Foreign investment in Spain grew by 8.6% in 2016 to reach 423.68 billion

This investment supports 1.36 million jobs, 12.6% more than in 2015

Total foreign investment (stock) in Spain was 423.68 billion euros at the close of 2016, up 8.6% over 2015. For the same period, Spanish investment abroad was 500.03 billion euros, 8.9% more than one year earlier, according to data from the Foreign Investment Registry (RIE) at the Ministry of Economy, Industry and Competitiveness. This growth is significantly higher than the figures for the worldwide investment position, which according to the United Nations Conference on Trade and Development (UNCTAD) rose by a meager 0.3%.

Productive foreign investment in Spain, discounting foreign securities holding companies (ETVE), which do not have direct economic effects, was 379.41 billion, 9.1% higher than in the previous year.

Gráfico stock inversión extranjera en España 2016

These investments support 1.36 million jobs, 12.6% more than in 2015. The figure for business generated by foreign stock was 418.87 billion euros, a little over one third of Spain's GDP, up 5.8% since the previous year.

The results for companies part-owned by foreign investors (only percentages above 10% are considered here) rose by 101.6% to 33.15 billion euros.

The data from the RIE show that the number of companies receiving foreign investment has grown by 6.1 since 2015, going from 12,445 to 13,209.

With regard to the source of the investment, the list is headed by the United States, with 59.91 billion (15.8% of the total and up 11.6% since 2015); followed by the United Kingdom, with 49.81 billion (13.1% and growth of 14.6%) and France (12% with growth of 11.7%). Investment from Italy and Germany was down by 11.2% and 3.4% respectively.

Stock in terms of the sectors receiving the investment has remained stable in recent years, and is concentrated in electrical energy and gas supply (14.6%), manufacture of other non-metallic mineral products (8.6%), wholesale trade and commercial brokerage (7%), telecommunications (6.3%),and real estate activities (5.2%) among others.

84% of the stock is concentrated in three autonomous regions: Madrid (66.4% of the total, with an increase of 12.6% over 2015); Catalonia (13.4%, up 3.6%); and the Basque Country (4.2% and an increase of 7.8%), although it should be noted that the so-called “head office effect” tends to overvalue locations in major financial hubs. In regard to the impact of foreign investment on employment, Madrid absorbs 30.3% of the jobs, followed by Catalonia with 22% and Andalusia with 8.7%.

Methodological note
The position or stock is the total active foreign investment on a fixed date (in this case the close of 2016), whereas the flow data –which are published quarterly– count incoming and outgoing transactions in a certain period. Foreign investment stock is the result of adding the figure for the net equity share (accounting value) of the directly invested company, and the current balance of the net loans to those companies by non-resident investors.

The statistics on stock are published very late because for the purposes of the RIE the 2016 accounting year for foreign companies investing in Spain does not close until June 30, 2017, and the companies have nine months to declare their investments (until March 2018).