Malaga port, Malaga, Andalusia, Spain

An economic insight into Spain and the Costa del Sol

Teba Siles | · 3 min. read

Direct foreign investments from the United States into Spain have charted a new course, with the Costa del Sol taking center stage. According to the ICEX 2023 Business Climate Barometer, U.S. investors have pinpointed Spain as a stable location for expanding their international operations.

According to ICEX, the Spanish market exhibits features that are attractive to U.S. capital: a skilled labor force, a large consumer market, and an infrastructure that facilitates trade and business expansion. Data suggests that over 85% of U.S. companies in Spain plan to maintain or increase their investment and workforce in 2024.

Investment dynamics and economic performance

U.S. direct investment in Spain displays a growth trend despite international economic challenges. ICEX figures show that in 2023, 86% of surveyed companies either increased or maintained their investment level, and 88% plan to continue in this direction in 2024. Spain projects an economic growth of 2% for this year, above the Eurozone average, as forecasted by the IMF.

Investment focus on renewable energies and technological sectors

According to FDI Markets, Spain is the third-largest global recipient of renewable energy investment projects. In 2023, this sector saw increased projects backed by U.S. companies eager to capitalize on Spain’s commitment to sustainability. Moreover, investment in information and communication technologies (ICT) and clean hydrogen has risen.

Energy costs and bureaucratic processes are cited as significant obstacles to business operations. However, 58% of the companies in the report have integrated sustainability strategies into their operations in Spain, indicating a commitment to sustainable development goals.

The Costa del Sol in the luxury real estate market

Málaga, facing an insufficient supply for the growing foreign demand, has established itself as the leader in luxury housing sales in Spain, according to the Idealista portal. Property prices have increased, positioning Málaga as a growing luxury real estate market resilient to economic fluctuations. A 200% increase in home purchases by Americans in recent years has been reported, driven by factors such as climate and culture.

The direct Málaga-New York flight operated by United Airlines is considered a factor that will further boost Americans’ arrival in the region. The Belleside Team, The Agency’s franchise in Marbella, highlights the interest of U.S. firms in the Costa del Sol.

Infrastructure and technological companies

The involvement of investment funds in transportation infrastructures, such as the Málaga Metro, controlled by a French fund, and the Port of Málaga, managed by Ocean Capital Partners and other Arab investment funds, demonstrates the attractiveness of these operations for investors seeking recurrent and secure income.

The presence of investment funds in tech companies like Freepik, acquired by EQT, and Medac, bought by KKR, reflects the interest in Málaga’s business dynamism.

U.S. investment in Spain, focusing on the Costa del Sol, shows a pattern of sustained growth and an interest in markets offering development potential. Málaga and Marbella emerge as critical points for foreign investment, driven by their economic dynamism, cultural appeal, and commitment to sustainability and technology.