FOREIGN investment in Spain dropped by 21.8 per cent in 2025, marking the lowest figure since 2021.
Foreign Direct Investment (FDI) plummeted to €30.8 billion, compared with 2024’s record figure of €39.4 billion.
The country’s top foreign investor was the US which invested some €10 billion, ahead of France’s €2.9 billion and the UK with just under €2 billion.
Over half of the total investment went to the capital, with €16 billion poured into Madrid.
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Meanwhile, Catalunya ranked second, attracting €4.5 billion in investment, followed closely by Aragon with €3.4 billion, primarily directed towards renewable energy and data centres.
Andalucia brought in €1.3 billion in investment, while no other regions surpassed the €1 billion mark.
The decline comes as foreign investment is on the up globally.
While the United Nations Conference on Trade and Development (UNCTAD) estimated that global foreign investment rose 14% last year, and by 5% in advanced economies, Spain is bucking the broader economic trend.
Analysts attribute the drop to Spain’s squatting issues and bureaucratic red tape.
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Spain’s squatting problem, or ‘okupas,’ has worsened in recent years.
In 2024, over 16,000 cases were reported, marking a 7.4 per cent increase from the previous year.
The issue is compounded by complex squatting laws, including the 48-hour rule: authorities must be notified within 48 hours for the police to remove squatters.
After this window, the matter becomes a civil case, often entailing months of legal proceedings.
As a result, property investors sometimes avoid putting money into Spain, fearing that property rights are insufficiently protected.
Spain’s dreaded bureaucracy also plays a role in turning away investors.
Administrative and tax hurdles pose major obstacles for investors, often delaying projects.
The latest data demonstrates that Spain is losing ground as investors chase more secure opportunities elsewhere.
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