The Chairwoman of the Autonomous Community of Madrid, Isabel Díaz Ayuso, announced this future regulation which will be implemented in the following months, in order to attract foreign investments to the region of Madrid.

Madrid is the most attractive region in Spain for foreign investments representing the 70% of all foreign investments in Spain. This new tax regulation will increase even more the attractiveness of the region in regards with investments coming from abroad of the country.

The details of the norm are not clarified yet, but essentially, they will cover foreign equity investments in Real Estate, Spanish companies, financial products, etc… obtaining a 20% reduction in the corresponding region tax tranche during the next 6 years.

In order to benefit from this initiative, the government of Madrid states that two conditions will need to prevail:

1.- The first one, the investment needs to be effective from abroad, meaning at least five years living abroad Spain;

2.- And the second one, the investment needs to generate wellness and prosperity for everyone. It seems that this requirement needs to be related with generating job opportunities, in any way.

Regarding financial products, they will not necessarily be located in Madrid, unlike Real Estate, which will need to be located in the region.

This amendment is considered by the regional government as a welcoming gesture to all foreign investments, which will find in Madrid liberty and prosperity. And also it may mean a balance gesture in relation to the change made by the central government on relation with the heritage tax.

The regional government states that this measure will have an impact of 13.000 new job opportunities by each 1.000 million of investments and 886 millions to the regional GDP. This will generate more social contributions, more consumption and more income through tax, approximately 125 millions.  

This tax new regulation is thought to help national companies obtaining new finance mechanisms to expand their business and to facilitate foreign investments in Madrid.

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