On 1 September, the new Royal Decree 571/2023 of 4 July on foreign investment will come into force. This antiopas regulation fixes some of the temporary measures that were approved during the pandemic to prevent the purchase of national strategic assets by foreign capital.
The main novelty is that administrative procedures are reduced and streamlined. Thus, the resolution period for authorising or vetoing investments is halved from six to three months. This period also includes consultations with the administration, which will have 30 working days to respond.
The antiopas shield
Let’s look back at how we got here. To do so, we must go back to March 2020, when the Executive implemented the so-called “antiopas shield”. In this way, article 7 bis of Law 19/2003 established the obligation of prior permission from the government for non-EU investors intending to invest more than 500 million euros or to acquire more than 10% of a strategic company listed on the stock exchange. The reasons given were security, public order and public health. The aim was to prevent foreign capital from taking advantage of the stock market crashes that occurred during the COVID-19 pandemic to take over strategic Spanish companies.
In November of the same year, this measure was complemented by a transitional provision which established that the government should also authorise foreign direct investment by EU and EFTA companies in listed companies or even in unlisted companies if the investment exceeded 500 million euros. The aim was to prevent investors from circumventing the restrictions by simply setting up companies on EU territory.
Inflation and rising interest rates have meant that this regulation has been successively extended to the present day.
What’s new in the Antiopas Law 2023
Now the Executive has modified and developed the regime for foreign investment in Spain and, in particular, the investment control regime. These are some of the main novelties:
- The deadline for approving or vetoing investments is reduced from six to three months. This reduces and speeds up administrative procedures, one of the main complaints of companies and investors.
- It formalises the system of voluntary consultation which had already existed in practice. Through this voluntary procedure, investors can receive a confidential and binding response as to whether or not a given transaction should be subject to authorisation. The authorities will have 30 working days to respond. Otherwise, the interested party may submit an application for authorisation.
- The possibility of using the simplified procedure of 30 working days for transactions of less than EUR 5 million is eliminated.
- Internal restructuring within a group of companies and increases in shareholdings by investors already holding at least 10% in the Spanish company are not subject to the control mechanism if such increases are not accompanied by changes in control.
- In the case of investment through private equity funds, the person obliged to submit to control as the owner of the investment will be the management company, provided that the shareholders or beneficiaries do not legally exercise political rights or have privileged access to the company’s information.
- All investments of less than €1 million are no longer exempt. The threshold now varies depending on the sector of the company in which the investment is made. The energy sector, electronic communications, mining, strategic raw materials, etc. are particularly regulated.
Conclusions
Overall, we believe that this new regulation takes up in writing some interpretative criteria that were already being applied by the authorities and offers greater legal certainty in the market.