COUNTRY PROFILES
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COUNTRY PROFILE
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Spain |
Print article Madrid |
Spain is one of the world’s most developed countries with a very important role in the international political and economic scenario. The country has well proved its capacity to effectively translate consistent economic growth into significant investments, including communications networks, comprising thousands of kilometres of highways, high-speed train services and satellite facilities. This capacity and the constant effort made to ensure the competitiveness of its economic structure have enabled Spain to be placed among the world’s main economic players.
Spain is today the eighth in the ranking of the world’s largest economies, as well as the only economy of the former EU-15, besides Ireland, that has been growing during the last four years at a substantial pace of more than 3% per year. Real growth for 2005 is expected to be 3.4% GDP, and the prospects for 2006, according to international economic organisations, indicate a growth of 3.5% GDP.
The single currency introduced in 2002 in 12 countries of the EU, the euro zone, has created a monetary zone comparable to the United States and a consolidated tariff-free market of more than 470 million consumers. With the Euro, the opportunities of growth and development for Spain have been further increased. The effective economic performance of Spain is the result of the legislative reforms undertaken and of the heavy investments made by Spanish enterprises to ensure competitiveness, develop foreign networks and join multinational projects.
The population of Spain in 2004 was 42.7 million, with a density of nearly 84 inhabitants per square kilometre. Spain is a markedly urban society, as evidenced by the fact that close to 34% of the population lives in the capitals of the provinces of Spain. Spain has a labour force of nearly 20 million, representing 56% of the country’s population. The labour force is very qualified, productive and capable of adapting to technological changes. The structure of the labour force by economic sector has changed significantly in recent years: services 64.8%, industry 18%, construction 12%, and agriculture 5.2%.
Infrastructure
Over the last decade, Spain has undergone a process of modernisation that has included an extensive renewal of its infrastructure. This is reflected in the Strategic Infrastructure and Transport Plan for 2005–2020, which provided for investment totalling over 242 thousand million Euros. Rail transport is the main item in the Plan, absorbing nearly 50% of the investments.
The motorway network, totalling 11,000 km, has more than tripled in length since 1982. The investment plan will result in over 15,000 km of motorway networks by year 2020. As far as rail transport is concerned, Spain has a network of over 15,000 km of track, and in 1982 introduced a 471 km high-speed train line from Madrid to Seville. High-speed train lines have become a priority for the government’s infrastructure plan (the foreseen network of high-speed trains will total 7,200 km).
There are air transport services between the main cities. The approximately 250 airlines with scheduled flights operating out of the country’s 47 airports ensure complete service abroad.
Foreign trade and investment
Spain’s exports and imports have grown rapidly in recent years, due to the strong income of foreign investment. Spain’s main trading partners are, according to figures released in 2004: the EU with 74.4% of total exports and 64.4% of total imports; Latin America representing 4.2% of Spanish exports and 3.8% of imports; and the U.S. accounting for 3.8% of exports and 3.6% of imports.
Foreign direct investment is mainly routed, according to 2004 figures, to the “other manufactured products” sector (24.42%), which includes the fabrication of other mineral non-metallic products (mainly cement) and metallurgy (mainly aluminum). Following that was the financial sector (15.19%), where the insurance subsector was especially important (8.01%), along with trade (10.48%) and real estate (9.42%).
Financial institutions
Banks and savings banks are of particular importance in the financial sector in Spain, because of the volume of their business and because they are active in all segments of the economy. The banks operating in Spain are financial institutions authorized as such which engage in intermediation transactions using funds obtained from customers and provide other services of a financial nature.
In 2004, there were 77 officially registered Spanish banks, many subsidiaries, branches, representative offices and correspondents abroad. Some 60 foreign banks also have offices in Spain. A noteworthy development in the regulatory area is a bill amending the Securities Market Law and the Corporations Law to reinforce the transparency of listed corporations. The saving banks that issue securities admitted for trade on official securities markets must annually publish a corporate governance report, which must be filed with the Spanish National Securities Market Commission (CNMV).
Investment incentives
In order to respond to investment expectations and the need to promote growth, the central government, the governments of the Autonomous Communities and certain provincial and municipal authorities have implemented a system of aid and incentives to encourage the creation of new companies and research and development and innovation (R&D&I) investment projects.
The central government has provided, and continues to provide, financial aids and tax benefits carried out in certain industries which are considered to be priority sectors in view of their growth potential and their impact on the nation’s overall economy (eg activities in the agro food industry, energy, mining, technological development, research and development, etc). In addition, the Autonomous Community governments provide similar incentives for most of these industries.
Financial aid includes both nonrefundable subsidies and interest relief on the loans obtained by the beneficiaries, or a combination of the two.
American investment
American direct investment in Spain is huge. Consolidated turnover of American subsidiaries in Spain represents more than 7.1% of the Spanish GDP. These companies invest more than 9% of private sector in R&D&I, and export more than 10% of total Spanish exports. On the other hand, annual research carried out by the American Chamber of Commerce evidences a clear trend on behalf of these companies to invest more in the country.
Facts in brief
 Gaudi’s work in Barcelona |
Spain’s location is South-western Europe, bordering the Bay of Biscay, Mediterranean Sea, North Atlantic Ocean, and Pyrenees Mountains, south-west of France. Strategic location along approaches to Strait of Gibraltar
Its climate is temperate: clear, hot summers in interior, more moderate and cloudy along coast; cloudy, cold winters in interior, partly cloudy and cool along coast
Natural resources include coal, lignite, iron ore, copper, lead, zinc, uranium, tungsten, mercury, pyrites, magnesite, fluorspar, gypsum, sepiolite, kaolin, potash, hydropower, arable land
Agricultural products are grain, vegetables, olives, wine grapes, sugar beets, citrus; beef, pork, poultry, dairy products, fish
Industries include textiles and apparel (including footwear), food and beverages, metals and metal manufactures, chemicals, shipbuilding, automobiles, machine tools, tourism, clay and refractory products, footwear, pharmaceuticals, medical equipment
Diplomatic representation in the US — Chief of mission: Ambassador Carlos Westendorp
Diplomatic representation from the US — Chief of mission: Ambassador Eduardo Aguirre, Jr
Contact Information
American Chamber of
Commerce in Spain
Tuset 8, Entlo 3a
Barcelona E-08006
Spain
Tel: +34 93 415 9963
E-mail: info@amchamspain.com
Website: www.amchamspain.com
Useful websites
| www.investinspain.org | Financial and business advice — includes links to all relevant government ministries, business guide, company formation |
| www.embusa.es | US Embassy in Spain |
| www.spain.info | Tourist information |