Royal Decree 664/1999 modified the former rules by deregulating nearly all transactions of this kind (with the provisos and exceptions set forth below) and eliminating the requirement for “prior verification”. The new rules are designed to adapt Spanish domestic law to the rules on the freedom of movement of capital contained in Articles 73 B et seq. of the Treaty on European Union.

The most noteworthy aspects of the applicable rules are as follows:

• Virtually identical rules are established for foreign investment in Spain and Spanish investments abroad.
  
  
• "Prior verification", as a mechanism for controlling foreign investments disappears completely. Foreign investments are, as a general rule, subject only to notification after the investment has been made. The only exceptions are:
  
  
  1. investments from tax havens, which in general must be notified beforehand, and
     
     
  2. foreign investments in activities directly related to national security, and real estate investments for diplomatic missions by States that are not members of the European Union and require “prior verification” from the Spanish Council of Ministers.
     
     
• There is no longer any obligation for foreign investments to be formalized in the presence of a Spanish public notary (unless specific legislation provides otherwise), eradicating the latter’s role in notifying investments to the Foreign Investments Register.
  
  
• The Royal Decree does not apply to certain foreign investments in Spain below € 3,005,060.52 (unless the investment originates from a tax haven) and they do not, therefore, need to be reported.
  
  
• The former classification of investments as direct investments, portfolio investments, real estate investments and other investments, disappears.
  
  
• Regulation of foreign investments in specific industries falls outside the scope of application of this Royal Decree. The following investments will be subject to the requirements imposed by the competent body established by industry-specific legislation: investments in the air transportation and radio industries, in industries relating to minerals, raw materials of strategic interest and mining rights, in the television, gaming, telecommunications and private security industries, in industries concerned with the manufacturing, marketing or distributing of arms and explosives, and in national security-related activities (these latter activities are subject to the clearance rules contained in the Royal Decree). However, once those requirements are met, the provisions of the Royal Decree will then be applicable.