23 Jun, 2025 @ 15:48
1 min read

Spain drops out of foreign investment top 10 over ‘squatter problem and red tape’

Spain drops out of foreign investment top 10 over 'squatter problem and red tape'

HIGH taxes, squatters, and bureaucracy are some reasons touted as to why Spain has dropped out of a top 10 list for short-term foreign investments.

Spain is now ranked 11th out of 25 large world economies according to the latest Confidence Index for Foreign Direct Investment (FDI) compiled by global management consulting firm Kearney.

The country has fallen three places in the last two years, having been in the top 10 for since 2021 and has recorded an annual 13% fall in the index rating.

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In this year’s study, Spain has been overtaken by Italy which has normally been a number of places behind it.

The FDI annually ranks the 25 most attractive countries in during a three-year horizon, measuring the confidence of global investors in each country.

Gregorio Izquierdo, general-director of the CEOE, which represents private and state businesses in Spain, believes the 13% fall is down to ‘legal uncertainty’.

“There is a delay and lack of effectiveness of legal processes including excessive tax litigation in our country and an insufficient defence of the right to private property,” he claimed.

Though squatting is on the rise, it is still relatively minor, but Izquierdo said it ‘greatly damages the image of Spain over protecting property rights and it is something that we should avoid’.

Other factors put forward are regulatory complexity and excess bureaucracy with a ‘tangle of regulations, obligations and licenses that do nothing but hinder business activity’.

He also referred to excessive taxation and the lack of tax incentives for investment as well as political instability due to the minority Pedro Sanchez government and corruption allegations.

The Madrid region accounts for more than 64% of FDI in Spain, followed by Catalunya- which appears to be falling a little bit.

The study shows rises for the Basque Country and Valencian Community which is a reflection of regional diversification of investment.

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Alex Trelinski

Alex worked for 30 years for the BBC as a presenter, producer and manager. He covered a variety of areas specialising in sport, news and politics. After moving to the Costa Blanca over a decade ago, he edited a newspaper for 5 years and worked on local radio.

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