With the rise of global asset allocation, more and more high-net-worth individuals choose to invest in Spain. What they see is nothing more than the opportunities brought about by Spain's economic development and superior investment environment. Spain's investment environment continues to improve after emerging from the financial crisis.
Strategic location and wide investment scope
Spain is located at the junction of Europe and Africa, so Spanish companies can not only enter their already very strong and attractive Spanish domestic market, but also radiate to the EMEA region (i.e. Europe, the Middle East and North Africa) and Latin America.
Additionally, Spain is uniquely positioned to trade with Latin America due to similarities in language and culture, serving as a hub between foreign investors and Latin American countries, reducing investor issues you may face when investing directly in these countries.
GDP growth, economic recovery
Spain’s GDP grew by 3% in 2017, employment growth was high, and the unemployment rate dropped by 3 percentage points. Inflation has remained broadly low and the current account balance sheet is once again in positive balance.
The service industry is an important source of new jobs, and the recovery of Spain's service industry is also obvious. Spain's service industry PMI fell to the recession zone of 40% during the European debt crisis . It recovered to a high of 57% in 2017 and has been in expansion territory for 45 consecutive months.
Spain maintained a strong recovery in 2018 and was more balanced than in previous expansion cycles. Economic growth in the first quarter of 2018 was 0.7%, according to an April 27 assessment by the Spanish National Institute of Statistics.
The tourism industry is developing rapidly, and income continues to increase.
Spain is a major tourist country, attracting tens of millions of tourists for vacation and shopping every year. Spain has broken its own tourism record for the seventh consecutive year, according to the Spanish Ministry of Tourism, Energy and Tourism. In 2017, the World Economic Forum released the latest world tourism competitiveness ranking, with Spain’s tourism industry ranking first in the world.
Spain attracted a total of 75.6 million foreign tourists in 2016, an increase of 10.3% over 2015, setting another record high. There were 82 million visits in 2017, a 9% increase from the previous year. Spanish tourism revenue rose 12% to 87 billion euros.
Relax lending thresholds to promote the development of the real estate industry
The European Union implements a loose monetary policy, continues to purchase government bonds, and implements zero interest rates on currency loans in various countries. With strong support from the European Union, the Spanish banking industry continued to maintain ultra-low interest rates in 2018 and relaxed the threshold for applying for loans.
Banks have relaxed lending thresholds. Low-interest loans are very beneficial to housing loans and will continue to promote the development of the Spanish real estate industry. According to data released by Tinsa, a well-known multinational real estate appraisal consulting company, on May 8, 2018, the price of Spanish finished houses (new and second-hand houses) in April 2018 increased by 5.4% compared with April 2017.
implements loose foreign investment policies and provides tax incentives
Spain has almost no restrictions on foreign investment, but only carries out certain controls and audits. Foreign investors can carry out business activities in the form of joint-stock companies, limited liability companies, branches, representative offices, etc., and enjoy the same treatment as local investors in Spain.
After the economic crisis , the Spanish government gradually implemented policies to attract foreign investment, such as tax incentives, financial subsidies and real estate donations for foreign investors, as well as more investment incentives for private enterprises. Spain implements a unified corporate income tax system for foreign companies operating locally, and applies a lower corporate income tax rate to small and medium-sized enterprises.
In addition, the " Corporate Income Tax Law " has formulated a series of relief measures aimed at avoiding double taxation and encouraging corporate investment. Currently, Spain is the second largest recipient of foreign direct investment and the third largest investor in the EU.
Today, Spain has become an investment destination attracting the attention of high-net-worth individuals around the world, and its unique investment environment is indispensable.
