Since the signing of the economic and military agreements with the United States, in 1953, that marked the beginning of the end of the isolation of Spain in the international scenario and, even more so, with the Spanish incorporation to the European Economic Community, in 1986, foreign investment in Spain grew to unprecedented levels. However, it is useful to shed light on some details that contribute to dispelling myths and pre-established ideas.
According to a study by the D & B consultant for 2017, only 2% of the companies located in Spanish territory are foreign. We are talking about some 18,205 active companies in the country that, paradoxically, account for 26% of the total (380 billion euros). Foreign companies, worth pointing out, employ 970,000 workers (19% of the economically active population). In terms of geographical location, 40% of commercial companies go to Madrid, 29% choose Catalonia and 8% are based in Andalusia.
The case of Catalonia deserves a separate line: according to fDi Markets (the largest online database of foreign investments), Barcelona was -in 2015- the second European city by volume of foreign investment (after London) and the sixth city in Europe by the number of projects. Catalonia is, historically and in recent years, the fourth region in Europe (first in continental Western Europe) in foreign investment volume.
And what are the business opportunities for foreign companies that decide to settle in Spain? Let’s see some statistics. The trade takes 25% of the total. The construction follows with 15%; business services, are next with 14% and the industry is fourth with 11%. It is no coincidence that these same sectors stand out among national companies (among which, however, construction exceeds trade). Is the weight of foreign companies decisive in the sectors in which they operate? Well, we can say that they cover 9% of the energy market; 7% in financial intermediation and 5% in telecommunications.
Separate paragraph for an analysis of commercial and financial risk of non-Spanish institutions. The levels of risk they present are lower than their national peers: 29% have a high or medium-high risk compared to 36% of Spanish companies, while 71% of foreign companies have low or medium-low risk levels, compared to 64% of Spanish companies.
The vast majority of foreign investors agree that Spain has many clear advantages when it comes to settling in: the flexibility and adaptability of economic operators, the quality of life offered by the country, its cultural proximity to Latin America (where several Spanish multinationals are located), the rise of tourism, the efficiency of its transport network and the development of renewable energy. As an incentive for the future, Spain aspires to become one of the world’s leading research players.
The other side of the coin is the obstacles of the Spanish administration: the complexity of starting a new company, and the lack of relevance of the Spanish market compared to other Western countries. We would need several more pages to analyze the complexity of the Spanish legislative system, due to the presence of 17 Autonomous Communities (comparable to the American states, the Italian regioni or the German Länder), which is also an obstacle to investment.
After a brief analysis of all the factors, we can conclude that Spain undoubtedly has unique and attractive characteristics that make it an unavoidable destination for foreign investment.
About the author:
Eduardo Fort holds a degree in Political Science from Complutense University of Madrid. He has participated in academic projects related to History of Ideas and Political Theory. He has collaborated with various media – newspapers and television- as an international analyst and specialist in Latin America.
