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Spain: your partner in Europe
Global Market Access from an International Economy
October 2014
Business Opportunities
Investment Framework
0
1. Spain: a highly internationalized economy
2. Global Market Access
3. Macroeconomic Situation and Structural Reforms
4. Business Climate
� Infrastructure and Technology
INDEX
� Infrastructure and Technology
� Incentives and taxes
� Human capital: Productivity, Skilled Labor Force and Compe titive Costs
� Quality of life: Expat setting up
5. Business Opportunities
6. ICEX / Invest in Spain
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Spain is the world’s 13th largest economy and the 5 th largest economy in the EU: GDP worth 1.4 trillions USD
1. Spain: a highly internationalized economy
GDP comparison of major economic regions, USD billions
Germany: 3,636
EU27: 17,372
USA:
NAFTA: 19,883
Asia: 13,435
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UK: 2,523
Spain: 1,359
France: 2,807
Italy*: 2,072
USA:16,768
Mexico: 1,261
Canada: 1,827
China*:9,469
Brazil: 2,246
Russia: 2,097
India: 1,877
BRICs: 15,413
NIEs: 3,807
ASEAN-5: 2,012
Japan:4,899
Australia: 1,506
Source: IMF, 2014. Data Referred to 2013*Estimated
Spain is the 7th largest exporter of commercial ser vices worldwide, 4th in the EU, and the 18th-ranked exporter of merchandise trade.
Commercial Services ExportsUSD Millions
1. Spain: a highly internationalized economy
Merchandise Trade ExportsUSD Millions
20132013/2012
%
1 United States 662,111 5.0%
2 United Kingdom 289,970 0.6%
3 Germany 286,823 8.0%
4 France 233,288 8.3%
20132013/2012
%
1 China 2,209,626 0.0%
2 United States 1,578,972 2.2%
3 Germany 1,452,795 3.4%
4 Japan 715,097 -10.5%
Source: World Trade Organization (WTO), 2014.
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Source: World Trade Organization (WTO), 2014.
4 France 233,288 8.3%
5 China 207,018 8.7%
6 India 152,587 4.8%
7 Spain 144,452 5.5%
8 Japan 143,890 1.0%
9 Netherlands 142,006 8.3%
10 Hong Kong 135,024 7.1%
World 4,623,710 5.5%
4 Japan
5 Netherlands 663,524 1.5%
6 rance 579,647 1.9%
7 Republic of Korea 559,632 2.1%
8 United Kingdom 541,348 14.5%
9 Hong Kong 535,546 8.7%
10 Russian Federation 523,327 -1.1%
…. … …
18 Spain 315,518 6.9%
World 18,784,000 2.1%
1. Spain: a highly internationalized economy
Spain, strong and sustainable external sector perfo rmance
Export of good and services/GDP %
In the last six years, Spanish exports of goods and services have dramatically risen.
�Spanish exports reached 34.1% of GDP in 2013, 7.7 p.p. higher than in 2007, and morethan in France, Italy or the United Kingdom.
Source: Eurostat, 2014.
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� A competitive combination: technology, innovation, productivity and lower Unit LaborCost have lead to a competitiveness based expansion of exports.
While the world export market share of Germany, Jap an, Italy, or France has declined during last decade, due to competition from emergin g countries, the Spanish share of world merchandise exports has remained stable (1.6% in 2012).
Country share in world export of merchandise trade, 2006-2013
1. Spain: a highly internationalized economy
Source: World Trade Organization (WTO), 2014.
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1. Spain: a highly internationalized economy
Spanish and foreign companies established in Spain focus on EU markets, but areincreasing their exports and business towards Latin Americ a, USA, Asia, Russia, Africaand Middle East using Spain as a platform for Global Business .
�In 2013 our exports to non-EU countries kept the upward trend of the last few years:�Exports to Africa went up by 8.4% (particularly to Algeria by 11.4% and South Africaby 33.4%),�To Latin America by 6.4% (especially to Argentina, +36.3% and to Brazil, 28.9%)�To Asia by 10.3%, (out of which 4.7% to China, 12.9% to Thailand and 10.7% to�To Asia by 10.3%, (out of which 4.7% to China, 12.9% to Thailand and 10.7% toTaiwan)
�However, the EU is still our main business partner with a 62.6% of our exports:�Spanish sales to this region increased by 4.7 percentage points in 2013�To the euro area by 4.1%�To the rest of the EU countries by 6.8%.
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Tourism: Spain is the 2nd country worldwide in revenues and t he 1st in Europe.Spain ranks 3 rd in tourist arrivals worldwide and 2 nd in Europe.
INTERNATIONAL TOURIST ARRIVALSGENERATED REVENUE (INTERNATIONAL TOURISM)
1. Spain: a highly internationalized economy
2013/2012
(%)
1 USA 139.6 10.6%
2 Spain 60.4 7.4%
3 France 56.1 4.8%
Country 2013
(Bill USD)
2013/2012
(%)
1 France .. ..
2 USA 69.8 4.7%
3 Spain 60.7 5.6%
2013
(Mill. People)Country
Source: WTO, 2014. Tourism Highlights.
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Source: WTO, 2014. Tourism Highlights.
3 France 56.1 4.8%
4 China 51.7 3.3%
5 Macao 51.6 18.1%
6 Italy 43.9 6.6%
7 Thailand 42.1 24.4%
8 Germany 41.2 8.1%
9 United Kingdom 40.6 12.1%
10 Hong Kong 38.9 17.7%
World 1,159 5.3%
3 Spain 60.7 5.6%
4 China 55.7 -3.5%
5 Italy 47.7 2.9%
6 Turkey 37.8 5.9%
7 Germany 31.5 3.7%
8 United Kingdom 31.2 6.4%
9 Russia 28.4 10.2%
10 Thailand 26.5 18.8%
TOTAL 1,087 5.0%
Spain is the 11 th largest economy in terms of accumulated inward and outward FDI stock in the world.
Inward FDI stock, USD Millions
Outward FDI stock, USD Millions
1. Spain: a highly internationalized economy
Economy
Inward FDI stock 2013
Mill USD Share
1 United States 4,935,167 19.4%
2 United Kingdom 1,605,522 6.3%
3 Hong Kong, China 1,443,947 5.7%
4 France 1,081,497 4.2%
5 China 956,793 3.8%
Economy
Outward FDI stock 2013
Mill USD Share
1 United States 6,349,512 24.1%
2 United Kingdom 1,884,819 7.2%
3 Germany 1,710,298 6.5%
4 France 1,637,143 6.2%
5 Hong Kong, China 1,352,353 5.1%
6 Switzerland 1,259,369 4.8%
Source: UNCTAD, WIR, 2014. Source: UNCTAD, WIR, 2014.
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5
6 Belgium 924,020 3.6%
7 Germany 851,512 3.3%
8 Singapore 837,652 3.3%
9 Switzerland 747,436 2.9%
10 Brazil 724,644 2.8%
11 Spain 715,994 2.8%
12 Netherlands 670,115 2.6%
13 Canada 644,977 2.5%
14 Australia 591,568 2.3%
15 Russian Federation 575,658 2.3%
16 British Virgin Islands 459,342 1.8%
17 Italy 403,747 1.6%
18 Mexico 389,083 1.5%
19 Sweden 378,107 1.5%
20 Ireland 377,696 1.5%
World 25,464,173 100%
6 Switzerland 1,259,369 4.8%
7 Netherlands 1,071,819 4.1%
8 Belgium 1,009,000 3.8%
9 Japan 992,901 3.8%
10 Canada 732,417 2.8%
11 Spain 643,226 2.4%
12 China 613,585 2.3%
13 Italy 598,357 2.3%
14 British Virgin Islands 523,287 2.0%
15 Ireland 502,880 1.9%
16 Russian Federation 501,202 1.9%
17 Singapore 497,880 1.9%
18 Australia 471,804 1.8%
19 Sweden 435,964 1.7%
20 Brazil 293,277 1.1%
World 26,312,635 100%
� USA, UK, Germany, France and ItalyCompanies are the largest investors inSpain.
� Increasing interest of companiesfrom Asia (especially from China,
Spain: Inward FDI by countryStock : EUR Millions
1. Spain: a highly internationalized economy
1 USA 57,308.5 15.9%2 ITALY 48,605.8 13.4%3 FRANCE 37,124.3 10.3%4 UK 35,455.4 9.8%5 GERMANY 28,973.0 8.0%6 MEXICO 19,465.1 5.4%7 LUXEMBOURG 19,241.3 5.3%8 PORTUGAL 18,749.6 5.2%9 SPAIN 18,234.9 5.0%10 NETHERLANDS 14,740.0 4.1%11 SWITZERLAND 10,580.9 2.9%
% total 2012
COUNTRY STOCK 2012
from Asia (especially from China,India, Korea and Japan) Latin America(especially from Mexico and Brazil) andfrom the Middle East Countries.
Source: Registro de Inversiones, 2014. Data Refered to 2012
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11 SWITZERLAND 10,580.9 2.9%12 BRAZIL 8,812.9 2.4%13 UAE 5,445.3 1.5%14 SWEDEN 4,999.4 1.4%15 CANADA 3,778.5 1.0%16 JAPAN 3,613.5 1.0%17 BELGIC 2,771.0 0.8%18 COLOMBIA 2,765.6 0.8%19 URUGUAY 2,456.7 0.7%20 ISRAEL 1,260.5 0.3%21 IRELAND 1,172.3 0.3%22 AUSTRIA 1,004.4 0.3%23 ARGENTINA 980.0 0.3%24 DENMARK 921.9 0.3%25 NETHERLANDS ANTILLES 859.6 0.2%
12,229.6 3.4%361,550 100.0%
OTHERTOTAL
Spanish companies are among leading companies in th e world:
1. Spain: a highly internationalized economy
� 3 out of every 5 flights world-wide are controlled usingSpanish air navigation systems.
� Telefonica is one of the largest telecommunicationscompanies in the world (by market capitalization andnumber of customers).
� Santander Bank is the first bank in the Eurozone and oneof the first in the world (stock market capitalization: morethan 90 billion Euros) and BBVA now operates in 40countries.
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� IBERDROLA is the 4th largest utility company in theworld (by market capitalization).
� Spanish infrastructure sector is a world leader in foreignmarkets. Thirteen Spanish companies totaled 80 billiondollars in revenue.
� The Al Shoula Group, a Spanish-Saudi consortium, willmanage the high-speed train between La Mecca –Medina.
� The Panama Canal expansion project has beenawarded to Spanish-led consortium.
� The Spanish company Abengoa has placed in service inArizona the largest solar power plant in the world.
1. Spain: a highly internationalized economy
Spain is the 9th most open country to Foreign Investment acco rding to OECD’s FDIRestrictiveness Index
CLOSE OPEN
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1. Spain: a highly internationalized economy
� Over 12,800 foreign companies are currently located in Spai n across alleconomic sectors
� 70 of the FORBES Top 100 companies have branches in Spain
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Domestic market of over 46 million consumers: Spain has a GDP per capita (PPP) above the EU-27 average.
2. Market Access
Spain grants free access to the world ´s largest market, the European Union: more than 500 million consumers
CountryGDP per capita
RK USD1 United States 5 53,1012 China 92 9,8443 Japan 21 36,8994 Germany 14 40,007
Capacity for consumption of goods
Source: IMF 2014
Advantages to operate in EU:
� Intra-European duty free market.
� The free movement of goods &services, capital and persons.
� Single currency: EURO.
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4 Germany 14 40,0075 France 22 35,7846 United Kingdom 20 37,3077 Brazil 78 12,2218 Russia 57 17,8849 Italy 30 30,289
10 India 131 4,07711 Canada 8 43,47212 Australia 9 43,07313 Spain 32 29,85114 Mexico 65 15,56315 Korea 26 33,189
The best European platform for doing business with Latin America:
2. Market Access
16 Agreements to Avoid Double Taxation in Central and South America: Argentina, Bolivia, Brazil, Barbados, Chile, Colombia, Costa Rica, Cuba, El Salvador, Ecuador, Mexico, Panama , Jamaica, Trinidad & Tobago, Uruguay, Venezuela.
•20 Agreements for Protection and Promotion of Reciprocal Investments Bolivia, Promotion of Reciprocal Investments Bolivia,
Colombia, Costa Rica, Cuba, Chile, Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Rep. Dominicana, Trinidad and Tobago, Uruguay, Venezuela and Argentina.
Excellent communications and infrastructure : Madrid concentrates around 35% of total air traffic between Europe & Latin America.
Agreements for Protection and Promotion of Reciprocal Investments
Agreements to Avoid Double Taxation
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2. Market Access
1. Common historical , cultural and linguisticroots. Institutional network relationships .
2. Strong economic and business ties : Spanish companies have invested in strategic sectors in Latin America (banking, utilities, communications and transport, building industry, airport management, etc.)
3. Good communications : Spain is a major connecting hub for airlines traveling between
Why is Spain a perfect hub for doing business in La tin America?
connecting hub for airlines traveling between America, Europe and Middle East.
4. Multinational companies are increasingly choosing Spain for their Latin American headquarters .
5. Spain has become the European HQ for Latin American multinational companies.
6. In the USA there are more than 50 million people working in Spanish.
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Spain is the world ´s 2nd largest investor in Latin America among Europ ean countries.
2. Market Access
Spain: Top- Outward FDI Stock by country EUR Millions
2011 2012% TOTAL 2012
1 UK 51,882 59,342 14%
2 BRAZIL 60,157 56,692 13%
3 USA 52,534 53,884 12%
4 NETHERLANDS 30,764 36,496 8%
5 MEXICO 26,966 29,202 7%
6 PORTUGAL 22,159 21,705 5%
Source: ECLAC, 2014.
Latin America and the Caribbean: origin of FDI
18
USA
24%
Netherlands
11%
Canada
6%Spain
5%Japan
4%
Latin
America
14%
Others
36%
Source: Spanish Ministry of Economy and Competitiveness, 2014.
6 PORTUGAL 22,159 21,705 5%
7 FRANCE 15,199 15,789 4%
8 LUXEMBOURG 26,406 14,223 3%
9 SWITZERLAND 15,105 13,615 3%
10 ARGENTINA 15,183 12,976 3%
11 CHILE 12,192 12,405 3%
12 GERMANY 21,011 10,160 2%
13 VENEZUELA 4,960 9,181 2%
14 COLOMBIA 6,231 6,654 2%
15 HUNGARY 2,642 6,331 1%
16 PERU 4,228 5,716 1%
17 AUSTRALIA 5,317 5,462 1%
18 CHINA 4,496 5,172 1%
19 ITALY 4,807 5,054 1%
20 POLAND 3,848 4,792 1%
TOTAL 447,291 438,359 100%
Many Spanish companies have a strategic position in key sectors in Latin America (ICT, energy, finance, infrastructures, etc.)
2. Market Access
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Some multinational companies establish themselves in Spai n for managing theiroperations in Latin America or in the EU.
2. Market Access
And in addition, Spain has become the European Headquarters of Latin-Americanmultinational companies doing business in Europe and MENA c ountries.
• LATIBEX: the single international market for Latin American securities regulated by the Spanish Stock Market.
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Spain is the nearest European market for doing bu siness with North- African and Mediterranean countries:
2. Market Access
•4 Agreements to Avoid Double Taxation : Morocco, Algeria, Tunisia, Egypt.
•5 Agreements for Protection And Promotion of Reciprocal Inv estmentsMorocco, Algeria, Tunisia, Libya, Egypt.
• Euro-Mediterranean Association Agreements with Egypt, Israel, Jordan, Lebanon, Morocco, Tunisia and Algeria for the gradual liberalization of trade in the Mediterranean area.
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�Euro-Mediterranean Association Agreements
�Agreements for Protection and Promotion of Reciprocal Investments
�Agreements to Avoid Double Taxation
Key Role of the Spanish Canary Islands Special Zone (ZEC) as a commercial andlogistic hub with Africa
� Geostrategical location: In the Southernmostborder of the European Union (EU)
� Strong historical and commercial ties with Africaand America
� Authorised by the European Commission in
2. Market Access
� Authorised by the European Commission inJanuary 2000
� Tax advantages for ZEC entities.
� Europe’s most advantageous tax regime (4% corporate tax rate).
� Excellent communications and services infrastructure.
� Interesting tricontinental logistic platform to Africa, Latin Americaand Europe
www.zec.org
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2. Market Access
Top ranking destination cities by investment projec tsGlobal Location Trends. IBM Global Business Services 2012
Source: Global Location Trends. IBM Global Business Services. 2012. (Projects of less than 10 jobs were not included23
�The Spanish economy is undergoing a significant adjustment and is in process ofcorrecting accumulated imbalances
3. Economic policy and structural reforms
.
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Competitive Labour Costs Labour market reform.
Public Sector Reform Fiscal consolidation at all levels of Administratio n
Provisioning system redressed and restructuring
3. Economic policy and structural reforms
Reforms for Competitiveness
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Domestic and International Market Access
Resident and Work Permits
Investment Incentives Economic Regional Incentives, R&D and Funding mechanisms.
Ensuring Market unity regulation at national and E.U. level.
Law on visa and work permits and flexible application to foreign investors.
Provisioning system redressed and restructuring process completed.
Financial System Reform
Public Sector Reform: Fiscal Consolidation at all levels of Administration
� Strengthening the structural fiscal framework:
� Constitutional Reform pioneered adoption of the Fiscal Compact.
� Budgetary Stability Law provides for further fiscal discipline and far‐reaching monitoring andenforcement tools.
� Independent Fiscal Authority.
� Measures to increase income and reduce expenditure at all levels, with the firm aim of achievingthe deficit goal agreed with the EU (Pension System Reform, Reform of the Public Administrations).
� Proposal for Fiscal Reform expected in early 2014 to produce effects as from 2015.
3. Economic policy and structural reforms
27
� Proposal for Fiscal Reform expected in early 2014 to produce effects as from 2015.
� Structural Primary Balance Surplus in 2013 (1.13% GDP)
Source: Ministerio de Hacienda y Administraciones P úblicas
Adjustment and recapitalization of the financial system
� In the Spanish Financial System, Entities could be divided in two groups.� The core of the financial system is mainly composed of the larges t and internationalized
Spanish Banks with an outstanding performance during the financial crisis.
� The local saving banks – Cajas de Ahorros- has shown structural vulnerabilities and the highestexposure to real estate. The Government has undertaken a restructuring process.
� In the last two years the provisioning system has been redressed and therestructuring process has been completed at the end of 2013.� Transparent and independent evaluation of the IMF and external risk evaluation of the whole asset
portfolio. 70% of the Spanish financial sector is sound and doesn’t require additional capital.
� The clean-up of undercapitalized banks has required an injection of €41,3 bn. of public funds (less 4%
3. Economic policy and structural reforms
28
� The clean-up of undercapitalized banks has required an injection of €41,3 bn. of public funds (less 4%of GDP).
� Segregation of the troubled assets of banks that need public support for their recapitalization (volumeestimated in €50,5 bn.) and transfer to an asset management company (SAREB) with majority of privatecapital (55%).
� Increase in provisions and capital buffers on real-state exposure.
� The total number of entities in the financial sector , excluding credit cooperatives andforeign branches, has decreased from 50 in 2009 to 12 nowadays.
� The privatization process was lunched in 2014 with Banco Novagalicia, Catalunya Bancand Bankia.
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Labour Market Reform:� Fostering labor flexibility and productivity at company level.
� Firm-Level wage bargaining prevails over national, regional or sector collectiveagreements.
� Collective Dismissals without administrative authorization are allowed for firms postingfalling profits for three or more consecutive quarters and elimination of procedural wages.
� Convergence and reduction of dismissal costs in line with EU(27) average.
� Fair dismissal: severance pay of 20 days per year, up to 12 months
� Unfair dismissal: severance pay of 33 days per year, up to 24 months. It means areduction of 26.6% in the paying severance
3. Economic policy and structural reforms
reduction of 26.6% in the paying severance
� Simplification and clarification of the regime of individual and collective dismissals due toeconomic circumstances relate to sales, revenues trends .
� Creation of a new permanent contract directed at SMEs
� Incentives and tax relief for job creation: 100€ Flat rate fo r employers’ contributionsfor common contingences to the Social Security when the worker is hired by a full time andpermanent contract. This flat rate applies during two years.
Recent trends in the labor market� The labor market is adapting rapidly, spurred by recent legislative initiatives: more
part‐time jobs & lower percentage of employees with temporary contracts, as well asdecelerating nominal and real wages
� Sharp reduction in Unit Labor Costs as a continuation of decreasing wages in somesectors and sharp increase in labor productivity 29
Measures to foster growth, competitiveness and entr epreneurship
� Law of Guarantee of Market Unity: eliminates the fragmentation of the national market,and enables a convergent nationwide product/service regulation across all regions
� Liberalization of the retail sector. No restriction on commercial opening hours in areas ofcommercial attractiveness; increase of the number of opening days.
� Liberalization of professional services . New Law of Professional Services
� Plan on Fostering entrepreneurship and business environment : measures to supportentrepreneurs, SMEs and self‐employed workers.
� Significant reduction of the red tape to start a business.
� The authorization of visa and residence permits will be made quicker and easier on grounds of
3. Economic policy and structural reforms
30
‐
� The authorization of visa and residence permits will be made quicker and easier on grounds ofeconomic interest
� Internationalization agency . Centralization of all public export promotion instruments.
� Set-up of a Commissioner for the Spain Brand , in order to strengthen our country’sreputation abroad and promote the visibility of our companies.
� Developing science and innovation. Creation of a State Agency for Research.
� National Commission of Markets and Competition : incorporates all sector regulatorybodies and the National Commission of Competition .
� Strengthening of the Tourism Sector: A comprehensive National Tourism Plan (PNIT) forthe period 2012-2016 has been approved.
� Further liberalization of the Energy, Telecommunications and Transportation sector.
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3. Economic policy and structural reforms
New specific framework for qualified immigration an d investors
VISA AND AUTHORIZATION CONCESSIONS FOR
Investors
Entrepreneurs
Highly qualified professionals
Scientists and researchers
Intra-corporate transferred employees
It is based on an agile and specialized system for visa and authorization concessions.
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THE PROCEDURES
10 days for visas and 20 days for authorizations
A single authorization for living and working in Spain
Valid for the whole of Spain
The family will be able to apply at the same time
GENERAL REQUIREMENTS
Not being in an illegal situation in Spain
Being 18 years old or older
Not having criminal records
Public or private health insurance in Spain
Enough economic resources .
Freedom to live in Spain : Granted residence and work permits authorization
Source: http://extranjeros.empleo.gob.es/es/UnidadGrandesEmpresas/folletos/index.html
The first results
� For the first time in 14 years, the Spanish economy needs no external financing. The current accountand capital deficit in 2012 (-4930,2 billion) has reverted to a surplus in 2013 (14,73 billion €). (SourceBank of Spain).
� In 2013 nominal unit labor costs declined by 7.6% since the peak in 2009 and are at similar levelsthan in 2007. Productivity has steadily increased since 2008 due to the shift towards tradable goodsand services.
� The weight of exports of services and goods in GDP has increased from 23.9% in 2009 to 34.1% by2013-Q4. In 2013, exports of goods rose by 5.2% (3.8% in 2012, provisional data) and reached theunprecedented amount of 234,239.8 million euro (since records began in 1971).
� The ongoing geographic diversification of the Spanish exports is one of the main reasons behind the
3. Economic policy and structural reforms
32
� The ongoing geographic diversification of the Spanish exports is one of the main reasons behind theincrease of sales abroad. In 2013 our exports to non-EU countries kept the upward trend of the lastfew years. Exports to Africa went up by 8.4%, to Latin America by 6.4% and to Asia by 10.3%.
� Non-energy surplus in 2013 amounted to 25,042.2 million euro, almost doubling the record in 2012(14,746 million euro)
� The trade surplus with the EU has increased 38.6% in 2013 standing at €17,69 billion..
� Productive foreign investment received by Spain has increased 8.8% in 2013.
� The differential of the 10-year bond compared with the German bond has gone from over 600 basispoints in August 2012 to below 150 basis points.
� Spain has emerged from a two-year recession in the third quarter of 2013. The Gross DomesticProduct (GDP) generated by the Spanish economy registered a variation of 0.4% in the first quarter2014, as compared to the previous quarter. Economic forecasts (including official forecasts andthose of international organizations like IMF and private analysts) are being revised up.
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For more information about macroeconomic situation and economic policy visit:
www.tesoro.es
and
www.thespanisheconomy.com
33
4. Business climateo Infrastructure and Technologyo Incentives and taxeso Incentives and taxeso Human capital: Productivity, Skilled Labor
Force and Competitive Costso Quality of life: Expat setting up
34
250 airlines have scheduled flights, operating out of the country’s 47 airports , beingMadrid and Barcelona the main hubs.
Airport Network
4. Business climate: Infrastructure & Technology
Country Passengers on board
United Kingdom 203,509,424Germany 180,255,063
Spain 160,385,889France 136,224,969
Italy 117,363,422
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Source: Eurostat: Last data available 2012
Italy 117,363,422Netherlands 55,946,383Switzerland 43,361,771
Norway 35,197,072Greece 32,080,811Sweden 30,556,434Portugal 27,926,447Denmark 26,660,166Belgium 26,176,243Austria 26,082,777Ireland 23,627,684Poland 21,871,076Finland 16,514,915
Czech Republic 11,927,281
Spain is the 2nd largest worldwide (1st in Europe) in High-Speed Network and the European leader withalmost 2,000 km in service, traveling at an average commercial speed of 222 km/h, higher than that of Japan(218 km/h) and France (216 km/h). And total railway network of 13,500 km.According to The Global Competitiveness Report (World Economic Forum), Spain has one of the best indixes
of Quality of railroad infrastructure in the world, and subway system in major cities.
Railway Network
4. Business climate: Infrastructure & Technology
High Speed Lines in the World (Kilometers)
0 2000 4000 6000 8000
China
37
Source: International Union of Railways. Data Referred July 2013
China
Japan
Spain
France
Germany
Italy
Turkey
South Korea
USA
Taiwan
Belgium
Netherlands
UK
Switzerland
Spain is the 1st largest EU highway network with 14,701 km. According to The GlobalCompetitiveness Report (World Economic Forum), Spain has one of the best indixes ofQuality of roads in the world.
Road Network
4. Business climate: Infrastructure & Technology
Length of Motorways (Kilometers 2012)
Portugal
United Kingdom
Germany
Spain
38Source: Eurostat 2014. Last data available.
0 5000 10000 15000 20000
Estonia
Cyprus
Lithuania
Romania
Norway
Slovakia
Bulgaria
Slovenia
Finland
Poland
Croatia
Austria
Portugal
4. Business climate: Infrastructure
Main Port FacilitiesExcellent maritime connections, with 46 state-own ports on both the Atlantic and theMediterranean coasts, with 3 ports among the Top-15 ports of containers in Europe(Valencia, Algeciras and Barcelona). According to The Global Competitiveness Report(World Economic Forum), Spain has one of the best indixes of Quality of portinfrastructures in the world.
Port Country 2012Rotterdam NL 10.939,0 Hamburg DE 8.891,0 Antwerpen BE 8.174,0 Bremerhaven DE 6.111,0
Container traffic for European ports (in TEU)
39
Source: European Sea Ports Organisation. Ranking based on TEU (total number of actual twenty-foot equivalent units) of 2012
Bremerhaven DE 6.111,0 Valencia ES 4.469,8 Algeciras ES 4.114,2 Gioia Tauro IT 3.725,0 Felixstowe UK 3.368,0 Piraeus EL 2.815,0 Le Havre FR 2.115,0 Barcelona ES 1.756,4 Genova IT 1.578,0 Southampton UK 1.489,0 Las Palmas ES 1.207,9 La Spezia IT 1.181,0 Marseille FR 1.155,0 Gdansk PL 933,0 Zeebrugge BE 930,0 Göteborg SE 922,0
More than 80 Technology Parks
The main sectors of the companies located in the Parks
4. Business climate: Infrastructure & Technology
ICT Engineering/Consultancy
Medicine/Health Industrial
Agriculture/Biotechnology Energy/Environment
Technology centres/R&D Training/Human Resources
Aeronautics/Automotive Electronics
Business Centres Others
Barcelona
7 6
Cantabria
2
León, Burgos y Valladolid
1
Valladolid1Lérida
1
Gerona
1
Asturias 2
Álava
1
Guipúzcoa
2 1
Bizcaya
1
Huesca
1
Zaragoza
1
Pontevedra
1 Orense
1La Rioja
1
66 parks in the Association of Science and Technology Parks of Spain, hosting 6,286
companies
40Source: Association of Science and Technology Parks of Spain 2013
23%
15%
6%
5%
5%4%4%4%
3%2%
1%
28%2 2
2
Madrid
Sevilla
Huelva
1
Córdoba
2
Cádiz
2 1
Jaén 1
Almería
1Granada
1 1
Murcia
2
Alicante2
Barcelona
Valencia2
Castellón1
Valladolid
Teruel
1
1
Palma de Mallorca
1
Gran Canaria
1
Málaga1 2
1
Fuerteventura
1
Tenerife
1
Zaragoza
Badajoz
1
Salamanca
1 Guadalajara
1
Parks at full performance
Parks in development
70
80
90
100
Broadband penetration in Business(% of companies with broadband access)
80
100Computer
Local Area NetworkInternet
ICT Infrastructures in Spanish Businesses
Whatever the company size, Spain leads the field in technologically enabled companies
Technology Adoption by Companies
4. Business climate: Infrastructure & Technology
41Source: Eurostat – Community Survey on ICT usage in enterprises, 2011 (Data 2010)
0
10
20
30
40
50
60
ES
MT
FR
UK
FN
SE
GE
BG NL IT PT
EU
-27
0
20
40
60
Wireless LAN
Broadband
Mobile Phones
Other Technologies
Total 10 to 49 50 to 249 250 or more
Source: ONTSI, based on INE 201141
60%
70%
80%
90%
100%
15.000.000
17.500.000
20.000.000
22.500.000
25.000.000
Lin
es/1
00 in
hab
itan
ts
Bro
db
an
d L
ines
Broadband Lines and Penetration Rate in the EU27 , lines/100 inhabitants
Broadband: European Comparison
4. Business climate: Infrastructure & Technology
42
24%
18%
29%
25%
17%
21%
11%
18%20%
13%16%
31%
17%17%
21%
37%
28%31%
13%
36%
20%19%
28%28%28%
0%
10%
20%
30%
40%
50%
0
2.500.000
5.000.000
7.500.000
10.000.000
12.500.000
MT CY LU EE LV SI SK LT IE EL HU FI CZ PT AT DK BE SE PL NL ES IT FR UK DE
Lin
es/1
00 in
hab
itan
ts
Bro
db
an
d L
ines
Source: XIV Implementation Report, European Commission, 201042
4. Business climate: Incentives & taxes
Main incentives for productive investment
Aid Intensity
European Union Incentives Scheme for Large Companies in S pain
Grants from Ministry of Financial and Public Administration
44
There are other regional and local incentives available in all Autonomous Communities
44
Additional Increase in Incentives from10% to 20% for SMEs
Spain has got many Institutions that promote incentives in d ifferent calls along the year
R&D&i:
•The Centre for Industrial Technological Development (CDTI ) has got a wide range of grants and loans atcompetitive low interest rate for technological projects.•The the State Secretariat for Innovation in the Ministry of Economy and Competitiveness (MINECO) alsooffers support with grants and loans for technological projects developed by companies and public organisms•INVEST IN SPAIN/ICEX has developed a programmed for supporting foreign companies up to € 200,000 forinvestments with a high degree of R&D in competitive tender•The National Innovation Company (ENISA) finances SMEs up to €1.5 million with participative loans at avery competitive interest rate and where no-guarantee is required.•The Public organization RED.ES promotes the IT activities of technological companies and start-ups financinginvestments in infrastructures, equipments and so on.
4. Business climate: Incentives & taxes
investments in infrastructures, equipments and so on.
Investments:•The Official Credit Institute (ICO) supports the creation/investment carried out by companies andentrepreneurs with loans/ leasing at a low rate•The Ministry of Industry, Energy and Tourism (MINETUR) and The Ministry of Economy andCompetitiveness (MINECO) support investments in equipment and infrastructures with grants and loans forlarge and SMEs companies•The Institute for Energy Diversification and Saving (IDAE) participates directly in the projects with loans ata low interest rate
Human Resources:
•The Ministry of Industry, Energy and Tourism (MINETUR) and The Ministry of Economy andCompetitiveness (MINECO) support investments in human resources, training and hiring, personnel withgrants and loans 45
Taxes: fiscal incentives for R&D
1. Favorable fiscal system for foreign investors and R+D activities: The 2nd most favorable fiscal incentives for R&D among OECD countries.
0,1
0,2
0,2
0,3
0,3
0,4
0,4
0,5
Large firms
0,425 …
4. Business climate: Incentives & taxes
2. In addition, the Spanish CIT law introduced a patent box type of incentive. Under thisregime 60% of revenues arising from the letting of the right to use certain qualifyingintellectual property (IP) rights are tax-exempt.
-0,1
0,0
0,1
0,1
Note: Tax subsidies are calculated as 1 minus the B index. For example, in Spain, 1 unit of R&D expenditure by large firms results in 0.349 unit of tax relief.Source: “Science, Technology and Industry, Outlook”. OCDE, 2012.
46
Incentives for hiring people
4. Business climate: Incentives & taxes
Permanent Contract Incentives: Reduction in the emp loyer's social security contribution
Company Size Monthly Amount (€) Term
New contract ( up to 31/12/2014) All Flat-rate for common contingences:100€ 2 years
National Youth Guarantee System All 300 € 6 months
Training Contracts Incentives: Reduction in the emp loyer's social security contribution
Company Size Annual Amount (€) Term
New contract Less than 250 employees 100%Throughout the term of the contract
Employee<30 years More than 250 employees 75%
Training activities All Depends on the type of the training: Maximum: 4,160€ 3 years
Conversion of Training, Apprenticeships Contracts i nto Permanent Contracts
All
1,800 € yearly for women
3 years1,500 € yearly for men
Less than 250 employees 100% for common contigences
Source: Ministry of Employment and Social Security
47
Partial -Time contracts linked with training activities Less than 250 employees 100% for common contigences
1 year + 1 year plusMore than 250 employees 75% for common contigences
Hiring Incentives:Reduction in the employer's socia l security contribution
Company Size Annual Amount (€) Term
Research staffAll 40% for common contingences Throughout the term of the contract
"First young job" contractAll
700 €/yearly for women 500 €/yearly for men
3 yearsEmployee<30 years
Apprenticeship contracts for first jobs
All100% for common contingences when the companies hire
beneficiaries of the National Youth Guarantee SystemThroughout the term of the contract
Employee<30 years
Companies with less than 50 workers
Less than 50 employees 3 yearshiring unemployed
16>Employee<30 Average of 1,200 €
Employee>45 years Average of 1,400 €
Companies with up to 9 workers hiring unemployed Up to 9 employees 100% for common contigences 1 year
Employee<30 years
Taxes: moderate tax burden
The comparative analysis shows that Spain is a country with a relatively moderatetax burden . (32.4% GDP)
Countries UE. Tax Revenues (Including Social Security Contributions ) as a percentageof GDP
4. Business climate: Incentives & taxes
60,0
Source: Eurostat 2012
0,0
10,0
20,0
30,0
40,0
50,0
48
4. Business climate: Incentives & taxes
Taxes: moderate tax burden
1. A favourable tax rate on corporate income (30% and 25% for SMEs), below USA andOECD average
2. An attractive allowance and deduction system in corporate tax (19.4% effective rate).
3. The tax system for foreign workers: fixed rate of 24.75% (up to maximum of 600,000 €).
Total Tax Rate of a Company in Europe (Including Corporate, Labor and Other Taxes)
0
10
20
30
40
50
60
70
80
Lu
xe
mb
ou
rg
Cy
pru
s
Ire
lan
d
De
nm
ark
Bu
lga
ria
Sw
itze
rla
nd
Ice
lan
d
Slo
ve
nia
Un
ite
d K
ing
do
m
La
tvia
Sp
ain
Ne
the
rla
nd
s
Fin
lan
d
No
rwa
y
Ma
lta
Po
rtu
ga
l
EU
& E
FT
A A
ve
rag
e
Lit
hu
an
ia
Po
lan
d
Ro
ma
nia
Gre
ec
e
Ge
rma
ny
Slo
va
k R
ep
ub
lic
Cze
ch
Re
pu
bli
c
Hu
ng
ary
Sw
ed
en
Au
stri
a
Be
lgiu
m
Fra
nc
e
Est
on
ia
Ita
ly
Source: Paying taxes 2013 (PwC & World Bank)
49
Taxes: ETVEs1. Foreign Securities Holding Companies (in Spanish, ETVE) is a Special Tax Regime
applicable to Holding companies.
a) No taxation on paid-in dividends.
b) No taxation on paid-in capital gains.
c) No taxation on paid-out dividends/gains.
d) Stable and reliable regime.
e) Wide tax treaty network (85 treaties to avoid double taxation).
2. The attractiveness of ETVEs goes beyond the pure Tax Holding Regime. The ETVEregime is an opportunity for international investors to channel their outbound
4. Business climate: Incentives & taxes
regime is an opportunity for international investors to channel their outboundinvestments (in Europe, LATAM and other countries) through Spanish HoldCos.
0,00
5.000.000,00
10.000.000,00
15.000.000,00
20.000.000,00
25.000.000,00
30.000.000,00
35.000.000,00
40.000.000,00
Main Investors in Spanish ETVEs
50
4. Business climate
o Human capital : Productivity, Skilled Laboro Human capital : Productivity, Skilled LaborForce and Competitive Costs.
o Decreasing Unit Labor Costs.
51
Labor Costs
Labor cost in Spain are below the EU-27 average
4. Business climate: Human Capital:productivity and skilled labor cost
43.041.2
39.8
35.635.032.531.731.731.3
28.027.6
23.7
30
35
40
45
50
Cost per hour Private Sector 2013€/hour
52
23.7
21.1 20.9
15.914.314.1
12.611.510.4 9.3 8.8 7.8 7.4 6.5 6.24.7 3.7
0
5
10
15
20
25
Source: Destatis 2014 (Federal Statistical Office Germany)
Labor Costs
Unit Labor Costs more competitive than main European economies
4. Business climate: Human Capital:productivity and skilled labor cost
120,0
125,0
130,0
UNIT LABOR COST EVOLUTION, 2007-2013Index, 2005=100
53
95,0
100,0
105,0
110,0
115,0
2007 2008 2009 2010 2011 2012 2013Source: Eurostat. October 2014
Spain
Germany
France
Italy
United Kingdom
Compensation of employees
Spain has the lower compensation of employees* in comparison with main Europeaneconomies
4. Business climate: Human Capital:productivity and skilled labor cost
250.000
300.000
350.000
400.000
COMPENSATION OF EMPLOYEESMillions € (current prices)
54
0
50.000
100.000
150.000
200.000
Source: Eurostat . October 2014. Data: Millions € (at current prices)*Compensation of employees consists of wages and salaries, and of employers' social contributions
Germany
Spain
France
Italy
United Kingdom
Salaries and wages in Spain
Average salaries by department for different sectors
4. Business climate: Human Capital:productivity and skilled labor cost
30
40
50
60
70
80
90
100
2013Thousand €
55
0
10
20
Source: Infoempleo and Adecco Report 2013: Job offers and demands in SpainNote: Gross Salary
Executive Director/National/Chief Division Director
Manager/Head of Department
Officer/Programmer/Technician
Labor Productivity
Spanish Labor Productivity is better than EU-27 Labor Productivity
4. Business climate: Human Capital:productivity and skilled labor cost
2,0
3,0
4,0
LABOR PRODUCTIVITY% change on previous period
56
-4,0
-3,0
-2,0
-1,0
0,0
1,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Eurostat. October 2014. Data: % change on previous period
EU 27
Spain
Social Security Costs
Employer contribution rate : 100€+7.3% applied to a threshold, in case of permanentcontract during 2 years.
Incentives for certain hiring and training contract applied to reduce employer S. SecurityContribution.
4. Business climate: Human Capital:productivity and skilled labor cost
350.08 €300 €
400 €Contribution to S. Security
Group 1 Employer S. Security Contributionfor permanent contract during 2 years
If the monthly salary is higher than the maximum contribution base, the Social Security rate applies to this maximum contribution base, being the effective rate lower .
Source: Ministry of Employment and Social Security
57
176.8 €100 €+7.3%
100 €
200 €
300 €
<1,051.4 € 1,051.5 € 3,596.99 € >3,597 €
Contribution to S. Security
Monthly Salary
Employer’s Social Security contribution before and after Royal Legislative Decree 3/2014
If a company hires a worker with a salary of 30,000€, after RD 3/2014, the total employercontribution to Social Security is 2,782.5€ per year. That means a reduction of 63% incomparison with the same employment contract before RD 3/2014 (9,270€).
4. Business climate: Human Capital:productivity and skilled labor cost
Total Employer's Contribution to Social
Security before RD 3/2014
Total Employer's Contribution to Social
Security after RD 3/2014
Group 1 Group 1
Annual ( €) Monthly ( €) Annual ( €) Monthly ( €)
58
Annual ( €) Monthly ( €) Annual ( €) Monthly ( €)
Salary 30,000.00 2,500.00 Salary 30,000.00 2,500.00General Contingencies 7,080.00 590.00 General Contingencies 1,200.00 100.00Unemployment 1,650.00 137.50 Unemployment 1,650.00 137.50Accidents 300.00 25.00 Accidents 300.00 25.00Salary Guarantee Fund 60.00 5.00 Salary Guarantee Fund 60.00 5.00Professional Training 180.00 15.00 Professional Training 180.00 15.00Total Employer's Contribution to S.S. 9,270.00 772.50
Total Employer's Contribution to S.S. 3,390.00 282.50
Total Cost 39,270.00 3,272.50 Total Cost 33,390.00 2,782.50% 23.61 % 10.15
Business Schools
IE Business School holds the No. 1 position in the 2013 Financial Times ranking of European business schools
4. Business climate: Human Capital:productivity and skilled labor cost
2013 Rank
3 year average rank
School name Country
1 1 HEC Paris France
1 3 IE Business School Spain
3 3 London Business School UK
3 5 Esade Business School Spain
5 4 Insead France/Singapore
6 5 Iese Business School Spain
7 9 University of St Gallen Switzerland
Source: Financial Times 201359
7 9 University of St Gallen Switzerland
8 9 SDA Bocconi Italy
9 7 IMD Switzerland
10 9Rotterdam School of Management, Erasmus University
Netherlands
11 11 ESCP EuropeFrance/UK/Germany/Spain/Italy
12 11 University of Oxford: Saïd UK
13 16 EMLyon Business School France
14 14 Essec Business School France/Singapore
15 15 Vlerick Business School Belgium
16 16 Imperial College Business School UK
17 25 Edhec Business School France
18 16 City University: Cass UK / UAE
19 17 Cranfield School of Management UK
20 23 Tilburg University, TiasNimbas Netherlands
Business Schools
Spanish Business Schools have three MBA programs among the top 25 in the world
4. Business climate: Human Capital:productivity and skilled labor cost
Global MBA ranking 20142014 Rank School name Country
1 Harvard Business School USA2 Stanford Graduate School of Business USA3 London Business School UK4 University of Pennsylvania: Wharton USA5 Columbia Business School USA6 Insead France/Singapore7 Iese Business School Spain8 MIT:Sloan USA9 University of Chicago: Booth USA
Source: Financial Times 2014
60
9 University of Chicago: Booth USA10 Yale School of Management USA11 University of California at Berkeley: Haas USA
12 IMD Switzerland13 IE Business School Spain14 Hong Kong UST Business School China15 Northwesterm University: Kellog USA16 University of Cambridge: Judge UK17 Duke University: Fuqua USA17 New York University: Stern USA17 Ceibs China20 Dartmouth College:Tuck USA21 HEC Paris France22 Esade Business School Spain
Highly skilled labor force
Human Resources in Science & Technology with tertiary education, 2012
Spain ranks 4th in Europe in number of persons with a scientific/technical tertiary education , just behind Germany, United Kingdom and France
4. Business climate: Human Capital:productivity and skilled labor cost
14.000
16.000
18.000
20.000
61
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
Source: Eurostat. November 2013. Data: Thousands
4. Business climate: Immigration
International mobility - New legal framework
VISA AND AUTHORIZATION CONCESSIONS FOR
Investors
Entrepreneurs
Highly qualified professionals
Scientists and researchers
Intra-corporate transferred employees
Real Estate 500.000 €
SpanishCompanies
1 mill. €
Bank Deposit 1 mill. €
Public Debt 2 mill. €
It is based on an agile and specialized system for visa and authorization concessions.
63
THE PROCEDURES
10 days for visas and 20 days for authorizations
A single authorization for living and working in Spain
Valid for the whole of Spain
The family will be able to apply at the same time
GENERAL REQUIREMENTS
Not being in an illegal situation in Spain
Being 18 years old or older
Not having criminal records
Public or private health insurance in Spain
Enough economic resources .
Freedom to live in Spain: Granted residence and work permits authorization
Benefits of the Schengen visa: freedom of movement within the member states
Source: http://prie.comercio.es/en/pages/programa-de-residencia-para-inversores-y-emprendedores-(prie).aspx
Foreign Schools
There are currently 180 international schools in Spain, including 116 English spoken Schools, 24 French Schools and 19 German Schools, among others
4. Business climate: Quality of life
100
80
100
120
Foreign Schools 2014
65
2419 16
5 5 4 2 1 1 1 1 10
20
40
60
Source: Ministry of Education, Culture and Sports, 2014
� Spain is the 1 st country in Europe in terms of quality of life for expats and 3rd worldwide
� With large communities of many different nationalities, Spain is known for its highly cosmopolitan character. On average, 12.2% of the Spanish residents are foreign-born, a figure that rises to 16-17% in regions like Madrid or Catalonia
� One of the largest number of International Schools in Europe
4. Business climate: Quality of life
� Outstanding & modern health system with very high standards
� Favorable fiscal regime for expatriates
� Law enforcement: Assurance & stability in business and social life
� Excellent climate, first-class gastronomy, wide range of cultural and leisure activities
66
4. Business climate: Quality of life
Expat Experience. League table of selected OECD countries
Country Overall Experience Overall quality of life Ove rall integration Overall setting up
Spain 1 1 1 4
Switzerland 2 2 11 9
Germany 3 3 5 7
Australia 4 7 4 1
France 5 5 3 8
Source: Own elaboration based on The Expat Explorer Survey 2012.(HSBC)
Canada 6 9 7 2
New Zeland 7 8 13 3
Belgium 8 6 9 10
United Kingdom 9 12 2 5
Netherlands 10 4 12 12
USA 11 11 8 6
Italy 12 10 6 11
Japan 13 13 10 13
67
5. Business opportunities
o ICT (Information and Communication Technologies)
Biotechnology, Pharmacy and Life Scienceso Biotechnology, Pharmacy and Life Sciences
o Aerospace
o Automotive
o Logistics and Transport
o Environment and Water
68
� Spain is the fifth ICT market by volume in Europe: € 91,970 Million.
� The gross added value at market prices represents almost the 5.2% of GDP in 2012.
� There are near 25,000 ICT companies, including digital content, operating in Spain.The sector is currently[1] employing almost 400,000 workers.
5. Business opportunities: ICT
Information and Communication Technologies Industry in Spain
Spain ICT Sector Turnover 2012 (€ million)
70
Spain ICT Sector Turnover 2012 (€ million)
9.5%
46.2%
30.9%
10.3%
3.1% Telecommunications
Information Technologies
Production
Digital Content
€€ 91.97 91.97 BillionBillion
Commerce
Source [1] : ONTSI (Spanish Observatory for the Telecommunications and Information Society), 2014. Data 2012
5. Business opportunities: ICT
Spanish companies are present and recognized in major
international markets:
71
Spain is a leader in advanced technologies :
� Spanish software for landing is worldwide renowned
and used
� Major events /Complex, distributed international delivery
� High-Tech and Defense Industry
� Telecommunications , Utilities , Energy, Banking …
Hardware VendorsSoftware Vendors
5. Business opportunities: ICT
Telecom equipment vendors Service Providers
Leading ICT multinationals are already successfully located in Spain, taking advantage ofSpain’s benefits:
ICT Services and Consulting Companies
72
Telecom equipment vendors Service Providers
� IBM was set up in Spain in 1926. Today, the Spanish subsidiaries have 7,200 employees.
� IBM Spain coordinates the activities of IBM in Portugal, Greece e Israel.
� Projects developed in Spain:
• Centre of excellence in Barcelona to develop solutions for financial entities healthsector.
• INSA, an IBM branch, has set up two centres (Caceres and Salamanca) for softwaredevelopment s to be applied worldwide.
5. Business opportunities: ICT
Success stories
development s to be applied worldwide.
• MareNostrum , supercomputer installed in the Barcelona Supercomputing Centre incollaboration with the University of Catalonia.
• Technology Expert Council (TEC), which integrates the best talents of IBM in Spain toenhance the leadership of the company and develop its technical knowledge.
� In the beginning, HP was set up in Spain as a manufacture centre.
� Nowadays, it has changed its strategy and has set up worldwide recognized support andR&D centers.
73
Success stories
Proof of concept for the global market
5. Business opportunities: Biotechnology, Pharmacy and Life Sciences
� Novartis announced in 2013 an 60M€ investment to expands its facilities in Cataluña for the manufacturing of the entire production line of inhalers. The expansion will create 70 jobs.
� Lilly has in Madrid its research centre for medicinal chemistry, one of the biggest in the world investing 20M € and is planning an increase in their production and R+D activities.
� Bayer has concentrated its global aspirin production in Asturias investing 6M€.
� Celgene opened its first research centre outside the United States in Seville. The Celgene Institute of
Source: press articles 75
� Celgene opened its first research centre outside the United States in Seville. The Celgene Institute of Translational Research Europe (CITRE) plans to focus on advanced therapies and regenerative medicine investing 60M€.
� Genzyme has setting up a sales office in Madrid and has a warehouse for domestic distribution.
� GSK has in Madrid its research centre for tropical diseases, Molecular Discovery Research and Drug Discovery activities.
� Merck has concentrated its global growth-hormone production in Spain.
� Pfizer has invested €12m in its European Biometric Centre, which has support functions for the rest of Europe and USA.
Biotechnology: Overview
5. Business opportunities: Biotechnology, Pharmacy and Life Sciences
Growing number of biocompanies and dynamic creation of
Solid macroeconomic impact
� Directly and indirectly, biotech sector accounts for 7.15% of Spain’s GDP .
� This data is close to traditional sectors as tourism and automotive.
� Consolidation of Spanish biotech sector
Turnover (M€) biotech sector 2008 -2011
Strong SPIN-OUTs culture
� Every year public institutions create between 10 and 14 new companies .
Source: ASEBIO 2012 Report76
Growing number of biocompanies and dynamic creation of jobs
� More than 3,000 companies involved in biotech activities(+76.4%) and 660 strictly biotech (+7%).
� 202,250 employees (+23.7%) and 8,800 R+D activitiesdedicated (+6.6%).
R+D Expenses (M€) biotech sector 2008-2011
Turnover (M€) biotech sector 2008 -2011
Distribution of biotechnology companies and biotech users by region
5. Business opportunities: Biotechnology, Pharmacy and Life Sciences
7.63%7.63%7.63%7.63%
13.05%13.05%13.05%13.05%
15.49%15.49%15.49%15.49% 18.54%18.54%18.54%18.54%
9.04%9.04%9.04%9.04%
� After Madrid and Catalonia, Andalucía is theautonomous region with the higher number of strictly-biotech companies.
� Most biotech companies are located in Catalonia(18.54%), Madrid (15.49%) and Andalucía (13.05%) .Together they account for nearly the 50% of the nationaltotal in 2011.
Source: ASEBIO 2012 Report.
77Source: ASEBIO 2012 Report
Distribution by region
Pharmaceutical Sector: overview
5. Business opportunities: Biotechnology, Pharmacy and Life Sciences
� There are about 425 pharma companies in Spain, including some with no production and/or marketing activity. Near to 60% are foreign companies.
� Leading pharmaceutical/biotech multinationals are already located in Spain many of which have successfully chosen our country for the establishment of Research Excellence Centres, Produ ction or Distribution Centers.
Source: FarmaIndustria Annual Report 2012. PMFARMA website
These companies are mainly
located in Catalonia and the
Madrid autonomous
region , which both have long-
standing pharma traditions.
Important companies can also
be found in other regions such
as Navarre, Andalucia and
Galicia.
78
5. Business opportunities: Biotechnology, Pharmacy and Life Sciences
Pharmaceutical Sector: R&D spending and workforce
The pharmaceutical industry is the leader in R&D sp ending in Spain
� Pharmaceutical companies set aside near to € 1,000M. for R&D.� The sector accounts for 19% of all private R&D spending in Spain.
Outsourcing R&D
� Apart from in-house R&D, the pharma industry leads the way in outsourcing this to other companies.
Source: FarmaIndustria Annual Report 201279
Job creation in R&D
� The pharma industry has 4,683 employees working full-time on R&D.� This is 12% of all R&D employment in Spanish industry.
Biomedical researchers
� The biomedical industry created 2,153 jobs for graduate employees working exclusively on R&D.
Healthcare Technology: overview
The healthcare technology market� This sector invoiced about € 7,200M.
� It comprises more than 1,050 companies .
Job creation� The healthcare technology sector employs more than 29,000 people.
Exports are growing
5. Business opportunities: Biotechnology, Pharmacy and Life Sciences
Source: FENIN annual report 2012
Exports are growing
� The value of exports surpassed € 1,880M.
� It represents 0.94% of the total exports in Spain.
Important trade partners
� The target market is still the rest of the EU, which takes 60% of exports.
� Asia and Sudamerica are playing an increasingly important role as big importers of
Spanish technology and products.
80
� The Spanish Aeronautics Industry is the 5th in Europe in terms of turnover (€ 6.9 billion in Aeronautics in 2012) and employment (<38,000 employees).
� The Spanish space sub-sector is the 5th one at the European level, employs more than 3,300 people and had a turnover of € 737 million in year 2012.
� Half of the commercial aircraft in the world uses Spanish technology.
R&D:
5. Business opportunities: Aerospace
Aerospace Industry in Spain
� The investment in R&D activities reached 764 M€
in year 2012 (11% of the industry turnover)
Government support:
� The Spanish authorities consider the Aerospace
Industry as one of the Strategic Industrial Sectors.
� Creation of several public R&D centers focused in
the aerospace industry.
82
BOEING has developed important R&D Centers in Spain:
•First Boeing R&D center outside the USA
•Main areas: safety, ATM and environmental technologies
•April 2008: first flight of an airplane powered by hydrogen fuel cells – Ocaña(Madrid)
5. Business opportunities: Aerospace
Success stories
According to Boeing :
“The reason for choosing Spain was the outstanding role of the country in the EUand as a reference point with the Latin American countries.It also shows the relevant position that the Spanish Aerospace industry hasacquired in the last few years and the capabilities of the country in environmentaland ATM technologies”
Source: www.boeing.es
83
5. Business opportunities: Automotive
Key figures: Automotive Industry in Spain
� Spain is the 2nd largest car manufacturer in Europe and the 11 th in the world .
� Spain is the 1st manufacturer of Industrial Vehicles in Europe *
� Most of the world's biggest car manufacturers are present in Spain with 17automobile production plants .
� Nine out of ten vehicles Made in Spain are exported to over 130 countries
� Spain Automotive Parts Industry ranks 6 th in the world in terms of turnover.
85* including light commercial vehicles
5. Business opportunities: Automotive
Key figures: Automotive Industry in Spain
� Vehicle manufacturing in Spain was up 9.3% in 2013 reaching 2.163.338 units
� Automotive Industry turnover accounts for 10% of Spanish GDP.
� 300,000 people directly employed in the Industry.
� 2,000,000 jobs linked to the Sector.
� 1,9 Million vehicles exported to 130 Countries in 2013 Export value €25bn.
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Sources : ANFAC (Spanish Association of Vehicle ManufacturersSERNAUTO Automotive Parts Exporters Association ) Last data available
� Vehicle exports increased by 8.7% in 2013 to 1,879,974 units.
� Motor Industry Main exporter with 17% of total Goods Exports.
� 3- 4 Million vehicles transported every year through the territory.
� 34 Technology Centers devoted to Automotive Industry.
� €63 Million Annual average of Investment in Professional Training by Car Manufacturers.
Key figures: Foreign Direct Investment
� New Industrial Plans have been approved by the 9 Multinational brands
established in the country.
� 5 billion€ investment in course to expand production in Spanish Plants, including new
models and electric models
� Plan of the Spanish Industry to produce 1 Million extra vehicles “ 3 Million Plan”.
5. Business opportunities: Automotive
87Sources: ICEX-INVEST; Real Instituto Elcano; Ministry of Economy and Competitiveness (dataInvex)
5. Business opportunities: Automotive
News /Investment Projects
� RENAULT November 2012 Renault approves the Industrial Plan 2012-2014 for theManufacturing Plants of Pal encia (Megane), Sevilla and Valladolid (Captur andTwizzy models). 100 new jobs will be created in Sevilla’s Transmissions Plant.
� IVECO- (Fiat Group)Industrial Plan up to 2016 for the manufacturing centers of Madrid and Valladolid (HeavyVehicles). Investment of 0,5 billion€ and creation of 1.200 jobs throughout this period.
88Sources: FDI markets-Corporative Sources-ANFAC (Spanish Association of Car & Trucks manufacturers).
� FORDUS-based automotive giant Ford will expand its manufacturing complex inAlmussafes, Spain. The company will build a new 80,000 sq m plant at the site toproduce its own automotive parts and increase a 10% the production of Ford Kuga. 1,1billion€ investment has been committed through the period 2009-2013.
� MERCEDESThe company will Invest in 2013 up to 200 Millions € to adapt Vitoria Plant Facilities forthe new VITO VS20 and its Electric Version . The Industrial Plan secures jobs in theplant.
5. Business opportunities: Automotive
� PSA Peugeot-CitroënIt will create 1.000 new jobs in 2013 in the Manufacturing Facilities of Vigo for Production of Citroën C-Elysee, Electric Versions of Peugeot Partner and Citroën Berlingo and New C4 Picasso.
� NISSANAnnounces in 2013 €130 Million Investment in Barcelona’s Plant to produce a new Sedan Starting 2014, and investments of €10 Million in its components manufacturing plant of Cantabria.
89Sources: FDI markets-Corporative Sources-ANFAC (Spanish Association of Car & Trucks manufacturers).
� GMIncludes Spanish Plant of Figueruelas in its Industrial Plan for Europe that will drive up to 4 Billion Investment in 23 new OPEL models in Euro pe for the period 2013-2016.
� SEAT (VW Group)The group VOLKSWAGEN invested € 665 Million in SEAT Plant of Martorell in 2012, including €100 Million in R&D&I and €13 Million in Professional Training.Martorell is one of the most productive and flexible plants of the Group, with 377.000 units in 2012 including the New Audi Q3. In 2013 The Plant will put on market the new SEAT Leon models .
5. Business opportunities: Automotive
Automotive Industry in Spain: AUTO -PARTS
� Spanish Auto-Parts Industry ranks 6 th in the world in terms of Turnover.
� Main global suppliers of the Automotive Industry established in Spain.
� 1,000 companies belonging to 720 groups provide customized Service to Car Manufacturers
� 191,000 people directly employed in the Sector
� Turnover of €27.5 bn in 2012, 65% exported to 150 countries.
� EU, USA, Mexico, North Africa and BRIC’s top ranking destinations of Spanish Exports.
9090
Source: SERNAUTO (Spanish Association of Automotive Parts and Accesories Manufacturers). Year 2012 (last data available).
5. Business opportunities: Automotive
Automotive Industry in Spain: AUTO –PARTS. New Invest ment Projects
New Investment announcements by Auto- Parts Multinationa ls in 2013
� FAURECIAThe French multinational of Auto-Parts has chosen Valencia to set up his fifth R&D&iCenter in Spain. It will be located in the Technology Park of Paterna and will employ 200Technicians.
� MAHINDRAThe Indian giant, leader manufacturer of Components in Asia, buys a 13.5% share ofSpanish company CIE Automotive for € 96,24Million sealing an strategic alliance
91Source : SERNAUTO (Spanish Association of Auto-Parts Exporters)
Spanish company CIE Automotive for € 96,24Million sealing an strategic allianceworldwide.
� SAMVADARDHANA MOTHERSON PEGUFORMIt has announced plans to invest € 5M as a part of its € 30M expansion Plan to expandproduction capacity in its manufacturing facility in Ripollet- Spain to increase production ofsintered auto-parts at the site. The entire investment will create about 100 jobs.
� MAFLOW SPAIN AUTOMOTIVEThe Auto Parts company owned by the Polish Industrial Corporation Boryszew invested€2Million in 2013 to expand production in its Plant of Guarnizo (Cantabria-Spain).MAFLOW is one of the larger manufacturers of Air Conditioning tubes worlwide. Guarnizo’sPlant is its only manufacturer Center in Spain with 100 employees.
5. Business opportunities: Automotive
Eco-Electromobility Spanish Capabilities and Leadershi p
� Spain contributes to Eco-Electromobility as a major component designer and manufacturer and as
provider of Infrastructures and Network Intelligence.
� 74 Spanish Companies and Technology Centers have taken part in 60% of the European eco-
electromoblity Projects.
� Spanish Companies are leaders of 13 of these Projects including the 3 European projects on new
batteries : NECOBAUT, SOMABAT, GREEN LION.
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� The Spanish Technology Platform Move to Future ww.move2future.es gathers together 142 Key
innovative Companies, Research and Technology Centers.
� Spanish Scientific, Technological and Industrial capabilities on future transport are well summarized in
the document New Opportunities for the Clean Vehicle Sector in Spain. www.move2future.es
� 100 Eco electro mobility projects with Spanish Participation and 80 New Products/Services compiled
for Green Car Initiatives.
5. Business opportunities: Automotive
Eco-Electromobility/Spanish Capabilities
� RENAULT, MERCEDES -BENZ, PEUGEOT, CITROËN, FORD, NI SSAN and SEAT have
already made steps to produce electric powered vehicles in Spai n.
� AUTO-PARTS companies with plants in Spain are already working on specific
components and systems for electric and hybrid vehi cles .
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Why Spain for Automotive?
� SPAIN is a key Player in European Car Industry.
� 2nd manufacturer in the EU.
� Productive and flexible manufacturing plants.
� High Future Investment committed by Main Car manufacturers.
� Powerfull industrial supply chain and Auto Parts Industry.
5. Business opportunities: Automotive
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� Powerfull industrial supply chain and Auto Parts Industry.
� Availability of highly qualified human resources.
� High public and private investment in Professional Training.
� Leadership in European Industrial Innovation-Mobility Sector.
� Privileged Export Platform towards EU, Latin-America, North Africa.
� Open Country for Foreign Investment. Public Support for Business Development.
5. Business opportunities: Logistics and Transport
Logistics and Transport Industries in Spain
� Spanish Logistics Sector ranks among the top-20 in the world according tothe latest Logistics Performance Index of the World Bank (11 th among the EUcountries)
� Turnover € 98.0 Billion• Logistics• Road, Railway, Sea and Air Freight• Growth rate of 7% in the last 3 years
45,3%44,2%
Turnover 2012
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• Growth rate of 7% in the last 3 years• Almost 4% of the Spanish GDP
� Employment > 861,000 workers• 4.2 % of active workers in Spain• 90.8% occupancy rate
� Companies > 200,000• Structure: High market concentration• 90% SME’s• 10 big companies manage 27% of the business
Source: National Institute of Statistics, 2014. “Logistics Performance Index”, The World Bank.
1,8%8,7%
Road & Rail Freight
Sea Freight
Air Freight
Warehousing and other activities related to transport
� The Infrastructure, Transport and HousingPlan (PITVI) (2012 - 2024) states a stableand sustained investor scenario of up to0.94% of GDP during the period.
� Larger extension of kilometers of highwayin EU-27 > 14,000 km. 5.9 % Spain vs1.2% EU average, 1.4% USA or 0.6%Japan.
� 46 Seaports of which Valencia, Bahia de
5. Business opportunities: Logistics and Transport
� 46 Seaports of which Valencia, Bahia deAlgeciras y Barcelona are placed amongthe first ten European.
� The Trans-European TransportNetwork development encloses theSpanish Corridors in the Atlantic and theMediterranean Sea to foster the Logistics.
� The Mediterranean Corridor plan connectsthe Mediterranean Spanish Seaports to arail corridor which links North Africa toCentral Europe through Spain.
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Success stories
5. Business opportunities: Logistics and Transport
• DHL Spain is the key input platform throughout the DHL network to Latin Americanmarkets. Invest in Spain.
• TNT International Operations Center Madrid - Barajas (Spain) became hub for SouthAmerica in 2002. Today, shipments to and from fifteen South American countries arehandled from Barajas Hub and to its whole network.
• Total Terminal International Algeciras (TTIA) part of the South Korean Hanjin Shippinggroup builds its first container terminal semi-automatic of the Mediterranean and SouthernEurope.
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Success stories
5. Business opportunities: Logistics and Transport
� Hutchison Port Holdings , a subsidiary of Hong Kong conglomerate Hutchison
Whampoa, operates the new semi-automatic container terminal of the Prat quay in the
Port of Barcelona which represents an initial investment of 300 million Euros and aims
to be the largest terminal in Southern Europe.
� Mexico's Pemex will install its European operating base in the port of La Coruna which
implies a direct investment of $ 70 million.
� The Danish APM Terminals Algeciras will devote € 42 million investment to meet their� The Danish APM Terminals Algeciras will devote € 42 million investment to meet their
new triple E ships in the port of Bahia de Algeciras.
� Toyota Motor Europe (TME) establishes a new logistics center in Illescas from which
enhance the delivery of spare parts and accessories of the brand in Spain.
� The German Vossloh Rail Vehicules operates one of its engineering centers, a
reflection of its commitment to innovation, in Valencia, Spain.
� One of the main actors of E-commerce in Europe, Vente Privée , opens its third
logistics platform in Spain after Germany and Italy.
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� The Spanish environmental sector moves around 11 billion euro – or 3.2% of the world market, 4.8%
of the European market and 0.9% of Spanish GDP
� 2,000 companies (SMEs) employing half a million people, of whom a quarter (140,343) work in
waste treatment and management. Estimates put employment at 1 million in 2020
� R&D projects for emission reductions, river restoration and numerous other areas of environmental
concern: in 2009, the European Union’s Life+ Programme named five winners in its ‘Best waste
management projects’ category – and two of these were Spanish
5. Business opportunities: Enviroment and Water
Environmental Industry in Spain
management projects’ category – and two of these were Spanish
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Success stories
� Spain ranks third in the world and first in Europe for ISO 14001 Environmental Managementcertification with more than 16,500 awarded.
� In 2011, the EU granted 85.8 million euro to 29 Spanish projects concerned with naturepreservation, climate change, environmental policy, clean technologies and environmentalinformation and communication.
Areas that require urgent attention and offer opportunities to foreign investors include waste management,air quality and water treatment:� Waste generation: 547 kg/inhabitant in 2009� Emissions: 8.02 tonnes of CO2 equivalent /inhabitant in 2009� Water consumption: 154 litres/inhabitant/day in 2008
Public entities
SPANISH MINISTRY OF ENVIRONMENT AND AGRICULTURE
• Makes proposals
and develops the
implementation of
government policy
Private companies
EUROPEAN ENVIROMENTAL AGENCY
• Provides sound &
independent
information
• 32 member countries
5. Business opportunities: Enviroment and Water
Environmental Industry in Spain: key players
government policy
www.magrama.es
17 REGIONAL AUTHORITIES
• Definition and implementation of environmental policy
• Regional environmental authorities often called Consejerías
MUNICIPAL AUTHORITIES
• SubsidiesFinesRefuse collection, street cleaning etc
• Local environmental authorities, often called ‘concejalias’
• 32 member countries
www.eea.europa.es
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• Maximum reservoir capacity 54,388 hm3• Reserves at February 2013 37,267 hm3 (67.36%)• Domestic consumption 166 litres/inhabitant/day
UsesIrrigation 62.66 %Human supply 21.16 % Industry 17.17 %
5. Business opportunities: Enviroment and Water
The Water sector in Spain
WaterOrigin
Dams 85 %Underwater sources 10 % Desalination 2 %Other sources 3 %
>700 towns with >2,000 inhabitants with no wastewater treatment plant
Treatment3,500 hm³/year of treated wastewater by 1,300 WWTP500 hm³/year reused by regeneration systems
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5. Business opportunities: Enviroment and Water
Desalination
•Spain is the 1st producer of desalinated seawater in Europe and America
• Spanish companies are leaders in reverse osmosis technologies.
• Interesting cluster:
� More than 700 desalination plants in Spain according to the Ministry ofAgriculture, Food and Environment.
� International Expertise in constructing desalination plants (Befesa, Cadagua,Acciona, etc)
• R&D. Research centres actively involved in desalination:
CEDEX (Study and Experimentation Centre)Canarian Technologic InstituteProDTI, University of SevilleCENTAFoundation “Investigación e Innovación para el Desarrollo Social”
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6. ICEX-Invest in Spain
ICEX / Invest in Spain your partner in Spain
Orense 58, 3rd floor28020 Madrid SPAINT (+34) 91 503 58 00E-mail: [email protected]
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Objectives & activities
� To promote, attract and maintain foreign direct investment in Spain
Who is…
INVEST IN SPAIN is the Directorate in charge of attracting foreign directinvestment in ICEX-Spain Trade & Investment . The Secretary of State forTrade is our president ( Ministry of Economy and Competitiveness).
� Attracting new projects of foreign investment by focusing on
� To be the benchmark for foreign investors and the meeting poi ntbetween companies and institutions in the State, Regional a nd Local levelsengaged in promoting and attracting investments
� Attracting new projects of foreign investment by focusing oncountries, sectors and businesses that involve greater gro wth potential forSpain� Promoting a business climate and facilitating doing business in Spain
� Transmitting an image of Spain as an internationalized countryassociated with highly competitive human and technologica l resources
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� Personalized advisory service . Customized reports
� Information on European, National, Regional and Local grants andsubsidies applicable to investment projects
� Information on administrative procedures and advice on all stages of theinvestment process
� Specialized consultancy on legal, technical and market areas throughpartnership institutions
� Specialist publications : sector guides, tax, immigration and legal briefs ….
1.- Information and Advice
� Specialist publications : sector guides, tax, immigration and legal briefs ….
Assistance with the establishment of foreign companies in S pain:
� Finding the best location for each project throughout Spain
� Organization and co-ordination agenda : meetings and visits to of companiesand institutions throughout Spain, as well as with the regio nal and localgovernments concerned
� Identification of the strategic & technology partners for each project
2.- Support and Management
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� Working in conjunction with regional and local agencies to provide clientswith the best possible service and location
� Help in seeking incentives, public and private finance for theestablishment, development and expansion of companies set ting up inSpain
� Introductions to other companies: to help with reinvestmen tprojects, suppliers, specialist consultancy…
3- Business Development
� Partnership & management of joint investments by foreign companies andSpanish investors
Presents the collective needs & interests of foreign-owned companies to theSpanish Administration
� Opinion surveys : individual interviews, focus-groups, Analysis of the busi nessclimate. Foreign chambers of commerce, associations, etc
� Legislative and administrative proposals
� Periodical publications on topics of interest to investors
4.- Business climate
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Provides advice about the most appropriate way (quickest and leastbureaucratic) to obtain the permits for highly qualifiedemployees, technical staff, scientists, families, ...
� Advice about how to open a branch, create or acquire a company ...
Services of special interest : Immigration Departme nt
6. Invest in Spain: Investor services
� Assessment regarding transactions that involve immigrati on issuesfor foreigners without residence in Spain
� Act as the institutional contact for companies vis-à-vis all Spanishbodies with powers, such as the Spanish Embassy andConsulates, Ministry of Employment , Home Office and Region alImmigration Offices
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The Technology Fund is a special budget of € 2,300 million fro mEuropean Regional Development Fund (ERDF) created to promotebusiness R&D&I in Spain for the 2007-2013 period
� Invest in Spain takes part in this European program with a € 24 millionbudget by promoting the capture of investments with a high degree of
Services of special interest : The Technology Fund Program
6. Invest in Spain: Investor services
budget by promoting the capture of investments with a high degree ofR&D&I from foreign-owned capital companies
� Investment in facilities, equipment, human resources and t echnologycould be supported up to € 200,000 grant per company in competitivetender.
� From 2008 Invest in Spain has supported 98 projects for a totalamount of € 11 million in high added value sectors such asBiotechnology, IT, Renewable energies and Environment
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6. ICEX-Invest in Spain
ICEX / Invest in Spain your partner in Spain
Orense 58, 3rd floor28020 Madrid SPAINT (+34) 91 503 58 00E-mail: [email protected]
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