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Spain, your partner in Europe_ICEX_August2013

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Spain holds the 9th largest accumulated inward FDI stock and the 11th largest investor in the world. It offers many business opportunities and investment in many sectors as: Information and …

Spain holds the 9th largest accumulated inward FDI stock and the 11th largest investor in the world. It offers many business opportunities and investment in many sectors as: Information and Communication Technologies (ICT), Environmental, Biotechnology, Aerospace, Automotive, Logistics & Transport and Renewable Energies.

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  • 1. Spain: your partner in Europe Global Market Access from an International Economy Investment Framework Business Opportunities August 2013 0
  • 2. INDEX 1. Spain: a highly internationalized economy 2. Global Market Access 3. Macroeconomic Situation and Structural Reforms 4. Business Climate Infrastructure and Technology Incentives and taxes Human capital: Productivity, Skilled Labor Force and Competitive Costs Quality of life: Expat setting up 5. Business Opportunities 6. ICEX / Invest in Spain 1
  • 3. 1. Spain: a highly internationalized economy 2
  • 4. 1. Spain: a highly internationalized economy Spain is the world’s 13th largest economy and the 5th largest economy in the EU: GDP worth 1.5 trillions USD GDP comparison of major economic regions, USD billions EU 27: 16,584 NAFTA: 18,681 Asia: 18,296 Germany: 3,401 France: 2,609 UK: 2,441 Italy: 2,014 Spain: 1,352 USA: 15,685 Japan: 5,964 ASEAN-5: 1,828 Australia: 1,542 BRICs: 14,470 Source: IMF, 2013. Data Referred to 2012 NIEs: 2,086 Canada: 1,819 Mexico: 1,177 Rusia: 2,022 China: 8,227 Brazil: 2,396 India: 1,825 3
  • 5. 1. Spain: a highly internationalized economy Spain is the 8th largest exporter of commercial services worldwide, 4th in the EU, and the 20th-ranked exporter of merchandise trade. Merchandise Trade Exports USD Millions Commercial Services Exports USD Millions Country 2012 2012/2011 (%) 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% 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% 126,477.8 -6.7% 4,346,900 1.6% 10 Netherlands TOTAL Source: World Trade Organization (WTO), 2013. Country 1 2 3 4 5 6 7 8 9 10 China United States Germany Japan Netherlands France Korea, Republic of Russian Federation Italy Hong Kong, China … 20 Spain … World 2012 2012/2011 (%) 2,048,814.0 1,547,283.0 1,407,098.2 798,567.2 655,840.9 569,065.3 547,869.8 529,255.0 500,239.2 493,366.0 … 292,205.8 …. 18,323,000 0.2% 7.9% 4.5% -4.5% -3.0% -1.7% -4.6% -1.3% 1.4% -4.4% … -6.8% … -100.0% Source: World Trade Organization (WTO), 2013. 4
  • 6. 1. Spain: a highly internationalized economy Spain, strong and sustainable external sector performance A competitive combination: technology, innovation, productivity and lower Unit Labor Cost have lead to a competitiveness based expansion of exports during the last three years. Export of good and services, 2005-2013 Source: Eurostat, 2013. 5
  • 7. 1. Spain: a highly internationalized economy While the world export market share of the US, UK, France and Italy has declined during last decade, due to competition from emerging countries, the Spanish share of world merchandise exports has remained stable. Country share in world export of merchandise trade, 1985-2012 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Brazil Italy China Russia France Spain Germany UK India USA Source: World Trade Organization (WTO), 2013. 6
  • 8. 1. Spain: a highly internationalized economy Spanish and foreign companies established in Spain focus on EU markets, but are increasing their exports and business towards Latin America, USA, Asia, Russia, Africa and 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 in 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
  • 9. 1. Spain: a highly internationalized economy Tourism: Spain is the 2nd country worldwide in revenues and the 1st in Europe and ranks 4th in arrivals worldwide. GENERATED REVENUE (INTERNATIONAL TOURISM) País 1 2 3 4 5 6 7 8 9 10 2012 (Bill USD) 2012/2011 (%) USA Spain France China Macao Italy Germany United Kingdom Hong Kong Australia World 126.2 55.9 53.7 50.0 43.7 41.2 38.1 36.4 32.1 31.5 1,075 9.2% -6.6% -1.5% 3.2% 13.7% -4.2% -1.9% 3.7% 16.0% 0.2% 3.2% INTERNATIONAL TOURIST ARRIVALS Source: WTO, 2013. Tourism Highlights. País 1 2 3 4 5 6 7 8 9 10 France USA China Spain Italy Turkey Germany United Kingdom Russia Malasya TOTAL 2012 (Mill. People) 2012/2011 (%) 83.0 67.0 57.7 57.7 46.4 35.7 30.4 29.3 25.7 25.0 1,035 1.8% 6.8% 0.3% 2.7% 0.5% 3.0% 7.3% -0.1% 13.4% 1.3% 4.0% Source: WTO, 2013. Tourism Highlights. 8
  • 10. 1. Spain: a highly internationalized economy Spain has the 12th largest accumulated inward FDI stock and is the 11th largest investor in the world. Outward FDI stock, USD Millions Inward FDI stock, USD Millions Economy 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 United States Hong Kong SAR United Kingdom France Belgium China Germany Brazil Singapore Switzerland Canada Spain Australia Netherlands Russian Federation Sweden British Virgin Islands 17 18 Italy 19 Mexico 20 Ireland World Source: UNTAD, WIR, 2013. Inward FDI stock 2012 Mill USD 3,931,976 1,422,375 1,321,352 1,094,961 1,010,967 832,882 716,344 702,208 682,396 665,596 636,972 634,539 610,517 572,986 508,890 376,181 Share 17.2% 6.2% 5.8% 4.8% 4.4% 3.7% 3.1% 3.1% 3.0% 2.9% 2.8% 2.8% 2.7% 2.5% 2.2% 1.6% 362,891 1.6% 356,887 314,968 298,088 1.6% 1.4% 1.3% 22,812,680 100% Economy 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 United States United Kingdom Germany France Hong Kong Switzerland Japan Belgium Netherlands Canada Spain Italy China Outward FDI stock 2012 Mill USD Share 5,191,116 22.0% 1,808,167 7.7% 1,547,185 6.6% 1,496,795 6.3% 1,309,849 5.6% 1,129,376 4.8% 1,054,928 4.5% 1,037,782 4.4% 975,552 4.1% 715,053 3.0% 627,212 2.7% 565,085 2.4% 509,001 2.2% British Virgin Islands 433,588 1.8% Australia Russian Federation Sweden Singapore Ireland Brazil 424,450 413,159 406,851 401,426 357,626 232,848 1.8% 1.8% 1.7% 1.7% 1.5% 1.0% World 23,592,739 100% Source: UNTAD, WIR, 2013. 9
  • 11. 1. Spain: a highly internationalized economy Spain: Inward FDI by country Stock : EUR Millions País USA, UK, Germany, France and Italy Companies are the largest investors in Spain. Increasing interest of companies from Asia (especially from China, India, Korea and Japan) Latin America (especially from Mexico and Brazil) and from the Middle East Countries. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 USA ITALY FRANCE UNITED KINGDOM GERMANY MEXICO LUXEMBURG PORTUGAL NETHERLANDS SPAIN SWITZERLAND BRAZIL UAE SWEDEN CANADA JAPAN BELGIUM COLOMBIA ISRAEL DENMARK IRELAND URUGUAY ARGENTINA SAUDI ARABIA NETHERLANDS ANTILLES OTHER TOTAL STOCK 2011 75,073.6 49,037.8 37,633.0 35,001.4 29,142.3 22,835.5 20,167.9 17,596.2 16,844.1 16,487.8 10,247.9 7,601.2 5,221.0 4,689.8 4,242.0 3,004.9 2,355.8 2,327.5 1,296.9 1,135.5 1,135.4 980.3 947.1 875.7 850.7 10,808.4 377,539.6 % total 2011 19.9% 13.0% 10.0% 9.3% 7.7% 6.0% 5.3% 4.7% 4.5% 4.4% 2.7% 2.0% 1.4% 1.2% 1.1% 0.8% 0.6% 0.6% 0.3% 0.3% 0.3% 0.3% 0.3% 0.2% 0.2% 2.9% 100.0% Source: Registro de Inversiones, 2013. Data Refered to 2011 10
  • 12. 1. Spain: a highly internationalized economy Spanish companies are among leading companies in the world: 3 out of every 5 flights world-wide are controlled using Spanish air navigation systems. Telefonica is one of the largest telecommunications companies in the world (by market capitalization and number of customers). Santander Bank is the 1st in the euro zone (by stock market capitalization) and BBVA now operates in 40 countries. IBERDROLA is the 4th largest utility company in the world (by market capitalization). In 2012, 6 of world’s top 10 concession companies are Spanish and held 36% of the world´s infrastructure 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 been awarded to Spanish-led consortium 11
  • 13. 1. Spain: a highly internationalized economy Spain is the 6th most open country to Foreign Investment according to OECD’s FDI Restrictiveness Index 12
  • 14. 1. Spain: a highly internationalized economy Over 12,800 foreign companies are currently located in Spain across all economic sectors 70 of the FORBES Top 100 companies have branches in Spain 13
  • 15. 2. Market Access 14
  • 16. 2. Market Access Domestic market of over 47 million consumers: Spain has a GDP per capita (PPP) above the EU-27 average. Spain grants free access to the world´s largest market, the European Union: more than 500 million consumers Advantages to operate in EU: Intra-European duty free market. The free movement of goods & services, capital and persons. Single currency: EURO. Country 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 GDP Billions $ United States China Japan Germany France Brazil United Kingdom Italy Russian Canada India Spain Australia Mexico Korea 15,094.0 7,298.1 5,869.5 3,577.0 2,776.3 2,492.9 2,417.6 2,198.7 1,850.4 1,736.9 1,676.1 1,493.5 1,488.2 1,154.8 1,116.2 GDP Million per capita RK Thousand $ 14 48,387 80 5,414 18 45,920 20 43,742 19 44,008 52 12,789 22 38,592 25 36,267 51 12,993 9 50,436 111 1,389 27 32,360 6 65,477 60 10,153 35 22,778 Source: WEF 2013 15
  • 17. 2. Market Access The best European platform for doing business with Latin America: 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
  • 18. 2. Market Access Why is Spain a perfect hub for doing business in Latin America? 1. Common historical, cultural and linguistic roots. 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 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
  • 19. 2. Market Access Spain is the world´s 2nd largest investor in Latin America, ( 2nd only to the USA and the 1st among European countries. Latin America and the Caribbean: origin of FDI USA 22% Others 40% Japan 4% Spain 10% Canada 5% Latam 9% Netherlands 10% EU: Origin of FDI in Latin America and the Caribbean 80,000 71,024 70,000 60,000 Source: ECLAC, 2012, Figures from 2007 to 2011. 50,000 40,000 30,000 24,091 20,661 20,000 19,136 18,493 10,000 8.010 0 Spain Netherlands France UK Italy Germany Source: ECLAC, 2012. Figures from 2007 to 2011. 18
  • 20. 2. Market Access Many Spanish companies have a strategic position in key sectors in Latin America (ICT, Energy, finance, infrastructures, etc.) 19
  • 21. 2. Market Access Some multinational companies establish themselves in Spain for managing their operations in Latin America or in the EU. And in addition, Spain has become the European Headquarters of Latin-American multinational companies doing business in Europe and MENA countries. • LATIBEX: the single international market for Latin American securities regulated by the Spanish Stock Market. 20
  • 22. 2. Market Access Spain is the nearest European market for doing business with North- African and Mediterranean countries: •4 Agreements to Avoid Double Taxation : Morocco, Algeria, Tunisia, Egypt. •5 Agreements for Protection And Promotion of Reciprocal Investments 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
  • 23. 2. Market Access Key Role of the Spanish Canary Islands Special Zone (ZEC) as a commercial and logistic hub with Africa Geostrategical location: In the Southernmost border of the European Union (EU) Strong historical and commercial ties with Africa and America Authorised by the European Commission in January 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 America and Europe www.zec.org 22
  • 24. 2. Market Access Top ranking destination cities by investment projects 2011 Global Location Trends. IBM Global Business Services 2012 Source: Global Location Trends. IBM Global Business Services. 2012. (Projects of less than 10 jobs were not included 23
  • 25. 3. Macroeconomic reforms situation and structural 24
  • 26. 3. Economic policy and structural reforms During 2012 the Spanish economy underwent a significant adjustment and is in process of correcting accumulated imbalances . 25
  • 27. 3. Economic policy and structural reforms 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 and enforcement tools. Independent Fiscal Authority envisaged for 2013. Measures to increase income and reduce expenditure at all levels, with the firm aim of achieving the deficit goal agreed with the EU. Spain has achieved the biggest reduction in the primary structural balance of all the major advanced economies. Net Lending (+) / Borrowing (-) of the General Government In percent of GDP 2012 2013 Central Government -4,1 -3,7 Social Security -1,0 -1,4 Autonomous Regions -1,8 -1,2 Local Governments -0,2 0,0 General Government -7,0 -6.3 2014 -3,5 -1,0 -1,0 0.0 -5.5 2015 -2.8 -0,6 -0,7 0.0 -4.1 Source: Ministry of Economy & Competitiveness. Excluding impact on EDP deficit resulting from Financial Sector recapitalisation 2016 -2,0 -0,5 -0,2 0.0 -2,7 26 26
  • 28. 3. Economic policy and structural reforms Financial system reform Spanish financial sector was seriously damaged by the real state bubble and the recession 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 largest 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 highest exposure to real estate. The Government has undertaken a restructuring process. In the last two years the provisioning system has been redressed and the restructuring process has taken fast pace. 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. Increase in provisions and capital buffers on real-state exposure: Coverage of real estate assets raised from 18% in December 2011 to 45% in December 2012. The total number of entities in the financial sector, excluding credit cooperatives and foreign branches, has decreased from 50 in 2009 to 12 in 2012. 27 27
  • 29. 3. Economic policy and structural reforms Labour Market Reform: Fostering labor flexibility and productivity at company level. Firm-Level wage bargaining prevails over national, regional or sector collective agreements. Collective Dismissals without administrative authorization are allowed for firms posting falling 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 economic 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: more part‐time jobs & lower percentage of employees with temporary contracts, as well as decelerating nominal and real wages Sharp reduction in Unit Labor Costs as a continuation of decreasing wages in some sectors and sharp increase in labor productivity 28
  • 30. 3. Economic policy and structural reforms Measures to foster growth, competitiveness and entrepreneurship Guaranteeing the Domestic Market: Any product or service lawfully produced in one region may be offered at national level without additional paperwork. Liberalization of the retail sector. No restriction on commercial opening hours in areas of commercial attractiveness; increase of the number of opening days. Liberalization of professional services. Plan on Fostering entrepreneurship and business environment: measures to support entrepreneurs, SMEs and self‐employed workers. ‐ Significant reduction of the red tape to start a business. Internationalization agency. Centralization of all public export promotion instruments. Set-up of a Commissioner for the Spain Brand, in order to strengthen our country’s reputation 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 regulatory bodies 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 29
  • 31. 3. Economic policy and structural reforms The first results For the first time in 14 years, the Spanish economy needs no external financing. In the third quarter of 2012, Spain achieved a current account and capital surplus totaling 2.88 billion €. 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 has risen another 3%. Rapid expansion of the external sector: Wage moderation has resulted in a competitiveness based expansion of exports 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 2012 vs. 68% in 2009. 30 30
  • 32. For more information about macroeconomic situation and economic policy visit: www.tesoro.es and www.thespanisheconomy.com 31
  • 33. 4. Business climate o Infrastructure and Technology o Incentives and taxes o Human capital: Productivity, Skilled Labor Force and Competitive Costs o Quality of life: Expat setting up 32
  • 34. 4. Business climate o Infrastructure and Technology 33
  • 35. 4. Business climate: Infrastructure & Technology Airport Network 250 airlines have scheduled flights, operating out of the country’s 47 airports, being Madrid and Barcelona the main hubs. Country Source: Eurostat 2011 Passengers on board United Kingdom Germany Spain France Italy Netherlands Switzerland Greece Norway Sweden Portugal Denmark Belgium Austria Ireland Poland Finland Czech Republic 201,956,096 177,123,079 165,667,780 132,801,895 117,523,374 54,198,877 41,555,818 33,769,199 32,959,146 29,949,930 27,246,741 25,947,905 25,392,544 25,284,604 23,366,097 20,676,295 16,448,435 12,824,895 34 34
  • 36. 4. Business climate: Infrastructure & Technology Railway Network Spain is the 3rd largest worldwide (1st in Europe) in High-Speed Network and the European leader 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 of the best indices of Quality of railroad infrastructure in the world, and subway system in major cities. High Speed Lines in the World (Kilometers) 0 2000 4000 6000 8000 China Japan Spain France Germany Italy Turkey South Korea USA Taiwan Belgium Netherlands UK Switzerland Source: International Union of Railways. Data Refered July 2012 35 35
  • 37. 4. Business climate: Infrastructure & Technology Road Network Spain is the 1st largest EU highway network with 14,262 km. According to The Global Competitiveness Report (World Economic Forum), Spain has one of the best indices of Quality of roads in the world. Length of Motorways (Kilometers) 0 5.000 10.000 15.000 Spain Germany France Italy UK Portugal Belgium Austria Switzerland Croatia Poland Finland Slovenia Czech Rep. Bulgaria Slovakia Norway Romania Lithuania Cyprus Estonia Source: Eurostat 2010 36 36
  • 38. 4. Business climate: Infrastructure Main Port Facilities Excellent maritime connections, with 46 ports on both the Atlantic and the Mediterranean 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 indices of Quality of port infrastructures in the world. Container traffic for European ports (in TEU) Source: European Sea Ports Organisation. Ranking based on TEU (total number of actual twenty-foot equivalent units) of 2011 Port Rotterdam Hamburg Antwerp Bremerhaven/Bremen Valencia Bahía de Algeciras Felixstowe St-Petersburg Marsaxlokk Gioia Tauro Le Havre Zeebrugge Barcelona Genoa Piraeus Southampton La spezia Las Palmas Marseille Country Netherlands Germany Belgium Germany Spain Spain United Kingdom Russia Malta Italy France Belgium Spain Italy Greece United Kingdom Italy Spain France 2011 11,876,921 9,014,165 8,663,947 5,915,487 4,327,371 3,602,631 3,248,634 2,365,174 2,360,000 2,338,000 2,215,262 2,206,681 2,013,967 1,847,102 1,680,133 1,588,553 1,307,274 1,287,389 944,047 37 37
  • 39. 4. Business climate: Infrastructure & Technology 81 Technology Parks, hosting over 6,030 companies. The main sectors of the companies located in the Parks ICT Medicine/Health Technology centres/R&D Agriculture/Biotechnology Aeronautics/Automotive Business Centres Engineering/Consultancy Energy/Environment Industrial Training/Human Resources Electronics Others 23% 28% 1% 2% 3% 4% 14% 4% 5% 5% 5% 6% Source: Association of Science and Technology Parks of Spain 2011 38 38
  • 40. 4. Business climate: Infrastructure & Technology Technology Adoption by Companies Whatever the company size, Spain leads the field in technologically enabled companies Broadband penetration in Business (% of companies with broadband access) ICT Infrastructures in Spanish Businesses 100 90 Computer 80 100 70 Internet 80 Local Area Network 60 60 40 50 20 E-Mail 40 Wireless LAN 0 30 20 Other Technologies Broadband 10 Mobile Phones EU-27 PT IT NL BG GE SE FN UK FR MT ES 0 Total Source: Eurostat – Community Survey on ICT usage in enterprises, 2011 (Data 2010) 10 to 49 50 to 249 250 or more Source: ONTSI, based on INE 2011 39 39
  • 41. 4. Business climate: Infrastructure & Technology Broadband: European Comparison 25.000.000 100% 22.500.000 90% 17.500.000 Brodband Lines 80% Broadband Lines and Penetration Rate in the EU27, lines/100 inhabitants 70% 15.000.000 60% 12.500.000 50% 37% 10.000.000 31% 29% 7.500.000 31% 28% 28%28%28% 30% 25% 24% 21% 18% 5.000.000 40% 36% 18% 17% 21% 20% 16% 20% 19% 17%17% 13% 11% Lines/100 inhabitants 20.000.000 20% 13% 2.500.000 10% 0 0% MT CY LU EE LV SI SK LT IE Source: XIV Implementation Report, European Commission, 2010 EL HU FI CZ PT AT DK BE SE PL NL ES IT FR UK DE 40 40
  • 42. 4. Business climate o Incentives and taxes 41
  • 43. 4. Business climate: Incentives & taxes Main incentives for productive investment Regional incentives 2011-2013. Grants from Ministry of Finance and Public Administration 40% 30% 20% 15% N Extremadura, Canarias Andalucía, Castilla la Mancha, Galicia Asturias, Castilla y León*, Murcia, Ceuta y Melilla Aragón, Cantabria, Comunidad Valenciana* Cataluña, Baleares, Rioja, Madrid, Navarra, País Vasco There are other regional and local incentives available in all Autonomous Communities 42 42
  • 44. 4. Business climate: Incentives & taxes Spain has got many Institutions that promote incentives in different calls along the year R&D&i: •The Centre for Industrial Technological Development (CDTI) has got a wide range of grants and loans at competitive low interest rate for technological projects. •The S.E. of Innovation in the Ministry of Economy and Competitiveness (MINECO) also offers 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 for investments 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 a very competitive interest rate and where no-guarantee is required. •The Public organization RED.ES promotes the IT activities of technological companies and start-ups financing investments in infrastructures, equipments and so on. Investments: •The Official Credit Institute (ICO) supports the creation/investment carried out by companies and entrepreneurs with loans/ leasing at a low rate •The Ministry of Industry, Energy and Tourism (MINETUR) and The Ministry of Economy and Competitiveness (MINECO) support investments in equipment and infrastructures with grants and loans for large and SMEs companies •The Institute for Energy Diversification and Saving (IDAE) participates directly in the projects with loans at a low interest rate Human Resources: •The Ministry of Industry, Energy and Tourism (MINETUR) and The Ministry of Economy and Competitiveness (MINECO) support investments in human resources, training and hiring, personnel with 43 grants and loans
  • 45. 4. Business climate: Incentives & taxes 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. 0,5 0,4 0,4 Large firms 0,425… 0,3 0,3 0,2 0,2 0,1 0,1 0,0 -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. 2. In addition, the Spanish CIT law introduced a patent box type of incentive. Under this regime 50% of revenues arising from the letting of the right to use certain qualifying intellectual property (IP) rights are tax-exempt. 44
  • 46. 4. Business climate: Incentives & taxes Incentives for hiring people Training Contracts Incentives: Reduction in the employer's social security contribution Company Size Less than 250 employees New contract Annual Amount (€) 100% More than 250 employees Term 75% Throughout the term of the contract Employee<30 years 1,800 € yearly for women Conversion of Training, Apprenticeships Contracts into Permanent Contracts All 3 years 1,500 € yearly for men Less than 250 employees 100% for common contigences More than 250 employees 75% for common contigences Partial-Time contracts linked with training activities 1 year + 1 year plus Hiring Incentives: Reduction in the employer's social security contribution Company Size "First young job" contract All Employee<30 years Annual Amount (€) 700 €/yearly for women €/yearly for men Term 500 3 years Apprenticeship contracts for first jobs All 50% for common contingences Throughout the term of the contract Employee<30 years Companies with less than 50 workers hiring unemployed Less than 50 employees 3 years 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 Source: Ministry of Employment and Social Security 45
  • 47. 4. Business climate: Incentives & taxes Taxes: moderate tax burden The comparative analysis shows that Spain is a country with a relatively moderate tax burden. (32.4% GDP) Countries UE. Tax Revenues (Including Social Security Contributions ) as a percentage of GDP 60,0 50,0 40,0 30,0 20,0 10,0 0,0 Source: Eurostat 2012 46
  • 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 and OECD 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) Italy Estonia France Belgium Austria Sweden Hungary Czech Republic Slovak Republic Germany Greece Romania Poland Lithuania EU & EFTA Average Portugal Malta Norway Finland Netherlands Spain Latvia United Kingdom Slovenia Iceland Switzerland Bulgaria Denmark Ireland Cyprus Luxembourg 80 70 60 50 40 30 20 10 0 Source: Paying taxes 2013 (PwC & World Bank) 47
  • 49. 4. Business climate: Incentives & taxes Taxes: ETVEs 1. 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 ETVE regime is an opportunity for international investors to channel their outbound investments (in Europe, LATAM and other countries) through Spanish HoldCos. Main Investors in Spanish ETVEs 40.000.000,00 35.000.000,00 30.000.000,00 25.000.000,00 20.000.000,00 15.000.000,00 10.000.000,00 5.000.000,00 0,00 48
  • 50. 4. Business climate o o Human capital: Productivity, Skilled Labor Force and Competitive Costs. Decreasing Unit Labor Costs. 49
  • 51. 4. Business climate: Human Capital: productivity and skilled labor cost Labor Costs Labor cost in Spain are below the EU-27 average UNIT LABOR COST Evolution 2011-2012 Index, 2005=100 170 160 150 140 2011 2012 130 120 110 100 90 Index, 2005=100 Source: Eurostat. June 2013 50
  • 52. 4. Business climate: Human Capital: productivity and skilled labor cost Labor Costs Unit Labor Costs more competitive than main European economies UNIT LABOR COST EVOLUTION, 2007-2012 Index, 2005=100 125 120 115 Spain 110 Germany France Italy 105 United Kingdom 100 95 2007 2008 2009 2010 2011 2012 Source: Eurostat. June 2013 51
  • 53. 4. Business climate: Human Capital: productivity and skilled labor cost Compensation of employees Spain has the lower compensation of employees* in comparison with main European economies COMPENSATION OF EMPLOYEES Millions € (current prices) 400.000 350.000 300.000 250.000 200.000 Germany Spain 150.000 France Italy 100.000 United Kingdom 50.000 0 Source: Eurostat . June 2013. Data: Millions € (at current prices) *Compensation of employees consists of wages and salaries, and of employers' social contributions 52
  • 54. 4. Business climate: Human Capital: productivity and skilled labor cost Salaries and wages in Spain Average salaries by department for different sectors at Medium Companies (Turnover: 25-50 M€; Employees:151-500) AVERAGE SALARIES BY DEPARTMENT FOR DIFFERENT SECTORS AT MEDIUM COMPANIES Thousand € 100 90 80 70 60 50 40 30 Executive Director/National/Chief Division Director 20 Manager/Head of Department 10 Officer/Programmer/Technician 0 Source: “Salary Survey 2013”. Group ODE. Data: Thousand € 53
  • 55. 4. Business climate: Human Capital: productivity and skilled labor cost Labor Productivity Spanish Labor Productivity is better than EU-27 Labor Productivity LABOR PRODUCTIVITY % change on previous period 4,0 3,0 2,0 1,0 EU 27 Spain 0,0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -1,0 -2,0 -3,0 Source: Eurostat. June 2013. Data: % change on previous period 54
  • 56. 4. Business climate: Human Capital: productivity and skilled labor cost Social Security Costs Employer contribution rate: 30.9% applied to a threshold. The effective rate is lower: i.e for a gross Wage of 60,000 € Year : effective rate: 18% Incentives for certain hiring and training contracts applied to reduce employers’ S. Security Contribution Contribution to S. Security Group 1 Employer S. Security Contribution 1.000 € 1,058.54 € 800 € 30.9% 600 € 324.91 € 400 € 200 € <1,051.4 € 1,051.5 € 3,425.6 € >3,425.7 € Monthly Salary 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
  • 57. 4. Business climate: Human Capital: productivity and skilled labor cost Business Schools IE Business School holds the No. 1 position in the 2012 Financial Times ranking of European business schools 3 year 2012 average Rank rank 1 4 2 1 3 3 4 3 5 7 6 6 7 5 7 12 9 7 10 10 School name IE Business School HEC Paris London Business School Insead Esade Business School Iese Business School IMD University of St Gallen Rotterdam School of Management, Erasmus University ESCP Europe 11 12 SDA Bocconi 12 11 University of Oxford: Saïd 13 17 Warwick Business School 14 14 Vlerick Business School 15 15 EMLyon Business School 16 14 City University: Cass 16 16 Cranfield School of Management 18 17 Imperial College Business School 19 14 Essec Business School Source: Financial Times 2012 20 19 Stockholm School of Economics Country Spain France UK France/Singapore Spain Spain Switzerland Switzerland Netherlands France/UK/Germany Spain/Italy Italy UK UK Belgium France UK / UAE UK UK France/Singapore Sweden/Russia/ Latvia 56
  • 58. 4. Business climate: Human Capital: productivity and skilled labor cost Business Schools Spanish Business Schools have three MBA programs among the top 25 in the world Global MBA ranking 2013 School name 2013 Rank 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 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 Source: Financial Times 2013 57
  • 59. 4. Business climate: Human Capital: productivity and skilled labor cost Highly skilled labor force Spain ranks 4th in Europe in number of persons with a scientific/technical tertiary education, just behind Germany, United Kingdom and France Human Resources in Science & Technology with tertiary education, 2012 20.000 18.000 16.000 14.000 12.000 10.000 8.000 6.000 4.000 2.000 0 Source: Eurostat. July 2013. Data: Thousands 58
  • 60. 4. Business climate o Quality of life: Expat setting up 59
  • 61. 4. Business climate: Quality of life Foreign Schools There are currently 175 international schools in Spain, including 111 English spoken Schools, 24 French Schools and 19 German Schools, among others Foreign Schools 2013 120 100 96 80 60 40 24 20 19 15 5 5 4 2 1 1 1 1 1 0 Source: Ministry of Education, Culture and Sports, 2013 60
  • 62. 4. Business climate: Quality of life Spain is the 1st 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 foreignborn, a figure that rises to 16-17% in regions like Madrid or Catalonia One of the largest number of International Schools in Europe 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
  • 63. 4. Business climate: Quality of life Expat Experience. League table of selected OECD countries Country Overall Experience Overall quality of life Overall 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 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 Source: Own elaboration based on The Expat Explorer Survey 2012.(HSBC) 62
  • 64. 5. Business opportunities o ICT (Information and Communication Technologies) o Biotechnology, Pharmacy and Life Sciences o Aerospace o Automotive o Logistics and Transport o Environment and Water 63
  • 65. 5. Business opportunities: ICT 64
  • 66. 5. Business opportunities: ICT Information and Communication Technologies Industry in Spain 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 at market prices represents almost the 5.7% of GDP [1] Innovation investment (R&D&I)* in the ICT sector has almost doubled (x1.9) over the period 2003-2009. ICT’s investment in R&D accounts for 40% of the total amount invested 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. ICT Sector Turnover 2011 (€ million) Other Production 3,3% 4,0% Telecom. Services Commerce 15,6% 33,6% €100,828M Digital Content 16,0% 27,5% Source: ONTSI, 2012. Data 2011 Information Technologies Sources [1]: EITO (European Information Technology Observatory), 2011; [2]: ONTSI (Spanish Observatory for the Telecommunications and Information Society), 2012. Data 2011 65
  • 67. 5. Business opportunities: ICT Spanish companies are present and recognized in major international markets: Spain is a leader in advanced technologies: • 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… 66
  • 68. 5. Business opportunities: ICT Software Vendors Telecom equipment vendors Hardware Vendors Service Providers ICT Services and Consulting Companies 67
  • 69. 5. Business opportunities: ICT Success stories •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 health sector. •INSA, an IBM branch, has set up two centres (Caceres and Salamanca) for software development s to be applied worldwide. •MareNostrum, supercomputer installed in the Barcelona Supercomputing Centre in collaboration with the University of Catalonia. •Technology Expert Council (TEC), which integrates the best talents of IBM in Spain to enhance 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 and R&D centers. 68
  • 70. 5. Business opportunities: Biotechnology, Pharmacy and Life Sciences 69
  • 71. Biotechnology: Overview 5. Business opportunities: Biotechnology, Pharmacy and Life Sciences Participation in the international scientific arena 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 Growing number of biocompanies and dynamic creation of jobs Turnover (M€) biotech sector 2008-2010 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%) Strong SPIN-OUTs culture 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 R+D Expenses (M€) biotech sector 2008-2010 70
  • 72. 5. Business opportunities: Biotechnology, Pharmacy and Life Sciences Distribution of biotechnology companies and biotech users by region After Madrid and Catalonia, Andalucía is the autonomous region with the higher number of strictlybiotech 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. Source: ASEBIO 2011 Report. 71
  • 73. Pharmaceutical Sector: overview 5. Business opportunities: Biotechnology, Pharmacy and Life Sciences An established industry in Spain In 2011 there were about 476 pharma companies in Spain, including some with no production and/or marketing activity. Leading pharmaceutical/biotech multinationals are already located in Spain many of which have successfully chosen our country for the establishment of Research Excellence Centres, Production or Distribution Centres. Distribution by region 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. Source: FarmaIndustria Annual Report 2011. PMFARMA website 72
  • 74. 5. Business opportunities: Biotechnology, Pharmacy and Life Sciences Pharmaceutical Sector: R&D spending and workforce The pharmaceutical industry is the leader in R&D spending in Spain 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 other companies. Job creation in R&D The pharma industry has 4,665 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. Source: FarmaIndustria Annual Report 2011 73
  • 75. 5. Business opportunities: Biotechnology, Pharmacy and Life Sciences Biotechnology and Pharmacy Sector: success stories Proof of concept for the global market 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 Celgene Institute 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. 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 adultorigin 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. Source: press articles 74
  • 76. Healthcare Technology: overview 5. Business opportunities: Biotechnology, Pharmacy and Life Sciences The healthcare technology market 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. 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 as big importers of Spanish technology and products. Source: FENIN annual report 2011. 75
  • 77. 5. Business opportunities: Aerospace 76
  • 78. 5. Business opportunities: Aerospace Aerospace Industry in Spain 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: • 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
  • 79. 5. Business opportunities: Aerospace Success stories 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) According to Boeing: “The reason for choosing Spain was the outstanding role of the country in the EU and as a reference point with the Latin American countries. It also shows the relevant position that the Spanish Aerospace industry has acquired in the last few years and the capabilities of the country in environmental and ATM technologies” Source: www.boeing.es 78
  • 80. 5. Business opportunities: Automotive 79
  • 81. 5. Business opportunities: Automotive Key figures /Automotive Industry in Spain Spain is the 2nd largest car manufacturer in Europe and the 12th 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 17 automobile production plants. Spain Automotive Parts Industry ranks 6th in the world. 80
  • 82. 5. Business opportunities: Automotive 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. 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. Sources: ANFAC (Spanish Association of Vehicle Manufacturers /SERNAUTO Automotive Parts Exporters Association ) Last data available 81
  • 83. 5. Business opportunities: Automotive 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. Reindustralization Plan of the Industry to produce 1 Million extra vehicles “ 3 Million Plan”. Sources: ICEX-INVEST; Real Instituto Elcano; Ministry of Economy and Cometitiveness (dataInvex) 82
  • 84. 5. Business opportunities: Automotive News /Investment Projects 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’s Transmissions 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. 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 Association of Car & Trucks manufacturers). 83
  • 85. 5. Business opportunities: Automotive News /Investment Projects 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 Picasso. 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 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 Association of Car & Trucks manufacturers. 84
  • 86. 5. Business opportunities: Automotive Human Resources /Professional Training/ Research Automotive Sector expenditure in R&D&i and Professional Training is one of the highest among all industries in Spain supported by: Outstanding Network of Universities Research organizations working for the Automotive industry. and groups Automotive Sector accounts for 12% of Spanish Investment in R&D&i. 34 Technology Centers with activities related to the automotive sector. Significant offer of Master/post graduate studies in Automotive Industry main manufacturing hubs. around High investment in Professional Continuous Training Programmes by Car Manufacturers Annual Average of 63 Millions (444 Millions Investment through the period 2005-2011) In 2012 Manufacturers Invested almost €60 Millions in training Programmes. 85
  • 87. 5. Business opportunities: Automotive Market Access – External Trade 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. Spain Exports SPAIN EXPORTS RANKING 2012 Ranking 2012 Value € % Total 1 Vehicles 23,836,206.37 10.7 2 Fuels and Lubricants 15,523,235.48 7.0 3 Automotive Parts and Accesories 14,967,156.14 6.7 4 5 6 Steel Works Other Industrial Products Pharmachemicals 10,610,095.78 9,845,766.64 9,135,687.10 4.8 4.4 4.1 7 Plastics 7,164,621.01 3.2 Subtotal 91,082,768.53 40.9% 222,643,893.84 100.0% Total Spain Exports 2012 Source ICEX- Data ESTACOM 86
  • 88. 5. Business opportunities: Automotive Automotive Industry in Spain/ AUTO -PARTS Spanish Auto-Parts Industry ranks 6th 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 Source: SERNAUTO (Spanish Association of Automotive Parts and Accesories Manufacturers). Year 2011 (last data available). 87
  • 89. 5. Business opportunities: Automotive Automotive Industry in Spain/AUTO -PARTS 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. Number of Manufacturing Companies by Activity 300 245 250 215 200 187 158 150 131 100 50 25 26 0 TIER 1 TIER 2 TIER 3 Orig inal Eq uilavent Acceso riesCo mmercial Aftermarket Aftermarket Source : SERNAUTO (Spanish Association of Auto-Parts Exporters) 88
  • 90. 5. Business opportunities: Automotive Automotive Industry in Spain/AUTO -PARTS External Trade 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. Country Ranking Spanish Exports Auto- Parts 2012 1 2 3 4 5 6 7 8 Country Germany France United Kingdom Portugal United States Belgium Mexico Morocco Thousand € 2,053,161.19 1,939,799.40 1,030,918.03 552,084.53 504,770.91 408,901.64 303,237.07 293,014.17 % Total 19.37% 18.30% 9.73% 5.21% 4.76% 3.86% 2.86% 2.76% 9 10 11 12 13 14 15 16 Country Thousand € % Total Italy 284,407.96 2.68% Poland 270,761.06 2.55% Brasil 244,510.88 2.31% China 230,370.58 2.17% Czehc Republic225,253.99 2.13% Rumania 215,837.57 2.04% Turkey 212,377.30 2.00% India 192,958.32 1.82% Source: ICEX/ESTACOM 89
  • 91. 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 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 90
  • 92. 5. Business opportunities: Automotive Eco-Electromobility Spanish Capablities and Leadership 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 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 91
  • 93. 5. Business opportunities: Automotive Eco-Electromobility/Spanish Capabilities RENAULT, MERCEDES -BENZ, PEUGEOT, CITROËN, FORD, NISSAN and SEAT have already made steps to produce electric powered and hybrid vehicles in Spain. AUTO-PARTS companies with plants in Spain are already working on specific components and systems for electric and hybrid vehicles. 92
  • 94. 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. 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. 93
  • 95. 5. Business opportunities: Logistics and Transport 94
  • 96. 5. Business opportunities: Logistics and Transport Logistics and Transport Industries in Spain • Spanish Logistics sector is fifth in Europe in terms of volume and employment. Turnover (2010) • 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 43,6% 45,8% 8,7% • Employment > 920,000 workers • 4.3 % of active workers in Spain • 91.9% occupancy rate 1,9% Road and Rail Freight Sea Freight Air Freight Warehousing and other activities related to transport • Companies > 209,000 • Structure: High market concentration Source: National Institute of Statistics, 2012. • 90% SME’s • 10 big companies manage 27% of the business 95
  • 97. 5. Business opportunities: Logistics and Transport • The Infrastructure, Transport and Housing Plan (2012 - 2024) states a stable and sustained investor scenario of up to 0.94% of GDP during the period. • Larger extension of kilometers of highway in EU-27 > 14,000 km. 5.9 % Spain vs 1.2% EU average, 1.4% USA or 0.6% Japan. • 46 Seaports of which Valencia, Bahia de Algeciras y Barcelona are placed among the first ten European. • The Mediterranean Corridor plan within Trans-European Transport Network connects the Mediterranean Spanish Seaports to a rail corridor which links North Africa to Central Europe through Spain. 96
  • 98. 5. Business opportunities: Logistics and Transport Success stories • 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 in 2002. Today, shipments to and from fifteen South American countries are handled from Barajas Hub and to its whole network. Web. • Total Terminal International Algeciras (TTIA) part of the South Korean Hanjin Shipping group builds its first container terminal semi-automatic of the Mediterranean and Southern Europe, News July 2010. 97
  • 99. 5. Business opportunities: Logistics and Transport Success stories • 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). • 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. 98
  • 100. 5. Business opportunities: Enviroment and Water 99
  • 101. 5. Business opportunities: Enviroment and Water Environmental Industry in Spain • 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 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 environmental information and communication. • Areas that require urgent attention and offer opportunities to foreign investors include waste management, air quality and water treatment: Waste generation: Emissions: Water consumption: 547 kg/inhabitant in 2009 8.02 tonnes of CO2 equivalent /inhabitant in 2009 154 litres/inhabitant/day in 2008 100
  • 102. 5. Business opportunities: Enviroment and Water Environmental Industry in Spain: key players Public entities EUROPEAN ENVIROMENTAL AGENCY SPANISH MINISTRY OF ENVIRONMENT AND AGRICULTURE • • Private companies Provides sound & Makes proposals independent information • and develops the implementation of 32 member countries government policy www.eea.europa.es • • 17 REGIONAL AUTHORITIES Definition and implementation of environmental policy Regional environmental authorities often called Consejerías www.magrama.es • • MUNICIPAL AUTHORITIES Subsidies Fines Refuse collection, street cleaning etc Local environmental authorities, often called ‘concejalias’ 101
  • 103. 5. Business opportunities: Enviroment and Water The Water sector in Spain • Maximum reservoir capacity • Reserves at February 2013 • Domestic consumption 54,388 hm3 37,267 hm3 (67.36%) 166 litres/inhabitant/day Uses Irrigation Human supply Industry Water Origin Dams Underwater sources Desalination Other sources Treatment 62.66 % 21.16 % 17.17 % 85 % 10 % 2% 3% 3,500 hm³/year of treated wastewater by 1,300 WWTP 500 hm³/year reused by regeneration systems >700 towns with >2,000 inhabitants with no wastewater treatment plant 102
  • 104. 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 of Agriculture, 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 Institute ProDTI, University of Seville CENTA Foundation “Investigación e Innovación para el Desarrollo Social” 103
  • 105. ICEX / Invest in Spain your partner in Spain 6. ICEX-Invest in Spain Orense 58, 3rd floor 28020 Madrid SPAIN T (+34) 91 503 58 00 E-mail: investinspain@icex.es www.investinspain.org 104
  • 106. Who is… INVEST IN SPAIN is the Directorate in charge of attracting foreign direct investment in ICEX-Spain Trade & Investment. The Secretary of State for Trade is our president (Ministry of Economy and Competitiveness). Objectives & activities To promote, attract and maintain foreign direct investment in Spain Attracting new projects of foreign investment by focusing on countries, sectors and businesses that involve greater growth potential for Spain Promoting a business climate and facilitating doing business in Spain Transmitting an image of Spain as an internationalized country associated with highly competitive human and technological resources To be the benchmark for foreign investors and the meeting point between companies and institutions in the State, Regional and Local levels engaged in promoting and attracting investments 105
  • 107. 1.- Information and Advice Personalized advisory service. Customized reports Information on European, National, Regional and Local grants and subsidies applicable to investment projects Information on administrative procedures and advice on all stages of the investment process Specialized consultancy on legal, technical and market areas through partnership institutions Specialist publications: sector guides, tax, immigration and legal briefs…. 2.- Support and Management Assistance with the establishment of foreign companies in Spain: Finding the best location for each project throughout Spain Organization and co-ordination agenda: meetings and visits to of companies and institutions throughout Spain, as well as with the regional and local governments concerned Identification of the strategic & technology partners for each project 106
  • 108. 3- Business Development Working in conjunction with regional and local agencies to provide clients with the best possible service and location Help in seeking incentives, public and private finance for the establishment, development and expansion of companies setting up in Spain Introductions to other companies: to projects, suppliers, specialist consultancy… help with reinvestment Partnership & management of joint investments by foreign companies and Spanish investors 4.- Business climate Presents the collective needs & interests of foreign-owned companies to the Spanish Administration Opinion surveys: individual interviews, focus-groups, Analysis of the business climate. Foreign chambers of commerce, associations, etc Legislative and administrative proposals Periodical publications on topics of interest to investors 107
  • 109. 6. Invest in Spain: Investor services Services of special interest : Immigration Department Provides advice about the most appropriate way (quickest and least bureaucratic) to obtain the permits for highly qualified employees, technical staff, scientists, families, ... Advice about how to open a branch, create or acquire a company ... Assessment regarding transactions that involve immigration issues for foreigners without residence in Spain Act as the institutional contact for companies vis-à-vis all Spanish bodies with powers, such as the Spanish Embassy and Consulates, Ministry of Employment , Home Office and Regional Immigration Offices 108
  • 110. 6. Invest in Spain: Investor services Services of special interest : The Technology Fund Program The Technology Fund is a special budget of € 2,300 million from European Regional Development Fund (ERDF) created to promote business R&D&I in Spain for the 2007-2013 period Invest in Spain takes part in this European program with a € 24 million budget by promoting the capture of investments with a high degree of R&D&I from foreign-owned capital companies Investment in facilities, equipment, human resources and technology could be supported up to € 200,000 grant per company in competitive tender. From 2008 Invest in Spain has supported 79 projects for a total amount of € 9 million in high added value sectors such as Biotechnology, IT, Renewable energies and Environment 109
  • 111. ICEX / Invest in Spain your partner in Spain 6. ICEX-Invest in Spain Orense 58, 3rd floor 28020 Madrid SPAIN T (+34) 91 503 58 00 E-mail: investinspain@icex.es www.investinspain.org 110

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