The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

To access the ICS, visit the U.S. Department of State Investment Climate Statements website.

Executive Summary

Now one of the fastest-growing economies in the EU, Spain is open to and actively courting foreign investment as it continues to implement its post-COVID-19 recovery plan to further modernize its economy and pursue a green and digital transformation. By building on healthy fundamentals and fueled by up to nearly 150 billion euros in Next Generation EU recovery funds, Spain led GDP growth in 2023 among the European Union major economies. The IMF projects that Spanish growth will remain at 1.9 percent in 2024 and increase to 2.1 percent in 2025, compared to 0.8 and 1.5 percent in the Euro area, respectively. The unemployment rate remains high but improved to 11.8 percent for 2023. Service-based industries, particularly those related to tourism, and energy-intensive industries remain most vulnerable to economic shock. Spain’s key economic risks are high public debt levels, ballooning pension costs for its aging population, housing affordability, and stagnant productivity, though these areas are targets for government reforms.

Spain’s excellent infrastructure, well-educated workforce, large domestic market, access to the European Single Market, and leadership on renewable energy make it an appealing foreign investment destination. In 2023, one out of three new jobs created in the EU were created in Spain. With very narrow exceptions, Spanish law permits up to 100 percent foreign ownership in companies, and capital movements are completely liberalized. According to Spanish data, in 2023 foreign direct investment flows into Spain were $30.4 billion, of which $8.78 billion came from the United States, the largest investor in Spain as measured in terms of either foreign direct investment stock or flows. Foreign investment is concentrated in the energy, real estate, financial services, engineering, and construction sectors.

Spain plans to use its Next Generation EU recovery funds to transform the Spanish economy, especially through digitalization and greening of the economy, to achieve long-term increases in productivity and growth. Spain’s credit ratings remain stable, and issuances of public debt – especially for green bonds – have been oversubscribed, reflecting strong appetite for investment in Spain. However, small- and medium-sized enterprises (SMEs), which account for more than 99 percent of Spanish businesses, still have some difficulty accessing credit and rely heavily on bank financing. Small firms also experience more challenges accessing EU recovery funds.