Spain does not ask a company to obtain prior permission to invest in India, but it does ask for a declaration. A Spanish resident that acquires 10% or more of a foreign company must declare the investment to the Registro de Inversiones Exteriores within one month of the transaction, using form D-5A, and later declare disposals on D-5B. Intra-group financing above EUR 1 million with a term over a year is also declared, and an annual report (form D-8) is due within seven months of the foreign company's year end where the holding is at least 10% and the foreign company's capital or net equity exceeds EUR 1.5 million. Alongside the declaration, the Spanish parent needs a board decision, correct corporate records, a view on how the Indian income will be taxed at home and, for larger groups, related-party documentation. This page is a map for your Spanish adviser, who must confirm current thresholds and forms.
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Key facts
| Prior approval | None described in the official guide for ordinary investments abroad |
|---|---|
| Declaration | Form D-5A for acquisitions and capital contributions of 10% or more, within one month; D-5B for disposals; D-5A also for branches |
| Annual report | Form D-8 within seven months of the foreign company's year end where the holding is at least 10% and capital or net equity is above EUR 1.5 million, or for holding companies |
| Intra-group financing | Declared if above EUR 1 million and over one year; repayments declared too |
| Corporate steps | Board resolution; shareholder approval where the bylaws require it; notarial documents for powers of attorney |
| Tax | General corporate income tax rate of 25%; participation exemption for qualifying holdings; credit for foreign tax otherwise |
| Documentation | Related-party documentation and country-by-country reporting for larger groups |
| Beneficial ownership | Registro de Titularidades Reales and the Mercantile Registry records must match the ownership chain given to India |
The Spanish steps before and after investing
- Check the bylaws and any shareholders' agreement for limits on foreign investment, guarantees or loans, and obtain the required approvals.
- Pass a board resolution authorising the Indian investment, naming the signatories and the proposed Indian directors, and recording the commercial reason, which later supports the treaty position.
- Execute powers of attorney before a Spanish notary where Indian filings will be signed by an attorney, and arrange the apostille. See documents and apostille.
- After the investment is made, file the declaration of the investment (form D-5A) within one month through the Spanish registry's procedure, usually via the bank or electronically; keep the evidence of the Indian share capital.
- Declare intra-group loans above EUR 1 million and term over one year, and later repayments.
- Each year, file the D-8 report where it applies, and include the Indian subsidiary in the group's consolidation, transfer pricing and tax files.
What the Spanish forms ask for
| Item | Form and trigger | Timing | Notes for India |
|---|---|---|---|
| Acquisition or capital contribution of 10% or more | D-5A | Within one month of the transaction | Use the date the Indian shares are allotted |
| Disposal of the holding | D-5B | Within one month | Also declare the disposal that brings the holding below 10% |
| Branch investment | D-5A | Within one month | Applies to every investment in a foreign branch |
| Annual report | D-8 | Within seven months of the foreign year end | The Indian year ends on 31 March, so the report is due by 31 October |
| Intra-group loan above EUR 1 million and over one year | Declaration of the loan | Within the declared period | Repayments must also be declared |
| Investment linked to a non-cooperative jurisdiction | Declaration whatever the amount | Within one month | Check if any intermediary is in such a place |
Tax on Indian income in Spain
Spain taxes resident companies on worldwide income, but income from qualifying foreign holdings is largely exempt. A holding of at least 5% (or an acquisition cost above EUR 20 million) held for at least a year, in a company that has been subject abroad to a tax of a similar nature and rate, generally qualifies for the participation exemption on dividends and on gains. Spain's rules have been amended since 2021, with the exempt percentage and the treatment of holding companies changing, so a Spanish adviser should model the real figures. For fees, royalties and interest, which are ordinary income in Spain, the Indian withholding tax is relieved by a credit up to the Spanish tax on the same income.
Controlled foreign company rules can attribute some income of a foreign subsidiary to its Spanish parent when the subsidiary earns passive income and is taxed at a low level. An Indian operating company paying normal Indian tax at a rate comparable to the Spanish rate is unlikely to be caught, but a company with large passive income or an intermediate holding entity should be reviewed.
Group reporting and transfer pricing
- Spain requires documentation of related-party transactions; larger groups prepare a master file, a local file and, above the group threshold, country-by-country reporting. The Indian subsidiary's transactions with the Spanish parent belong in the file, and its prices should be consistent with the Indian study. See transfer pricing.
- EU rules on minimum taxation of large groups and on reporting of cross-border arrangements may apply to the group; they are outside Indian law, and your Spanish adviser should confirm them.
- The Indian year end (31 March) does not match the Spanish calendar year, so plan a bridge for consolidation and for the D-8 report.
Beneficial ownership and records
India's banks, the Registrar of Companies and the Reserve Bank all ask who owns the Spanish parent. Spain keeps a register of beneficial owners and the Mercantile Registry holds the company's records, and these should be consistent with the ownership chart you give India. Gaps or mismatches here are a common cause of delays in Indian bank onboarding. Keep up-to-date extracts and a signed beneficial ownership declaration.
Using Spanish public support
Spanish groups sometimes use export credit, internationalisation grants or chamber of commerce programmes when entering new markets. These programmes have their own conditions and reporting, which can include evidence of the Indian company's establishment. If you plan to use any, tell your Indian adviser early so the documents match.
Official sources
Check the rules at the primary sources: Income Tax Department (India), Reserve Bank of India, Ministry of Corporate Affairs, Agencia Tributaria (Spain), Spanish Ministry of Economy, Trade and Business and the Ministry of External Affairs (India).
Frequently asked questions
Does a Spanish company need permission to invest in India?
The official guide to Spanish investment abroad describes no prior authorisation for ordinary investments. A declaration to the Registro de Inversiones Exteriores is required after the investment.
When must the Spanish investment be declared?
Within one month of the transaction for acquisitions of 10% or more, on form D-5A, and disposals on D-5B.
What is the annual D-8 report?
A report on the foreign company filed within seven months of its year end, where the Spanish holder has at least 10% and the foreign capital or net equity exceeds EUR 1.5 million, or the company is a holding.
Do intra-group loans need a declaration?
Loans from a Spanish company above EUR 1 million with a term over one year are declared, and so are repayments.
Are Indian dividends taxed in Spain?
Generally largely exempt for a qualifying holding under the participation exemption. Confirm the current percentage and conditions with a Spanish adviser.
Do CFC rules apply to an Indian operating company?
Rarely, because an operating company that pays normal Indian tax is not the usual target, but passive income and holding entities should be reviewed.
What Spanish records does India ask for?
Mercantile Registry extracts, the bylaws, a board resolution, beneficial ownership information and recent accounts.
Who prepares the Spanish declarations?
Your Spanish adviser or the bank handling the transfer. The Indian adviser supplies the Indian evidence.
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Last updated 2 November 2026. General information only, not legal or tax advice. Indian and Spanish rules change often; confirm current requirements before acting.