Spanish companies are boosting their direct investments in the Netherlands and Luxembourg

Spanish companies investing abroad amounted to 29,230 million euros during 2022, according to updated data from the Minister of State for Trade. The figure representing a growth of 7.5% compared to the previous year – but still far from the 39,942 million invested in 2017 – reflects a significant growth in total FDI inflows into the Netherlands and Luxembourg, two countries that were. In the eyes of the government after Ferrovial’s departure to Amsterdam was confirmed.

The growth achieved at the expense of lower direct investment in other historical destinations such as the United States, France, Italy or Portugal, and especially in some Latin American countries such as Argentina, Mexico, Uruguay and Peru, In the past decade, Spanish companies have been one of the drivers for the arrival of foreign capital. Total Spanish investment in this continent will almost halve in 2022.

The data examined by the target indicates that the investment of Spanish companies in the Netherlands amounted to 4,229.7 million euros in 2022, nearly ten times the 381 million in the previous year. However, the number 2022 is still distorted by the effects of the pandemic, The comparison is more accurate with the years 2020 and 2019, when they amounted to 1010 and 1809 million, respectively.. Overall, last year’s number is one of the highest in recent decades and triples the pre-pandemic numbers.

UK investment

There has also been significant growth in Luxembourg Spanish corporate investment amounted to €6,109 million, an improvement of 37% over last year. Investment in this country has recovered – and accelerated – after recording 5,750m in 2020. The UK completed the investment destinations platform retaining first place with 8,269m, although slowing by 2.6%. Between the United Kingdom, the Netherlands and Luxembourg, they accounted for 64% of all direct capital flows leaving Spain.

The choice of these three countries was not accidental. The first has not been in the EU since the end of 2020, while the other two are considered economies with a low tax burden. In the case of the United Kingdom, the investment of Spanish companies has doubled in the past two years, exceeding 8,000 million annually from the 1,280 and 3,700 million registered in 2019 and 2020. Its tax conditions, its policy to attract investment and being the epicenter of banking services on the continent have convinced large companies in our country.

In the case of the Netherlands and Luxembourg, the tax regimes are characterized by a lower tax burden, making them a prime destination for companies from all over Europe – and from outside the continent – as a base of operations and a platform from which to invest in the rest of the continent. In terms of investment they are called “direct country” because capital flows do not usually stay in their entire economy.

Germany is gaining ground

The same thing happens in the case of investment arriving in Spain. This newspaper has already published that the capital flow of Luxembourg-based companies rose in 2022 to 11,773 million euros, up 29.8% from the previous year. If we add to this that the investment from Holland was 1437 million, we see Between the two countries, they concentrated 39% of the total foreign direct investment arriving in Spain in 2022.

The logic is the same. Companies use Luxembourg and the Netherlands as a platform to access Spain, as evidenced by investment data by country of “ultimate origin” of the investment, that is, referring to the country of residence of the ultimate owner of the investment, where the chain of ownership has been exhausted. in this list, The United States emerges as the number one investor with 9,453 million (27.7% of the total), the United Kingdom with 6,097 million euros (17.8%), Germany with 4,790 million (14%), and France with 3,410 million (10%).

Returning to the investment of Spanish companies abroad, TStrolling down the podium, the big winner is Germany, still in fifth place in terms of size. Capital inflow into Germany amounted to 1,457 million, triple the 355 million recorded in the previous year. It is followed by Singapore in sixth place with 678 million, which almost doubles the data for 2021 by 20. A historical partner and an emerging economy.

The collapse in Latin America

On the other side of the coin is the United States of America It stayed at 3,581 million in fourth place and after a 34% drop. Other European countries are also losing weight, such as France, with 292 million, down 59%, Portugal, with 279 million, down 58%, and Italy, with 117 million, down 62%.

One of the regions with the lowest inflow of Spanish capital is Latin America, an area where Spanish companies have historically led foreign investment. The data indicates that in 2022 their number was 2,564 million, which is a decrease of 43% compared to 4,503 million in 2021.. The number is also a far cry from the 10,713 invested in 2018, a year before the pandemic hit.

Brazil (6th largest) remains the main destination in the region with investments of €665m in 2022, although down by 6.7% compared to the previous year. A collapse that was felt more strongly in the other two giants of the region: Mexico and Argentina. The first reached 145 million, 90% lower, and the second remained at 139, down 35%. For its part, Peru reached 163 million, a collapse of 39%, and Uruguay (81 million) left 90%. Within the continent’s large economies, the only countries that have grown are Chile with 357 million, 77.9% more (8th) and Colombia (10th) with 186 million, an improvement of 187%.