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Why Expand to Spain?

Spain is the Latin country par excellence. It is at the top of the holiday dreams of millions of people, thanks to the climate, the playas, the nightlife and astonishing beautiful cultural attractions. However, the idea of the marvelous sun and sea destination for holidaymakers is as attractive as misleading when it comes to think about business. Spain produces more cars, more steel and for instance more wind energy turbines than the UK. Spain is a stable and highly developed democracy, where expanding your business in Spain is a sure bet to win, potentially paying off very very well.

Historically, Spain has been both the meeting place for several different cultures and a global empire in colonial era. Today, according to the World Bank, Spain's economy is the ninth largest worldwide. It now faces the challenge of entering the G8, something that is feasible for a country that is flying high in long-term projects and plans. In fact, the country and its government keep pushing towards long-waited changes, which practically mean progress and business opportunities waiting for you. Many Spanish institutions support a wide range of sectors of the economy, recently with a special attention for foreign investors. Licensing or incorporating a business in Spain are also valuable options.

Some facts. Spain occupies an area of more than 500,000 square kilometres in South West Europe and its size is two and a half times the area of the UK. It has a population of just over 45 million, with a close to zero growth rate. The capital, Madrid, with its population of around 3 million, is the administrative and business centre of the country around which many modern industries have grown, and where many large companies have their headquarters. Barcelona and Bilbao are also at the heart of major areas of industry and commerce. There are also important business centres in other regions, including Valencia, Sevilla, Malaga, Zaragoza, Valladolid and Vigo.
Spain is a nation of small businesses. Recognising this, the Spanish government actively supports this sector of the economy. Recent government campaigns and initiatives have focused on support for entrepreneurs, primarily in response to Spain's economic goals for the future.

The main industrial sectors are textiles and apparel (including footwear), food and beverages, metals and metal manufactures, chemicals, shipbuilding, automobiles, machine tools, tourism, clay and refractory products, footwear, pharmaceuticals and medical equipment.

Attraction to UK business

British commercial relations with Spain have deep roots that go back for several centuries. As a result, UK is highly regarded in the Spanish business community.
No wonder the UK is also the first largest foreign investor in Spain. Most recently, the value of UK investment in Spain stood at ₤1.6bn. There are around 700 UK companies already based in Spain.
In the Basque Country particularly, and in northern Spain more generally, the British businessperson is viewed very positively. British business people are regarded as serious and people of their word. The British businessperson is also associated with quality goods and services.
The Spanish government is committed to opening up the Spanish market and has embarked on an extensive privatisation programme. Spain therefore offers many opportunities to the British exporter across a range of sectors. Moreover, culturally, linguistically and economically speaking, Spain is considered a strategic location for penetrating the Latin American market, with a potential market of 600 million consumers.

Business opportunities

Together with more traditional sectors (such as textiles and clothing, healthcare and pharmaceutical, electrical machinery, petroleum and petroleum products, iron and steel, industrial machinery, metalliferous ores and metal scrap) which remain attractive for UK companies, the following areas of business present particularly interesting opportunities:

- Aerospace (design, development, testing, manufacturing and commercialisation capabilities for military transport application, avionics, aircraft dismanteling, airline pilot training, helicopters facilities, manintenance, parts manifacturign green materials, Very Light Jets)
- Automotive (hi-tech devices for cars, such as car start by fingerprint analysis, non-polluting technologies, hybrid motors)
- Biotechnology (molecular diagnosis and arrays of DNA and proteins, pharmacogenetic, nanomedicine, industrial enzymes using transgenic plants, theraupetic proteins, active ingredients from marine organism)
- Environmental (waste and water treatment cutting edge technologies)
- ICT (digital terrestrial television devices, auxiliary services to mobile phones, wireless, voice over IP, commercial B2B electronic document interchange systems, domotics, open source software)
- Renewable energy (solar photovoltaic energy, wind turbines, gearbox and cast elements, solid biofuels, biogas, hydrogen production, storage and distribution, fuel cells)
- Security (Internal radio telecomm, TETRA- and 3G-based, fleet management , traffic management and control, public areas control and surveillance systems: CCTV, plate recognition, access control, biometrics, scanning)
- Digital cinema (digital content production and in the distribution or exhibition of these contents)
- Publishing (New technologies/formats, scientific translation, translated titles and sales of rights)
- Education (training and equipment, ICT equipment, consultancy services in partnership with Spanish agencies, low cost Science laboratory and technology classrooms)
- Tourism (some 16.2 million British tourists visit Spain each year and over 700,000 British citizens live in Spain permanently)

Madrid and Barcelona are Spains major economic hubs, other important business centres where you may consider to set up a business in Spain are Valencia, Sevilla, Malaga, Zaragoza, Valladolid and Vigo.

Challenges

• Language. The main business language used throughout Spain is Castillian Spanish. Most large Spanish firms will have people who can do business in English, but in general English is not widely spoken especially amongst smaller agents or distributors.

• Bureuacracy. Once it was said that in order to deal with bureaucracy in Spain, you had to be retired, unemployed or a student as these are the only people with enough time to queue, and attend the number of times it is usually necessary to file paperwork. The situation tough has improved with the introduction of faster procedures that do help reduce the burden (please visit the English section of the Ministerio de Industria, Turismo y Comercio). If you have still problems or you need to make things working faster, it could be a good idea to contact a gestoria. Gestorias are private agencies specialised in dealing with administrative and legal work with a minimum of fuss. They usually work at surprisingly cheap rates.

• Regional fragmentation. There are very significant regional differences in Spain. Each of Spain's autonomous regions has its own way of doing things as well as a strong regional identity (in particular Basque Country and Catalonia). When expanding a business in Spain, it is important to have access to regional contacts to ensure that you obtain the right credit. Business etiquettes and even the languages may be very different.

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