other activities reserved in Spain for credit institutions duly authorised and registered (such as accepting depos- its) may be subject to the obtainment of such licence or authorisation. 3.2 Restrictions on Foreign Lenders Receiving Security Generally, there is no restriction on foreign lenders receiving security or guarantees according to Span- ish law. In accordance with Article 7 of Spanish Law 19/2003, dated 4 July, on legal regime of movements of capi- tal and economic transactions abroad and on certain measures for prevention of money laundering, the Spanish government may suspend the liberalisation regime on acts and transactions between residents and non-residents implying transfers of money in cas- es of acts or transactions that, by their nature, form or conditions, affect or may affect activities related to the exercise of public power or national defence, or activities that affect or may affect public order, public safety and public health. Notwithstanding the foregoing, there is a suspension of the liberalisation regime for direct foreign invest- ments in Spain, which are made in certain sectors which affect public order, public safety and public health. This suspension was included as Article 7 bis to Spanish Law 19/2003. Such sectors include criti- cal infrastructures, critical and dual-use technologies, supply of fundamental inputs, sectors with access to sensitive information and media. Therefore, authorisa- tion by the Spanish government is required for such investments. The liberalisation regime is also suspended in the fol- lowing circumstances: • if the foreign investor is directly or indirectly con- trolled by the government of a third country; • if the foreign investor has invested or participated in activities in sectors affecting security, public order and public health in another member state; or
• if there is a serious risk that the foreign investor carries out criminal or illegal activities affecting public safety, public order or public health in Spain. A “direct foreign investment” should be understood as any foreign investment in Spain as a result of which a relevant investor/s acquires a stake of 10% or more of the share capital of a Spanish company, and all those other investments in which the investor/s acquires control of the Spanish company, provided that one of the following circumstances is met: • that the investment is carried out by residents of countries outside the European Union and the European Free Trade Association; or • that the investment is carried out by residents of European Union or European Free Trade Associa- tion countries whose beneficial ownership cor- responds to residents of countries outside the European Union and the European Free Trade Association. Moreover, following the COVID-19 health crisis, the Spanish government extended the suspension of the liberalisation regime previously described (regu- lated in Article 7 bis of Spanish Law 19/2003) to such direct foreign investments made in listed companies in Spain, or in unlisted companies, if the value of the investment exceeds EUR500 million, made by non- residents in the European Union and the European Free Trade Association. This suspension has been extended several times, and it is currently in place until 31 December 2026. The foregoing provisions should not affect loan trans- actions, but should be considered if a lender acquires a stake in the share capital of a Spanish company as a result of enforcing a security interest over the shares of the Spanish company. 3.3 Restrictions and Controls on Foreign Currency Exchange Generally, there are no legal restrictions, controls or concerns under Spanish law regarding foreign cur- rency exchange with respect to foreign entities. It should be noted that Spanish entities are subject to certain controls from the Bank of Spain, such as the
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