|Spain at a glance|
|LOCATION||Southern Europe. Member of the European Union since 1986|
POPULATION BY SECTORS
|POLITICAL SYSTEM||Parliamentary monarchy|
|GDP||22,279 € per capita in 2014
|Source of economic figures: Spanish Institute of Foreign Commerce (ICEX)|
Spain has bounced back with renewed financial capacity and growth potential, after these years of crises marked by major public sector, financial system, and labour market adjustments and reforms, boosting entrepreneurial ventures and competition.
Its privileged geographic situation in the South of Europe with access to the Mediterranean makes it a gateway to a potential market of more than 1,300 million consumers in Europe, Northern Africa, the Middle East and Latin America; it has strong language, economic, historical and cultural bonds with this last one..
Its population amounts to 47 million people, to which we should add more than 60 million international tourists who visit Spain every year. Its labour market combines an offer of young, highly qualified labour with highly competitive labour costs, public services and housing.
It also has an extensive infrastructures network, a major industrial fabric and excellent energy and telecommunications networks. It has more than eighty technological parks where more than 6,500 companies are established
New communications technologies, automotive, aeronautics, the environmental and pharmaceutical, chemical and biotechnology, logistics, food and tourism sectors are growing and offer business opportunities.
Spain is one of the most active countries in trading goods and services. It is the 18th exporter and the 17th importer of goods in the world. While it is the 9th exporter and 16th services importer in the world.
All these factors make Spain the best destination for foreign entrepreneurs seeking to minimize their investment risks, excellence in their services, and profitability of their products, due to its moderate cost of resources.
Spain has a worldwide revenue taxation system.
Personal income tax for individuals is defined by bands and normally ranges from 12% to 47%, according to the volume of income (salary plus other revenue) the person earns.
Wealth tax is also defined by tranches and lies between 0.02% and 4.21%; with variations according to the Autonomous Community.
The general company tax rate is 28%. The tax rate is 25% for companies with a turnover under 5 million euros and a staff under 25 employees.
The general value added tax (VAT) rate is 21%.
Limited liability companies (S.L.) and stock companies (S.A.) are the most common types of companies chosen for corporate activity. . Their general regime is defined below:
LIMITED LIABILITY COMPANY
|MINIMUM CAPITAL||3,000 €||60,000 €|
|MINIMUM PAID UP CAPITAL||100% of the capital||25% of the capital (15.000 €)|
|MINIMUM NUMBER OF||One, either a Spanish or foreign natural or legal person|
|SHARES/STAKES||The stakes are nominative and must be numbered in numerical order.||The shares may be nominative or bearer and must be numbered in numerical order.|
|LOCAL DIRECTORS REQUIRED||No, but it is recommend that at least one be resident to provide a substantial appearance.|
|MEETINGS||At least one Ordinary General Meeting of Shareholders to approve the accounts and approve management by the governing body.|
Companies may adhere to the ETVE (holding) regime when their corporate object includes the activity of management and administration of securities representing the equity of entities that are not resident in Spanish territory, by the relevant organisation of material and human resources.
To adhere to the ETVE regime, the company must notify the Ministry of Finance. The regime shall be applied to the tax period that ends after this communication and the successive ones that are concluded before the Ministry of Finance is notified of renunciation thereof.
The yields from companies obtained from dividends from their subsidiaries, as well as revenue obtained from conveying such securities, pursuant to the requisites foreseen in Article 21 of the Company Tax Act (CT) are tax exempt, as long as the following conditions are fulfilled:
If the stake in the entity paying the dividend or that conveyed is less than 5%, direct or indirect, of its equity, or when the acquisition value of the stake exceeds 6 million euros.
The profit distributed, or that shared must be from entrepreneurial activities.
The subsidiary has been subject to a foreign tax of an identical or similar nature to Company Tax in the financial year when the profit distributed was obtained, or that related to the share thereof.
Participation in the ETVE tax regime is not allowed for.
Companies that have the main activity of managing real estate or moveable assets, thus holding companies.
Spanish or European Economic Interest Groups.
Companies whose partner or shareholder is resident in a territory Spain considers a tax haven.
Companies whose non resident subsidiary was previously a Spanish company and that performed relocation for financial reasons.
This is an incentive for exploitation of certain intangible assets.
The object of the Patent Box is to encourage creation, protection and exploitation of intangible assets with a potential to be commercialised by the company that innovates, that is, any innovation applied by a company, from a design, a means of production or commercialisation and, of course, a product or service.
The tax incentive consists of integrating 40% of the revenue from assignment of the right to use or exploit the intangible assets in the taxable base, so the regime leaves 60% of the revenue exempt (income minus expenses) arising from the assignment. This amounts to an effective company taxation of 10% (if the taxation rate to apply is 25%).
In addition to its advantages from a tax point of view, this regime is valid because it allows performance of innovative activities by small and medium companies (SMEs) to be valued, to know the cost of the resources applied and the profitibility oftheir results, as in order to adhere to it, it requires the company to be very exhaustive in determining the associated expenses and revenue.
This incentive is undoubtedly the most powerful of those that exist under the Spanish tax regulations, as the innovating company is allowed to recover 100% of the overall expenses and investments of the whole set of years of application. It is compatible with other tax incentives for Research, Development and Innovation (R&D&i) activities.and applicable both to individual or independent companies, as well as to corporate groups.
Spain is a founding member of the Organisation for Economic Co-operation and Development (OECD). This organisation a unique forum where the governments work together to deal with the economic, social and governance challenges related to globalisation, as well as to take advantage of its opportunities.
Spain has also been a member of the European Union since 1986 and, as such, is party to the Free Trade Treaties it has subscribed. . The first Free Trade Treaties (FTT) of the European Union were signed in 1973 with countries in the European Economic Area. Iceland, Switzerland, Norway and Liechtenstein. In the 90s, free trade treaties were signed with Andorra (1991), San Marino (1992), Turkey (1995), Palestine and the Faroe Islands (1997) and Tunisia (1998). In 2000, they were signed with Morocco, South Africa, Israel and Mexico. Subsequently they were signed with Jordan (2002), with Chile and Lebanon (2003), with Egypt and the Republic of Macedonia (2004), with Algeria and Croatia (2005), with Bosnia (2008) and Albania (2009). In the last two years, such agreements were signed with Colombia, Peru, South Korea (with provisional status), Montenegro and Serbia.
Investment protection treaties have been signed with 72 countries.
Spain also has an ample network of 87 conventions to avoid double taxation . Its convention network makes Spain not only an attractive jurisdiction to invest in, but also through it.
Spain has signed 17 Information Exchange Conventions.
91-93 Rambla Catalunya, 4th floor, office 4
Phone: +34 93 487 0345
24 Monte Esquiza Street, 6th floor, left
Phone: +34 91 781 1660