Do you have any doubts about how to declare your investments abroad? Do you know which forms to use and the deadlines you must meet to avoid penalties? If you are an entrepreneur or have shares in companies outside Spain, you should be aware of the latest changes in the regulations on foreign investments.
The process of declaring foreign investments from Spain has changed in recent months and affects the content of the documents that must be submitted and the deadlines for filing them. Do you know about these changes? In this article we explain all the new developments and the steps you must follow to comply with the current regulations.
Regulatory changes in foreign investment declarations
In relation to foreign investments and foreign investments in Spain, there have been several new developments in recent years. In July 2023, the regulation implementing Law 19/2023 on the legal regime of capital movements and economic transactions abroad, as well as on certain measures for the prevention of money laundering, was approved.
On the other hand, on 1 February 2024, the Order establishing the procedures for the declaration of investments to be submitted to the Investment Register came into force. This Order regulates the following procedures:
- Preliminary investment declaration (for investments from ‘non-cooperative jurisdictions’).
- Declaration of investment.
- Declaration of divestment.
The new features of these declarations, regulated in the Order, are as follows:
- The filing of the declarations must be made electronically, even if the investor is a natural person.
- Annual reports on foreign investments must include data on the reinvestment of profits by investors with a stake of more than 10% in the share capital. Financing operations to companies or branches carried out by group companies through a debt instrument for an amount of more than one million euros and with repayment periods of more than one year must be reported. The deadline for submission of annual reports, in cases of investments where the company closes its financial year on 31 December, is 31 July.
If the investor changes its registered office or residence, and this change involves a change from resident to non-resident, it must be notified within one month.
Investment declaration forms
In addition to the above, by resolution of the Directorate General for International Trade and Investments, the models for declarations of foreign investments and foreign investments in Spain were approved. These forms are as follows:
For foreign investments in Spain:
- Prior declaration of foreign investment from non-cooperative jurisdictions: Form DP1.
- Preliminary declaration of foreign investment from non-cooperative jurisdictions in real estate: form DP2.
- Declaration of foreign investment in companies, branches, collective investment undertakings and other forms of investment: Form D1A.
- Declaration of foreign divestment in companies, branches, collective investment undertakings and other forms of investment: Form D1B.
- Declaration of foreign investment in real estate: form D2A.
- Declaration of foreign disinvestment in real estate: form D2B.
- Annual report on foreign investment in Spain: form D4.
The models for Spanish investments abroad are as follows:
- Prior declaration of Spanish investment in non-cooperative jurisdictions in companies, branches, collective investment undertakings and other forms of investment: form DP3.
- Prior declaration of Spanish investment in non-cooperative jurisdictions in real estate: form DP4.
- Declaration of Spanish investment in foreign companies, branches, collective investment undertakings and other forms of investment: form D5A.
- Declaration of Spanish disinvestment in foreign companies, branches, collective investment undertakings and other forms of investment: form D5B.
- Declaration of Spanish investment in real estate: form D7A.
- Declaration of Spanish disinvestment in real estate: form D7B.
- Annual report on Spanish investment abroad: form D8.
Recommendations for external investment declarations
The level of control and detail in investment declarations is increasing. Therefore, a number of measures need to be taken to ensure that the procedures are carried out correctly and to avoid penalties.
Here are some tips that can be followed:
- Review each year the investments you make abroad and the changes that occur. This will allow you to keep an up-to-date record and make it easier to file a tax return.
- Comply with the deadlines for filing returns to avoid penalties.
- Analyse and verify all the information to ensure that there are no missing data or errors.
- Seek the help of an expert foreign investment advisor to analyse your case, determine which declarations you need to file and carry out the procedures properly and on time.
In short, it is essential to be aware of the latest developments in the processing of a foreign investment declaration in order to complete the formalities on time and correctly. At Leialta we have a team of experts who can help you with all the formalities, ensuring that you comply with the legal requirements without complications.
