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Spain: your partner in Europe
Global Market Access from an International Economy
August 2013
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
1
Spain is the world’s 13th largest economy and the 5 th largest economy in the EU: GDP worth 1.5 trillions USD
1. Spain: a highly internationalized economy
GDP comparison of major economic regions, USD billions
Germany:3,401
EU 27: 16,584
USA:15,685
NAFTA: 18,681
Asia: 18,296
3Source: IMF, 2013. Data Referred to 2012 3
UK:2,441
Spain:1,352
France:2,609
Italy: 2,014
15,685
Mexico:1,177
Canada:1,819
China:8,227
Brazil:2,396
Rusia:2,022
India: 1,825
BRICs: 14,470
NIEs: 2,086
ASEAN-5:1,828
Japan:5,964
Australia:1,542
Spain is the 8th largest exporter of commercial ser vices worldwide, 4th in the EU, and the 20th-ranked exporter of merchandise trade.
Commercial Services ExportsUSD Millions
1. Spain: a highly internationalized economy
2012/2011
(%)
1 China 2,048,814.0 0.2%
2 United States 1,547,283.0 7.9%
3 Germany 1,407,098.2 4.5%
4 Japan 798,567.2 -4.5%
5 Netherlands 655,840.9 -3.0%
Country 20122012/2011
(%)
1 USA 613,796.2 4.3%
2 UK 278,212.4 -4.0%
3 Germany 254,521.5 -2.1%
4 France 208,179.5 -6.8%
Country 2012
Merchandise Trade ExportsUSD Millions
Source: World Trade Organization (WTO), 2013.
4
5 Netherlands 655,840.9 -3.0%
6 France 569,065.3 -1.7%
7 Korea, Republic of 547,869.8 -4.6%
8 Russian Federation 529,255.0 -1.3%
9 Italy 500,239.2 1.4%
10 Hong Kong, China 493,366.0 -4.4%
… … …
20 Spain 292,205.8 -6.8%
… …. …
World 18,323,000 -100.0%
4 France 208,179.5 -6.8%
5 China 190,000.0 4.3%
6 India 147,613.9 7.7%
7 Japan 139,765.9 -2.0%
8 Spain 139,510.3 -1.2%
9 Singapore 133,157.5 3.3%
10 Netherlands 126,477.8 -6.7%
TOTAL 4,346,900 1.6%
Source: World Trade Organization (WTO), 2013.
1. Spain: a highly internationalized economy
Spain, strong and sustainable external sector perfo rmance
� A competitive combination: technology, innovation, productivity and lower Unit Labor Costhave lead to a competitiveness based expansion of exports during the last three years.
Export of good and services, 2005-2013
Source: Eurostat, 2013.
5
While the world export market share of the US, UK, France and Italy has declined during last decade, due to competition from emerging count ries, the Spanish share of world merchandise exports has remained stable.
Country share in world export of merchandise trade, 1985-2012
1. Spain: a highly internationalized economy
10.0%
12.0%
14.0%
Source: World Trade Organization (WTO), 2013.
6
0.0%
2.0%
4.0%
6.0%
8.0%
Brazil China France Germany India
Italy Russia Spain UK USA
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 .
� Trade balance surplus both with the EU and the Euro Area.� Increasing market diversification: 62.8% of exports sold i n the EU in 2012 vs.
68% in 2009 (Euro Area: 57% down to 49.5% in 2012 )
Breakdown of Merchandise Trade by Recipient Region
Source: Datacomex and Bank of Spain, 2013.
7
Tourism: Spain is the 2nd country worldwide in revenues and t he 1st in Europe andranks 4th in arrivals worldwide.
INTERNATIONAL TOURIST ARRIVALSGENERATED REVENUE (INTERNATIONAL TOURISM)
1. Spain: a highly internationalized economy
2012/2011
(%)
1 USA 126.2 9.2%
2 Spain 55.9 -6.6%
3 France 53.7 -1.5%
País 2012
(Bill USD)
2012/2011
(%)
1 France 83.0 1.8%
2 USA 67.0 6.8%
3 China 57.7 0.3%
2012
(Mill. People)País
Source: WTO, 2013. Tourism Highlights.
8
Source: WTO, 2013. Tourism Highlights.
3 France 53.7 -1.5%
4 China 50.0 3.2%
5 Macao 43.7 13.7%
6 Italy 41.2 -4.2%
7 Germany 38.1 -1.9%
8 United Kingdom 36.4 3.7%
9 Hong Kong 32.1 16.0%
10 Australia 31.5 0.2%
World 1,075 3.2%
3 China 57.7 0.3%
4 Spain 57.7 2.7%
5 Italy 46.4 0.5%
6 Turkey 35.7 3.0%
7 Germany 30.4 7.3%
8 United Kingdom 29.3 -0.1%
9 Russia 25.7 13.4%
10 Malasya 25.0 1.3%
TOTAL 1,035 4.0%
Spain has the 12 th largest accumulated inward FDI stock and is the 11 th largest investor in the world.
Inward FDI stock, USD Millions
Outward FDI stock, USD Millions
1. Spain: a highly internationalized economy
EconomyOutward FDI stock
2012Mill USD Share
1 United States 5,191,116 22.0%
2 United Kingdom 1,808,167 7.7%
3 Germany 1,547,185 6.6%
4 France 1,496,795 6.3%
5 Hong Kong 1,309,849 5.6%
6 Switzerland 1,129,376 4.8%
EconomyInward FDI stock 2012
Mill USD Share1 United States 3,931,976 17.2%
2 Hong Kong SAR 1,422,375 6.2%
3 United Kingdom 1,321,352 5.8%
4 France 1,094,961 4.8%
5 Belgium 1,010,967 4.4%
6 China 832,882 3.7%
Source: UNTAD, WIR, 2013. Source: UNTAD, WIR, 2013.
9
6 Switzerland 1,129,376 4.8%
7 Japan 1,054,928 4.5%
8 Belgium 1,037,782 4.4%
9 Netherlands 975,552 4.1%
10 Canada 715,053 3.0%
11 Spain 627,212 2.7%12 Italy 565,085 2.4%
13 China 509,001 2.2%
14British Virgin Islands 433,588 1.8%
15 Australia 424,450 1.8%
16 Russian Federation 413,159 1.8%
17 Sweden 406,851 1.7%
18 Singapore 401,426 1.7%
19 Ireland 357,626 1.5%
20 Brazil 232,848 1.0%
World 23,592,739 100%
6 China 832,882 3.7%
7 Germany 716,344 3.1%
8 Brazil 702,208 3.1%
9 Singapore 682,396 3.0%
10 Switzerland 665,596 2.9%
11 Canada 636,972 2.8%
12 Spain 634,539 2.8%13 Australia 610,517 2.7%
14 Netherlands 572,986 2.5%
15 Russian Federation 508,890 2.2%
16 Sweden 376,181 1.6%
17British Virgin Islands 362,891 1.6%
18 Italy 356,887 1.6%
19 Mexico 314,968 1.4%
20 Ireland 298,088 1.3%
World 22,812,680 100%
� 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 75,073.6 19.9%2 ITALY 49,037.8 13.0%3 FRANCE 37,633.0 10.0%4 UNITED KINGDOM 35,001.4 9.3%5 GERMANY 29,142.3 7.7%6 MEXICO 22,835.5 6.0%7 LUXEMBURG 20,167.9 5.3%8 PORTUGAL 17,596.2 4.7%9 NETHERLANDS 16,844.1 4.5%10 SPAIN 16,487.8 4.4%
STOCK 2011% total 2011
País
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, 2013. Data Refered to 2011
10
10 SPAIN 16,487.8 4.4%11 SWITZERLAND 10,247.9 2.7%12 BRAZIL 7,601.2 2.0%13 UAE 5,221.0 1.4%14 SWEDEN 4,689.8 1.2%15 CANADA 4,242.0 1.1%16 JAPAN 3,004.9 0.8%17 BELGIUM 2,355.8 0.6%18 COLOMBIA 2,327.5 0.6%19 ISRAEL 1,296.9 0.3%20 DENMARK 1,135.5 0.3%21 IRELAND 1,135.4 0.3%22 URUGUAY 980.3 0.3%23 ARGENTINA 947.1 0.3%24 SAUDI ARABIA 875.7 0.2%25 NETHERLANDS ANTILLES 850.7 0.2%
10,808.4 2.9%377,539.6 100.0%
OTHERTOTAL
Spanish companies are among leading companies in th e world:
� 3 out of every 5 flights world-wide are controlledusing Spanish air navigation systems.
� Telefonica is one of the largesttelecommunications companies in the world (bymarket capitalization and number of customers).
� Santander Bank is the 1st in the euro zone (bystock market capitalization) and BBVA now operates in40 countries.
1. Spain: a highly internationalized economy
40 countries.
� IBERDROLA is the 4th largest utility company inthe world (by market capitalization).
� In 2012, 6 of world’s top 10 concession companiesare Spanish and held 36% of the world´sinfrastructure concessions.
� The Al Shoula Group, a Spanish-Saudi consortium,will manage the high-speed train between La Mecca -Medina.
� The Panama Canal expansion project has beenawarded to Spanish-led consortium
11
1. Spain: a highly internationalized economy
Spain is the 6th most open country to Foreign Investment acco rding to OECD’s FDIRestrictiveness Index
12
� 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
1. Spain: a highly internationalized economy
13
Domestic market of over 47 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
Billions $
GDP Million per capita
RK Thousand $1 United States 15,094.0 14 48,3872 China 7,298.1 80 5,4143 Japan 5,869.5 18 45,9204 Germany 3,577.0 20 43,7425 France 2,776.3 19 44,008
Source: WEF 2013
Advantages to operate in EU:
� Intra-European duty free market.
� The free movement of goods &services, capital and persons.
� Single currency: EURO.
5 France 2,776.3 19 44,0086 Brazil 2,492.9 52 12,7897 United Kingdom 2,417.6 22 38,5928 Italy 2,198.7 25 36,2679 Russian 1,850.4 51 12,993
10 Canada 1,736.9 9 50,43611 India 1,676.1 111 1,38912 Spain 1,493.5 27 32,36013 Australia 1,488.2 6 65,47714 Mexico 1,154.8 60 10,15315 Korea 1,116.2 35 22,778
15
The best European platform for doing business with Latin America:
2. Market Access
15 Agreements to Avoid Double Taxation Bolivia, Brazil, Chile, Colombia, Costa
Rica, Cuba, El Salvador, Ecuador, Mexico, Panama Peru*, Rep. Dominicana,* Trinidad & Tobago, Uruguay, Venezuela
•20 Agreements for Protection and 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
16
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.
17
Spain is the world ´s 2nd largest investor in Latin America, ( 2 nd only to the USA and the 1st among European countries.
Latin America and the Caribbean: origin of FDI
2. Market Access
USA
22%
Spain
10%
Netherlands
Others
40%
Source: ECLAC, 2012, Figures from 2007 to 2011.
Source: ECLAC, 2012. Figures from 2007 to 2011.
18
Netherlands
10%Latam
9%Canada
5%
Japan
4%
71,024
24,09120,661 19,136 18,493
8.0100
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Spain Netherlands France UK Italy Germany
EU: Origin of FDI in Latin America and the Caribbean
Many Spanish companies have a strategic position in key sectors in Latin America (ICT, Energy, finance, infrastructures, etc.)
2. Market Access
19
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.
20
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 estments Morocco,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.
Euro-Mediterranean Association Agreements
Agreements for Protection and Promotion of Reciprocal Investments
Agreements to Avoid Double Taxation
21
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
22
2. Market Access
Top ranking destination cities by investment projec ts 2011Global 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
� During 2012 the Spanish economy underwent a significant adj ustment and is inprocess of correcting accumulated imbalances
3. Economic policy and structural reforms
.
25
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 envisaged for 2013.
� Measures to increase income and reduce expenditure at all levels, with the firm aim ofachieving the deficit goal agreed with the EU.
3. Economic policy and structural reforms
26
� Spain has achieved the biggest reduction in the primary structural balance of all themajor advanced economies.
Source: Ministry of Economy & Competitiveness. Excluding impact on EDP deficit resulting from Financial Sector recapitalisation
26
In percent of GDP 2012 2013 2014 2015 2016
Central Government -4,1 -3,7 -3,5 -2.8 -2,0
Social Security -1,0 -1,4 -1,0 -0,6 -0,5
Autonomous Regions -1,8 -1,2 -1,0 -0,7 -0,2
Local Governments -0,2 0,0 0.0 0.0 0.0
General Government -7,0 -6.3 -5.5 -4.1 -2,7
Net Lending (+) / Borrowing (-) of the General Government
Financial system reform
� Spanish financial sector was seriously damaged by the real state bubble and therecession that followed.
� 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 andinternationalized Spanish Banks with an outstanding performance during thefinancial crisis.
�The local saving banks – Cajas de Ahorros- has shown structural vulnerabilitiesand the highest exposure to real estate. The Government has undertaken a
3. Economic policy and structural reforms
27
and the highest exposure to real estate. The Government has undertaken arestructuring process.
� In the last two years the provisioning system has been redressed and therestructuring process has taken fast pace.
� Transparent and independent evaluation of the IMF and external risk evaluation ofthe whole asset portfolio. 70% of the Spanish financial sector is sound and doesn’trequire additional capital.
� Increase in provisions and capital buffers on real-state exposure: Coverage of realestate assets raised from 18% in December 2011 to 45% in December 2012.
� The total number of entities in the financial sector , excluding credit cooperatives andforeign branches, has decreased from 50 in 2009 to 12 in 2012.
27
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
� Simplification and clarification of the regime of individual and collective dismissals due to
3. Economic policy and structural reforms
� 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
Recent trends in the labor market
� The labor market is adapting rapidly, spurred by recent legislative initiatives: morepart‐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
28
Measures to foster growth, competitiveness and entr epreneurship
� Guaranteeing the Domestic Market: Any product or service lawfully produced in oneregion may be offered at national level without additional paperwork.
� Liberalization of the retail sector. No restriction on commercial opening hours inareas of commercial attractiveness; increase of the number of opening days.
� Liberalization of professional services .
� Plan on Fostering entrepreneurship and business environment : measures tosupport entrepreneurs, SMEs and self‐employed workers.
� Significant reduction of the red tape to start a business.
3. Economic policy and structural reforms
29
‐
� 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)for the period 2012-2016 has been approved.
� Further liberalization of the Energy, Telecommunications and Transportation sector.
29
The first results
� For the first time in 14 years, the Spanish economy needs no external financing. In thethird quarter of 2012, Spain achieved a current account and capital surplus totaling 2.88billion €. In 2008 – four years ago—our foreign deficit was 10%.
� During 2012, Spain's productivity/cost ratio became the second-best in the entire EU.Labor costs in Spain have been reduced by 3%, and the product/employee ratio hasrisen another 3%.
� Rapid expansion of the external sector:
� Wage moderation has resulted in a competitiveness based expansion of exportsduring the last three years.
3. Economic policy and structural reforms
30
during the last three years.
� Surplus trade balances in non-energy goods with the EU and Euro Area.
� Geographical diversification of exports of goods: 60% of exports to the EU in 2012vs. 68% in 2009.
30
For more information about macroeconomic situation and economic policy visit:
www.tesoro.es
and
www.thespanisheconomy.com
31
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
32
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 201,956,096Germany 177,123,079
Spain 165,667,780France 132,801,895
Italy 117,523,374
34
Source: Eurostat 2011
Italy 117,523,374Netherlands 54,198,877Switzerland 41,555,818
Greece 33,769,199Norway 32,959,146Sweden 29,949,930Portugal 27,246,741Denmark 25,947,905Belgium 25,392,544Austria 25,284,604Ireland 23,366,097Poland 20,676,295Finland 16,448,435
Czech Republic 12,824,89534
Spain is the 3rd largest worldwide (1st in Europe) in High-Speed Network and the Europeanleader with almost 2,000 km in service. And total railway network of 13,500 km.According to The Global Competitiveness Report (World Economic Forum), Spain has one ofthe best indices of Quality of railroad infrastructure in the world, and subway system in majorcities.
Railway Network
4. Business climate: Infrastructure & Technology
0 2000 4000 6000 8000
China
High Speed Lines in the World (Kilometers)
35
Source: International Union of Railways. Data Refered July 2012
China
Japan
Spain
France
Germany
Italy
Turkey
South Korea
USA
Taiwan
Belgium
Netherlands
UK
Switzerland
35
Spain is the 1st largest EU highway network with 14,262 km. According to The GlobalCompetitiveness Report (World Economic Forum), Spain has one of the best indices ofQuality of roads in the world.
Road Network
4. Business climate: Infrastructure & Technology
0 5.000 10.000 15.000
Spain
Germany
France
Italy
UK
Length of Motorways (Kilometers)
36
UK
Portugal
Belgium
Austria
Switzerland
Croatia
Poland
Finland
Slovenia
Czech Rep.
Bulgaria
Slovakia
Norway
Romania
Lithuania
Cyprus
Estonia
Source: Eurostat 2010
36
4. Business climate: Infrastructure
Main Port Facilities
Excellent maritime connections, with 46 ports on both the Atlantic and the Mediterraneancoasts, with 3 ports among the Top-15 ports of containers in Europe (Valencia, Algecirasand Barcelona). According to The Global Competitiveness Report (World EconomicForum), Spain has one of the best indices of Quality of port infrastructures in the world.
Port Country 2011Rotterdam Netherlands 11,876,921Hamburg Germany 9,014,165Antwerp Belgium 8,663,947
Container traffic for European ports (in TEU)
37
Source: European Sea Ports Organisation. Ranking based on TEU (total number of actual twenty-foot equivalent units) of 2011
Antwerp Belgium 8,663,947Bremerhaven/Bremen Germany 5,915,487Valencia Spain 4,327,371Bahía de Algeciras Spain 3,602,631Felixstowe United Kingdom 3,248,634St-Petersburg Russia 2,365,174Marsaxlokk Malta 2,360,000Gioia Tauro Italy 2,338,000Le Havre France 2,215,262Zeebrugge Belgium 2,206,681Barcelona Spain 2,013,967Genoa Italy 1,847,102Piraeus Greece 1,680,133Southampton United Kingdom 1,588,553La spezia Italy 1,307,274Las Palmas Spain 1,287,389Marseille France 944,047
37
81 Technology Parks, hosting over 6,030 companies.
The main sectors of the companies located in the Parks
ICT Engineering/Consultancy
Medicine/Health Energy/Environment
Technology centres/R&D Industrial
Agriculture/Biotechnology Training/Human Resources
Aeronautics/Automotive Electronics
Business Centres Others
4. Business climate: Infrastructure & Technology
38
23%
14%
6%5%5%5%
4%4%
3%2%
1%
28%
Source: Association of Science and Technology Parks of Spain 2011
38
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
39Source: 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 201139
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
and
Lin
es
Broadband Lines and Penetration Rate in the EU27 , lines/100 inhabitants
Broadband: European Comparison
4. Business climate: Infrastructure & Technology
40
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
and
Lin
es
Source: XIV Implementation Report, European Commission, 201040
4. Business climate: Incentives & taxes
Regional incentives 2011-2013. Grants from Ministry of Finance and Public Administration
Main incentives for productive investment
42
There are other regional and local incentives available in all Autonomous Communities
40% Extremadura, Canarias
30% Andalucía, Castilla la Mancha, Galicia
20% Asturias, Castilla y León*, Murcia, Ceuta y Melilla
15% Aragón, Cantabria, Comunidad Valenciana*
N Cataluña, Baleares, Rioja, Madrid, Navarra, País Vasco
42
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 S.E. of Innovation in the Ministry of Economy and Competitiveness (MINECO) also offers support withgrants 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 43
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 50% 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.
44
Incentives for hiring people
4. Business climate: Incentives & taxes
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%
Conversion of Training, Apprenticeships Contracts into Permanent Contracts
All
1,800 € yearly for women
3 years1,500 € yearly for men
Partial- Time contracts linked with training activities
Less than 250 employees 100% for common contigences
1 year + 1 year plus
More than 250 employees 75% for common contigences
Source: Ministry of Employment and Social Security
45
Hiring Incentives: Reduction in the employer's soci al security contribution
Company Size Annual Amount (€) Term
"First young job" contractAll
700 €/yearly for women 500 €/yearly for men
3 yearsEmployee<30 years
Apprenticeship contracts for first jobsAll 50% for common contingences Throughout 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
46
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)
47
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
48
4. Business climate
o Human capital : Productivity, Skilled Laboro Human capital : Productivity, Skilled LaborForce and Competitive Costs.
o Decreasing Unit Labor Costs.
49
Labor Costs
Labor cost in Spain are below the EU-27 average
4. Business climate: Human Capital:productivity and skilled labor cost
130
140
150
160
170
UNIT LABOR COSTEvolution 2011-2012
Index, 2005=100
2011 2012
50
90
100
110
120
130
Index, 2005=100
Source: Eurostat. June 2013
Labor Costs
Unit Labor Costs more competitive than main European economies
4. Business climate: Human Capital:productivity and skilled labor cost
115
120
125
UNIT LABOR COST EVOLUTION, 2007-2012Index, 2005=100
51
95
100
105
110
115
2007 2008 2009 2010 2011 2012
Source: Eurostat. June 2013
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)
52
0
50.000
100.000
150.000
200.000
250.000
Source: Eurostat . June 2013. 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 at Medium Companies (Turnover: 25-50 M€; Employees:151-500)
4. Business climate: Human Capital:productivity and skilled labor cost
60
70
80
90
100
AVERAGE SALARIES BY DEPARTMENT FOR DIFFERENT SECTOR S AT MEDIUM COMPANIES
Thousand €
Source: “Salary Survey 2013”. Group ODE. Data: Thousand €
53
0
10
20
30
40
50
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
54
-3,0
-2,0
-1,0
0,0
1,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Eurostat. June 2013. Data: % change on previous period
EU 27
Spain
Social Security Costs
Employer contribution rate : 30.9% applied to a threshold. The effective rate is lower: i.efor a gross Wage of 60,000 € Year : effective rate: 18%
Incentives for certain hiring and training contracts applied to reduce employers’ S. SecurityContribution
4. Business climate: Human Capital:productivity and skilled labor cost
1,058.54 €
800 €
1.000 €
Contribution to S. Security
Group 1 Employer S. Security Contribution
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
55
324.91 €
30.9%
200 €
400 €
600 €
<1,051.4 € 1,051.5 € 3,425.6 € >3,425.7 €
Contribution to S. Security
Monthly Salary
Business Schools
IE Business School holds the No. 1 position in the 2012 Financial Times ranking of European business schools
2012 Rank
3 year average
rankSchool name Country
1 4 IE Business School Spain2 1 HEC Paris France3 3 London Business School UK4 3 Insead France/Singapore5 7 Esade Business School Spain6 6 Iese Business School Spain
4. Business climate: Human Capital:productivity and skilled labor cost
Source: Financial Times 2012
7 5 IMD Switzerland7 12 University of St Gallen Switzerland
9 7Rotterdam School of Management, Erasmus University
Netherlands
10 10 ESCP EuropeFrance/UK/GermanySpain/Italy
11 12 SDA Bocconi Italy12 11 University of Oxford: Saïd UK13 17 Warwick Business School UK14 14 Vlerick Business School Belgium15 15 EMLyon Business School France16 14 City University: Cass UK / UAE16 16 Cranfield School of Management UK18 17 Imperial College Business School UK19 14 Essec Business School France/Singapore
20 19 Stockholm School of EconomicsSweden/Russia/ Latvia
56
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 20132013 Rank School name Country
1 Harvard Business School USA
2 Stanford Graduate School of Business USA
3 University of Pennsylvania: Wharton USA
4 London Business School UK
5 Columbia Business School USA
6 Insead France/Singapore
7 Iese Business School Spain
8 Hong Kong UST Business School China
9 MIT:Sloan USA
Source: Financial Times 2013
57
9 MIT:Sloan USA
10 University of Chicago: Booth USA
11 IE Business School Spain
12 University of California at Berkeley: Haas USA
13 Northwestern University:Kellogg USA
14 Yale School of Management USA
15 Ceibs China
16 Dartmouth College:Tuck USA
16 University of Cambridge: Judge UK
18 Duke University: Fuqua USA
19 IMD Switzerland
19 New York University: Stern USA
… … …
22 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
58
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
Source: Eurostat. July 2013. Data: Thousands
Foreign Schools
There are currently 175 international schools in Spain, including 111 English spoken Schools, 24 French Schools and 19 German Schools, among others
4. Business climate: Quality of life
96
80
100
120
Foreign Schools 2013
Source: Ministry of Education, Culture and Sports, 2013
2419 15
5 5 4 2 1 1 1 1 10
20
40
60
60
� 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
61
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
62
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
63
� Spain is the fifth ICT market by volume in Europe: € 101 Billion
� The ICT income as a ratio of GDP has been 9.5% in 2011. The gross added value atmarket prices represents almost the 5.7% of GDP [1]
� Innovation investment (R&D&I)* in the ICT sector has almost doubled (x1.9) over theperiod 2003-2009. ICT’s investment in R&D accounts for 40% of the total amountinvested by the private sector in Spain
� There are almost 30,000 ICT companies, including digital content, operating in Spain.The sector is currently[2] employing over 440,000 workers.
5. Business opportunities: ICT
Information and Communication Technologies Industry in Spain
ICT Sector Turnover 2011 (€ million)
Sources [1]: EITO (European Information Technology Observatory), 2011; [2]: ONTSI (Spanish Observatory for the Telecommunications and Information Society), 2012. Data 2011
The sector is currently employing over 440,000 workers.
33,6%
27,5%
16,0%
15,6%
4,0%
3,3%
Telecom. Services
Information Technologies
Other
Production
Digital Content
€€100,828M100,828M
Commerce
Source: ONTSI, 2012. Data 2011
65
� Spanish companies are present and recognized in major international markets:
� Spain is a leader in advanced technologies :
5. Business opportunities: ICT
• 3 out of 5 flights in the world use Spanish software for landing.
• 13 of the 15 major North American oil and gas companies have Spanish management, control and information systems installed .
• Major events /Complex, distributed international delivery
• High-Tech and Defense Industry• Telecommunications, Utilities , Banking …
� Spain is a leader in advanced technologies :
66
Hardware Vendors
Telecom equipment vendors Service Providers
Software Vendors
5. Business opportunities: ICT
ICT Services and Consulting Companies
67
•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
•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 inSpain to enhance the leadership of the company and develop its technicalknowledge.
•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.
68
Biotechnology: Overview
� Spain produces 2.5 % of the world’s scientific publications according to The British Royal Society (2004-2008)
� 9th world scientific power and 5th by scientific production in the EU-15
Participation in the international scientific arena
Growing number of biocompanies and dynamic creation of jobs
Turnover (M€) biotech sector 2008-2010
5. Business opportunities: Biotechnology, Pharmacy and Life
Sciences
� During 2000-2010 the number of biotech companies rose 359%
� In 2010 1,715 companies involved in biotech activities (+12.8%) and 617 strictly biotech (+29.9%)
� 163,526 employees (+3.8%) and 8,258 R+D activities dedicated (+12.1%)
� Every year public institutions create between 10 and 14 new companies .
Source: ASEBIO 2011 Report and : Relevance of Biotechnology in Spain 2009, Genoma España, INE
Strong SPIN-OUTs culture
Turnover (M€) biotech sector 2008-2010
R+D Expenses (M€) biotech sector 2008-2010 70
� After Madrid and Catalonia, Andalucía is the autonomous region with the higher number of strictly-biotech companies.
� Most biotech companies are located in Madrid (17.39%), Catalonia (15.01%) and Andalucía (13.19%) . Together they account for nearly the 50% of the national total in 2010.
Distribution of biotechnology companies and biotech users by region
5. Business opportunities: Biotechnology, Pharmacy and Life Sciences
Source: ASEBIO 2011 Report.
71
� An established industry in Spain
� In 2011 there were about 476 pharma companies in Spain, including some with no production and/ormarketing activity.
� Leading pharmaceutical/biotech multinationals are already located in Spain many of which havesuccessfully chosen our country for the establishment of Research Excellence Centres, Production orDistribution Centres.
Distribution by region
These companies are mainly
Pharmaceutical Sector: overview
5. Business opportunities: Biotechnology, Pharmacy and Life
Sciences
Source: FarmaIndustria Annual Report 2011. PMFARMA website
These companies are mainlylocated in Catalonia and theMadrid autonomousregion , which both havelong-standing pharmatraditions.
Important companies canalso be found in otherregions such asNavarre, Andalucia andGalicia.
72
� In 2010 pharmaceutical companies set aside more than €966M for R&D.
�The sector accounts for 19.8% 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 othercompanies.
Pharmaceutical Sector: R&D spending and workforce
The pharmaceutical industry is the leader in R&D spending in Spain
5. Business opportunities: Biotechnology, Pharmacy and Life
Sciences
Source: FarmaIndustria Annual Report 2011
�The pharma industry has 4,665 employees working full-time on R&D.
�This is 12% of all R&D employment in Spanish industry.
Job creation in R&D
Biomedical researchers
�The biomedical industry created 2,153 jobs for graduate employees working exclusively on R&D.
73
2013: Novartis is investing 60M€ to expands its facilities in Cataluña for the manufacturing of the entire production line of inhalers. The expansion will create 70 new jobs.2013: Lilly has announced an increase in their production and R+D activities in their Spanish facilities.2012: Bayer concentrates its global aspirin production in Asturias investing 6M€.2011: Celgene opens its first research centre outside the United States in Seville. The CelgeneInstitute of Translational Research Europe (CITRE) plans to focus on advanced therapies and regenerative medicine investing €60M.2009: Genzyme sets up a sales office in Madrid and has a warehouse for domestic distribution.
Biotechnology and Pharmacy Sector: success storiesProof of concept for the global market
5. Business opportunities: Biotechnology, Pharmacy and Life
Sciences
Source: press articles
2008: The WHO designates the Spanish Transplant Organisation as a global collaborator for donations and transplants.2007: The EMEA approves Zeltia’s drug, Yondelis , for treatment of soft tissue sarcomas.2005: GSK opens its research centre for tropical diseases in Spain.2005: Genetrix receives an orphan-drug designation from the EMEA based on the use of adult-origin stem cells.2003: Serono concentrates its global growth-hormone production in Spain.2002: Lilly opened its research centre for medicinal chemistry, one of the biggest in the world, investing €20m.2002: Abengoa signed a $35.5m R&D agreement with the US Department of Energy.2000: Pfizer invested €12m in its European Biometric Centre, which has support functions for the
rest of Europe and USA.
74
� In 2011 this sector invoiced about 7,700 M€.
� It comprises more than 1,050 companies .
Job creation
� The healthcare technology sector employs more than 29,000 people.
Healthcare Technology: overview
The healthcare technology market
5. Business opportunities: Biotechnology, Pharmacy and Life
Sciences
Source: FENIN annual report 2011.
Exports are growing
� In 2011 the value of exports surpassed 1,800 M€.
� It represents 0.9% of the total exports in Spain.
Important trade partners
The target market is still the rest of the EU, which takes 60% of exports.
Argentina, Mexico, Czech Republic and America are playing an increasingly important role asbig importers of Spanish technology and products.
75
� The Spanish Aeronautics Industry is the 5th in Europe in terms of turnover (7.4 billion € in aeronautics in 2011) and employment (<37,000 employees)
� The Spanish space sub-sector is the 5th one at the European level, employs more than 3,000 people and had a turnover of 720 million € in year 2011.
�R&D:
5. Business opportunities: Aerospace
Aerospace Industry in Spain
• The investment in R&D activities reached 889
M€ in year 2011 (14.2% 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.
77
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
78
5. Business opportunities: Automotive
Key figures /Automotive Industry in Spain
�Spain is the 2nd largest car manufacturer in Europe and the 12 th in the world .
�Spain is the 1st manufacturer of Industrial Vehicles in Europe.
�Nine out of Ten vehicles Produced in Spain are exported to over 130 countries
�Most of the world's biggest car manufacturers are present in Spain with 17automobile production plants .
� Spain Automotive Parts Industry ranks 6th in the world .
80
� Spain Automotive Parts Industry ranks 6 in the world .
Key figures /Automotive Industry in Spain
� 2 Million vehicles were produced in Spain in 2012.
� Automotive Industry turnover accounts for 10% of GDP.
� 1.000 Auto-parts and components manufacturers.
� 300,000 people directly employed in the Industry.
5. Business opportunities: Automotive
81
Sources: ANFAC (Spanish Association of Vehicle Manufacturers /SERNAUTO Automotive Parts Exporters Association ) Last data available
� 2,000,000 jobs linked to the Sector.
� 1,73 Million vehicles exported to 130 Countries.
� 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.
Key figures/ Foreign Direct Investment
� 1,02 billion€ of Productive Investment in Spain in Car Industry in
the period 2010-2012
� 3 billion € of future investment committed by manufacturers in
2012/2013
� New Industrial Plans approved by the 9 Multinational brands
established in the country.
5. Business opportunities: Automotive
82
Sources: ICEX-INVEST; Real Instituto Elcano; Ministry of Economy and Cometitiveness (dataInvex)
� Reindustralization Plan of the Industry to produce 1 Million extra
vehicles “ 3 Million Plan”.
RENAULT – www.renault.es November 2012 Renault approves the Industrial Plan 2012-2014 for the Manufacturing Plants of Palencia (Megane), Sevilla and Valladolid (Captur and Twizzy models). 100 new jobs will be created in Sevilla’sTransmissions Plant.
IVECO- (Fiat Group) www.iveco.com/spain Industrial Plan up to 2016 for the manufacturing centers of Madrid and Valladolid (Heavy Vehicles). Investment of 0,5 billion€ and creation of 1.200 jobs throughout this period.
News /Investment Projects
5. Business opportunities: Automotive
83
FORD- www.ford.com - US-based automotive giant Ford will expand its manufacturing complex in Almussafes, Spain. The company will build a new 80,000 sq m plant at the site to produce its own automotive parts and increase a 10% the production of Renault Kuga. 1,1 billion€ investment has been committed through the period 2009-2013
MERCEDES- will Invest in 2013 up to 200 Millions € to adapt Vitoria Plant Facilities for the new VITO VS20 and its Electric Version . The Industrial Plan secures jobs in the plant.
Sources: FDI markets-Corporative Sources-ANFAC (Spanish Asso ciation of Car & Trucks manufacturers).
PSA Peugeot-Citroën - 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 Pica sso.
NISSAN: announces in 2013 €130 Million Investment in Barcelona’s Plant to produce a new Sedan Starting 2014.
GM- Includes Spanish Plant of Figueruelas in its Industrial Plan for Europe
News /Investment Projects
5. Business opportunities: Automotive
84
GM- Includes Spanish Plant of Figueruelas in its Industrial Plan for Europe that will drive up to 4 Billion Investment in 23 new models of OPEL in Europe 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 Plant is one of the most productive and flexible plant 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 .
Sources: FDI markets-Corporative SOURCES -ANFAC (Spanish Ass ociation of Car & Trucks manufacturers.
Human Resources /Professional Training/ Research
Automotive Sector expenditure in R&D&i and Professional Training is one of thehighest among all industries in Spain supported by:
� Outstanding Network of Universities Research organizations and groupsworking for the Automotive industry.
� Automotive Sector accounts for 12% of Spanish Investment in R&D&i.
� 34 Technology Centers with activities related to the automotive sector.
5. Business opportunities: Automotive
85
� 34 Technology Centers with activities related to the automotive sector.
� Significant offer of Master/post graduate studies in Automotive Industry aroundmain manufacturing hubs.
� High investment in Professional Continuous Training Programmes by CarManufacturers Annual Average of 63 Millions (444 Millions Investment through theperiod 2005-2011)
� In 2012 Manufacturers Invested almost €60 Millions in training Programmes.
� Automotive Sector Accounts for 17’4% of Total Spanish Exports of Goods.� Motor Vehicles Main Exporter €23,8 bn in 2012.� Auto –Parts 3rd Chapter in value of Spain’s External Sales with €15 bn.
Market Access – External Trade
SPAIN EXPORTS RANKING 2012Spain Exports Ranking 2012
Value € % Total
1 23,836,206.37 10.7
2 15,523,235.48 7.0
Vehicles
Fuels and Lubricants
5. Business opportunities: Automotive
86
2 15,523,235.48 7.0
3 14,967,156.14 6.7
4 10,610,095.78 4.85 9,845,766.64 4.4
6 9,135,687.10 4.1
7 7,164,621.01 3.2
91,082,768.53 40.9%
222,643,893.84 100.0%Source ICEX- Data ESTACOM
Pharmachemicals
Plastics
Subtotal
Total Spain Exports 2012
Other Industrial Products
Fuels and Lubricants
Automotive Parts and Accesories
Steel Works
5. Business opportunities: Automotive
� Spanish Auto-Parts Industry ranks 6 th in the world in terms of Turnover.
� 1,000 companies belonging to 720 groups provide customized Service.
� Turnover of 29.500 Million € in 2011, 60% exported to 150 countries
� 191,000 people directly employed in the Sector.
� Main global suppliers of the Automotive Industry established in SPAIN
Automotive Industry in Spain/ AUTO -PARTS
87Source: SERNAUTO (Spanish Association of Automotive Parts and Accesories Manufacturers). Year 2011 (last data available).
87
5. Business opportunities: Automotive
� 1.000 companies providing customized and quick service to the Industry.
� 778 Original Equipment and Original aftermarket Manufacturers.
� High levels of Foreign Investment in the Sector.
� Germany, USA, France, Italy and Japan , main investors.
Automotive Industry in Spain/AUTO -PARTS
88Source : SERNAUTO (Spanish Association of Auto-Parts Exporters)
187
215
245
131
158
25 26
0
50
100
150
200
250
300
TIER 1 TIER 2 TIER 3 Original Aftermarket
Equilavent Aftermarket
AccesoriesCommercial
Number of Manufacturing Companies by Activity
5. Business opportunities: Automotive
� Spanish Auto -Parts Industry fully integrated in EU Car Industry.
� Germany, France, United Kingdom and Portugal destination of 52% of Spanish
Auto-parts Exports.
� US, Mexico, Morocco and BRIC’s among top Ranking destinations.
Automotive Industry in Spain/AUTO -PARTS
External Trade
89
Source: ICEX/ESTACOM
Country Thousand € % Total Country Thousand € % Total1 Germany 2,053,161.19 19.37% 9 Italy 284,407.96 2.68%2 France 1,939,799.40 18.30% 10 Poland 270,761.06 2.55%3 United Kingdom 1,030,918.03 9.73% 11 Brasil 244,510.88 2.31%4 Portugal 552,084.53 5.21% 12 China 230,370.58 2.17%5 United States 504,770.91 4.76% 13 Czehc Republic 225,253.99 2.13%6 Belgium 408,901.64 3.86% 14 Rumania 215,837.57 2.04%7 Mexico 303,237.07 2.86% 15 Turkey 212,377.30 2.00%8 Morocco 293,014.17 2.76% 16 India 192,958.32 1.82%
Country Ranking Spanish Exports Auto- Parts 2012
5. Business opportunities: Automotive
Eco-Electromobility Spanish Capablities and Leadership
� 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-electromobility Projects.
� Spanish Companies are leading 13 of these Projects.
� The Spanish Technology Platform Move to Future ww.move2future.es gathers
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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 webpage GREEN CAR SPAIN. www.fp7greencars.es
5. Business opportunities: Automotive
Spanish Companies and Research Technology Centers are Heading the 3 European Projects on New Batteries:
� NECOBAUT - New Concept of Metal-Air Battery for Automotive Application based on
Advanced Nanomaterials. Coordinator TECNALIA
Total cost: EUR 3,067,332 / EU contribution: EUR 2,121,013Call: GC.NMP.2012-1
� SOMABAT - Development of novel Solid materials for high power Li polymer
Eco-Electromobility Spanish Capablities and Leadership
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� SOMABAT - Development of novel Solid materials for high power Li polymer
Batteries. Recyclability of components. Coordinator ITE Technology Institute of
Energy
Total cost: EUR 5,040,127 / EU contribution: EUR 3,700,896 Call: GC.NMP.2010-1
� GREENLION – Advanced manufacturing processes for Low Cost Greener Li-Ion
batteries Coordinator Fundación CIDETEC
Total cost: EUR 8,594,688 / EU Contribution: EUR 5,600,000 Call: GC.NMP.2011-1
Sources: SERNAUTO /MOVE TO FUTURE PLATAFORM – M2F
5. Business opportunities: Automotive
� RENAULT, MERCEDES -BENZ, PEUGEOT, CITROËN, FORD, NI SSAN and SEAT
have already made steps to produce electric powered and hybrid vehic les in
Spain.
� AUTO-PARTS companies with plants in Spain are already working on specific
components and systems for electric and hybrid vehi cles .
Eco-Electromobility/Spanish Capabilities
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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 manu facturers.
� Powerfull industrial supply chain and Auto Parts In dustry.
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� Powerfull industrial supply chain and Auto Parts In dustry.
� Availability of highly qualified human resources.
� High public and private investment in Professional Training.
� Leadership in European Industrial Innovation-Mobil ity Sector.
� Privileged Export Platform towards EU, Latin-Americ a, North Africa.
� Open Country for Foreign Investment. Public Suppor t for Business Development.
• Spanish Logistics sector is fifth in Europe in terms of volum eand employment.
• Turnover € 99,5 billions• Logistics• Road, Railway, Sea and Air Freight• Growth rate of 25% in the last 3 years• Nearly 4% of the Spanish GDP
5. Business opportunities: Logistics and Transport
Logistics and Transport Industries in Spain
45,8%43,6%
Turnover (2010)
• Nearly 4% of the Spanish GDP
• Employment > 920,000 workers• 4.3 % of active workers in Spain• 91.9% occupancy rate
• Companies > 209,000• Structure: High market concentration• 90% SME’s• 10 big companies manage 27% of the business
Source: National Institute of Statistics, 2012.
1,9%
8,7%
Road and Rail Freight
Sea Freight
Air Freight
Warehousing and other activities related to transport
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• The Infrastructure, Transport andHousing Plan (2012 - 2024) states astable and sustained investor scenario ofup to 0.94% of GDP during the period.
• Larger extension of kilometers ofhighway in EU-27 > 14,000 km. 5.9 %Spain vs 1.2% EU average, 1.4% USA or0.6% Japan.
5. Business opportunities: Logistics and Transport
0.6% Japan.
• 46 Seaports of which Valencia, Bahiade Algeciras y Barcelona are placedamong the first ten European.
• The Mediterranean Corridor plan withinTrans-European Transport Networkconnects the Mediterranean SpanishSeaports to a rail corridor which linksNorth Africa to Central Europe throughSpain.
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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 American markets.Invest in Spain, May 2011.
• TNT International Operations Center Madrid - Barajas (Spain) became hub for South America in2002. Today, shipments to and from fifteen South American countries are handled from BarajasHub and to its whole network. Web.
• Total Terminal International Algeciras (TTIA) part of the South Korean Hanjin Shipping groupbuilds its first container terminal semi-automatic of the Mediterranean and Southern Europe,News July 2010.
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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 (Nov 2011).
• Mexico's Pemex will install its European operating base in the port of La Coruna
which implies a direct investment of $ 70 million (Oct 2012).which implies a direct investment of $ 70 million (Oct 2012).
• The Danish APM Terminals Algeciras will devote € 42 million investment to meet their
new triple E ships in the port of Bahia de Algeciras (Jan 2013).
• 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 (Jan 2013).
• 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 euros – 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
Success stories:� Spain ranks third in the world and first in Europe for ISO 14001 Environmental
Management certification with more than 16,500 awarded.� In 2011, the EU granted 85.8 million euros to 29 Spanish projects concerned with nature
preservation, 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
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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 79 projects for a totalamount of € 9 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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