NAVIGATING INTERNATIONAL INVESTMENT OPPORTUNITIES

The economic relationship between Spain and the United Arab Emirates has strengthened considerably in recent years, reflecting broader trends in global investment and economic diversification. As capital increasingly flows between jurisdictions, investors are seeking stable and well-regulated markets which offer long-term growth opportunities and access to the European market. This growing investment relationship presents significant opportunities, while also highlighting the importance of careful legal and tax planning to ensure cross-border investments are structured efficiently and in accordance with the applicable legal frameworks of both jurisdictions.

SPAIN: A STRATEGIC DESTINATION FOR UAE INVESTMENT

The increasing internationalisation of the global economy has fundamentally transformed the way business and private investors structure their investments. Spain has emerged as an increasingly important destination for UAE investors seeking opportunities within the European market. Spain offers significant investment opportunities in sectors that closely align with the UAE’s own economic priorities, extending beyond its traditional strengths in tourism and real estate, including renewable energy, infrastructure, technology and digital transformation. The two countries share a commitment to developing future-focused industries aligning with the UAE’s objectives outlined in the “We the UAE 2031” vision. This shared commitment was reflected during the fifth UAE-Spain Joint Economic Committee, held in Madrid in June 2025, where both governments agreed to deepen cooperation in areas such as artificial intelligence, clean energy, advanced technology and sustainable infrastructure as key fields for collaboration.

Spain’s position as a member of the European Union, combined with its advanced infrastructure and strong innovation ecosystem, provides UAE investors with access to European markets while participating in high-growth sectors. This strategic alignment has contributed to the rapid expansion of economic ties between both countries. The UAE is the largest Arab investor in Spain, with investments exceeding USD 7 billion, while bilateral non-oil trade reached a record USD 3.3 billion in 2024, a 17% increase on the previous year. These figures reflect a relationship evolving beyond traditional commercial exchanges and towards a broader investment partnership based on innovation and long-term economic cooperation.

BILATERAL LEGAL AND TAX FRAMEWORK

The growing economic relationship between Spain and the United Arab Emirates is largely underpinned by the bilateral legal and tax frameworks, which provide protection and certainty for investors operating across both jurisdictions.

The Spain-UAE Double Taxation Avoidance Agreement (the “DTAA”) is a bilateral treaty designed to prevent the double taxation of income and facilitate cross-border investment between the two countries. The DTAA applies to taxes on income and capital, creating a clear framework for determining which jurisdiction has taxing rights. It allocates those rights by establishing residency tie-breaker rules and setting withholding rate caps, thereby reducing the risk of double taxation and providing greater certainty for businesses and investors structuring cross-border transactions.

Additionally, Spain’s well-established legal and regulatory environment, grounded in its EU membership, is a further factor contributing to its attractiveness as an investment destination. As a Member State of the European Union, Spain benefits from a transparent legal environment. Alongside this, Spain operates a Foreign Direct Investment (FDI) screening regime, under which certain investments in strategic sectors may require prior authorisation, primarily to protect national security. The European Union has further strengthened this framework through the adoption, in 2026, of a new Regulation on the screening of foreign investments into the Union, which will apply from January 2028. These developments highlight the importance of assessing regulatory requirements at an early stage of any transaction, and UAE investors should factor potential approval requirements into the structuring of investments in Spain.

While the Spain-UAE legal and tax framework provides investors with greater certainty, the complexity of international transactions means that effective structuring must begin before an investment is undertaken.

THE UAE AS A GLOBAL INVESTMENT HUB

The UAE has established itself as one of the world’s leading centres for international investment. Its strategic location at the crossroads of Europe, Asia and Africa, together with its advanced infrastructure, has strengthened its position as a gateway for cross-border trade and investment.

The UAE holds a significant position: it ranks 29th globally – and first in the Arab region – in the United Nations Industrial Development Organisation’s (UNIDO) Competitive Industrial Performance Index. The UAE has also secured a leading position in foreign direct investment (FDI), with inflows reaching approximately USD 30.6 billion in 2023, demonstrating the UAE’s attractiveness as a destination for international capital. The UAE’s growing population, as well as its stable economy, makes it appealing for investors.

Additionally, the UAE is becoming increasingly popular for establishing international investment structures due to its tax framework and sophisticated regulatory environment. The introduction of a 9% corporate tax has aligned the UAE with evolving international tax standards, while the absence of personal income tax continues to enhance its appeal for investors. Financial centres such as the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) complement this framework, as they provide established regulatory environments for investors. These factors have contributed to the UAE’s emergence as a leading source of outbound investment, with investors increasingly seeking opportunities in stable European markets such as Spain.

WHY DÁVILA & KAYALI

The continued growth of investment between Spain and the UAE highlights significant opportunities for investors. However, navigating cross-border transactions demands more than identifying attractive opportunities – it requires careful legal and tax planning and a thorough understanding of both jurisdictions.

Our multidisciplinary team provides integrated legal advice throughout every stage of the investment process, from legal due diligence to tax and regulatory advisory.

As economic ties between Spain and the UAE continue to strengthen, investors will increasingly require legal advisors capable of combining technical expertise with a profound understanding of both markets. At Dávila & Kayali, we advise companies, family offices, high-net-worth individuals and international investors on cross-border transactions, providing tailored legal solutions that combine commercial insight with technical expertise.

The evolution of the Spain-UAE relationship reflects a broader shift in international investment, where legal certainty and commercial strategy are increasingly interconnected. At Dávila & Kayali, we help our clients navigate this evolving landscape by delivering tailored legal solutions that support sustainable cross-border investment between two of the world’s most dynamic markets.