Both Madrid and Barcelona say they are considering introducing measures such as tax breaks to attract financial corporations looking for a base within the European Union following the referendum result last month.
Madrid's regional government has officially launched a bid to become the “new financial centre of the European Union” and said it was preparing to send delegations to the City of London in September.
Cristina Cifuentes, the president of the Madrid regional government, said the goal was to attract established firms such as banks as well as start-ups, adding that the sort of companies the Spanish capital will target are in the technology, financial, automotive, aerospace and biotech sectors.
This week will see the launch of campaign buses in London with the slogan: "London whatever happens, Madrid will be there for you".
Cifuentes said: "Madrid is the perfect place to invest because it is one of the most important financial centres in the world and a centre of technology and innovation."
"There are investors right now in Britain looking for another city to establish themselves: that city is Madrid."
Kian Abouhossein, of JP Morgan said Madrid could well prove a leading contender, according to a report in Business Insider.
In a note sent to clients last week the banking analyst said Madrid came out on top both for cost and supply when it comes to office rents and capacity in different EU cities.
"In terms of markets with high availability and high oncoming supply, Madrid places first, followed by Frankfurt and Paris," he wrote.
"In terms of prime rental levels, Madrid is the cheapest (€27/sqm/month) although brokers note there is a lack of Grade A office space, followed by Frankfurt (€40/sqm/month) and Paris (€67/sqm/month)."
Madrid is also seeking to become the new home to the London-based European Banking Authority, according to a report in the Financial Times.
Meanwhile Barcelona was keen to place itself in the running.
Pere Aragonès, the regional economy minister, said Barcelona should follow the Irish government, which "is being offered as a platform" for multinational firms who want to leave UK and remain in the EU while the Deputy Mayor of Barcelona, Jaume Collboni, who is in charge of Enterprise, Culture and Innovation told Cope radio that Barcelona was preparing a strategy to woo investors from London.
Already boasting a thriving start-up scene, the city wants to capitalize on its reputation as a technology and telecoms hub, he said.
Deputy Prime Minister Soraya Sáenz de Santamaria said Spain would compete to host the European Banking Authority, the euro zone banking regulator, and the European Medicines Agency, which oversees the introduction of new medicines across the region.
“Both are of great interest to Spain and we will work on the possibility that at least one of them will be located on Spanish territory,” she said.
Winning the relocation of any of these key institutions would likely encourage private institutions to follow.