Spain is a promising country with great potential for overseas investors. Since the Spanish economy bottomed out in 2013, many and varied companies have decided to take advantage of the upswing in the real estate market to make some money.
During the first half of 2018 alone, foreign investment in Spain stood at around 18,052 million euro, a figure 21% higher than that recorded the year before and 43% higher than the average for the last five years.
However, there are still a number of obstacles in the way of attracting more foreign capital in Spain, such as an unfavourable fiscal framework, a labour market that needs more flexibility or certain bureaucratic difficulties. According to the latest data from the World Bank, it is more difficult to do business in Spain than in Azerbaijan or Kazakhstan. In addition, Spanish investment exported abroad exceeds income, which could mean an imbalance for the economy now as we enter a time of global economic slowdown.
For these reasons, it no surprise that businesspeople are calling for certain measures to facilitate the arrival of new investors in the country:
1. Eliminate bureaucratic hurdles
It is one of the most common reproaches made by business owners to the Spanish Public Administration. They complain that it takes a long time and several procedures are necessary to get administrative approval for a new real estate project. According to the World Bank, it takes a total of 13 separate procedures and 147 days to obtain a building permit in Spain.
2. Create a more favourable fiscal framework
Employers are mainly proposing to reduce the social contributions they have to pay for their workers. According to a report by Spanish employers, Spain collects more taxes from social security payments than through personal income tax or VAT. It is one of the most expensive European countries to hire professional staff, and one of the top OECD countries in terms of the amount of corporate income tax, a tax that is applied on corporate profits.
3. Make the labour market more flexible
Although the labour reform launched by Mariano Rajoy’s conservative government in 2012 covered dismissals, employers continue to ask for lower costs, simplification of employment contracts and making the model closer to others such as the American or British. They are also asking for subsidies to encourage hiring and boost employment.
4. Encourage investment
Another of the most common demands among the business community is that investment be encouraged, for example, by creating incentives to invest in Research & Development (in 2017 spending on GDP stood at 1.2%, compared to 2.07% of the EU average), as well as the implementation of subsidies.
5. Increase training
One of the biggest problems that companies encounter is that they can’t find employees that fit their needs. For this reason, they ask for a higher level of qualification of the employees so that Spain can be on par with the leading countries worldwide.
6. Implementing the Single Market Law
The Single Market Act came into force at the end of 2013, but a Supreme Court ruling overturned it last year after its main articles were cancelled. What employers propose is a new centralised regulation that will allow companies based in Spain to offer their products and services anywhere in the country, avoiding local and regional regulations.
It's thought that all these measures could help draw more money from foreign investors to the Spanish mainland and islands, both in real estate and business, which a set to be promising markets in 2019 and future years.
From the original Spanish article: 8 medidas para que aumente la inversión en España de las empresas extranjeras, según los propios empresarios (Business Insider)