Bangladesh & Spain

Spain is one of the most open countries to foreign investment in the world. According to the FDI Regulatory Restrictiveness Index ranking, issued by the OECD, Spain is the ninth country with the fewest regulatory restrictions on foreign investment. In Spain, foreign investors are accorded exactly the same treatment as Spanish investors, with no discrimination regarding the type or size of the investment.

As the OECD explains in the Index, there is a direct link between the absence of restrictions on foreign investment and the volume of inward foreign investment. In fact, Spain places eighth in the world ranking of countries with the greatest stock of inward foreign investment (Source: UNCTAD).

Foreign investment in Spain involves over $US 720 billion. There are now over 12.000 foreign multinational companies based in Spain from all sectors, especially those with higher value added such as ICT, Automotive, Biotechnology, Chemicals, Logistics, e-Commerce, Healthcare, Aerospace, Nearshore or Business Services, Consumer goods or Tourism.

In recent years, Spain has been EU largest recipient of foreign investment along with the UK. In fact, productive foreign direct investment amounted to 21.7 billion euros in 2015, 11% up on 2014 (19.6 billion), according to the Investment Register of the Ministry for Economy and Competitiveness.

One of the main drivers of this attractiveness is the potential end expected growth of the Spanish Economy, as described above.

The Spanish market size is another key factor to attract international investors. The Spanish domestic market is one of the biggest in Europe with more than 46 million of consumers with a high GDP per capita and an additional injection of demand coming from the 65 million tourists who visit the country every year. Indeed, Spain is the world’s 14 th largest economy in terms of GDP and 5 th largest in the European Union. In terms of purchasing power, the Spanish market is larger than many of the more consolidated and dynamic emerging economies.

With this as a basis, Spain has a highly developed business sector. There are a number of Spanish companies established all over the world and with international acclaim, with the experience and capacity necessary to become partners in all type of international projects throughout the world.

For these reasons, Spain stands as an attractive platform for international business operations in third countries. As a member of the EU it offers entrepreneurs the opportunity of an easy access to the worlds’ biggest free market area. This means potential investors can benefit from European aid programs, a single currency, no intra-Community tariffs and free movement of goods and services, capital and people.

Furthermore, the Spanish geographical location allows an easy access to markets in the whole of the Mediterranean area, northern Africa and Middle East. Its business, economic, historic, linguistic and cultural ties with Latin America also allow a suitable access to these countries. Spain has signed Double Taxation treaties with 93 countries that represent more than 95% of the world´s GDP, in addition to more than 70

Agreements for the Promotion and Reciprocal Protection of Investments.

Companies setting up in Spain also have the added guarantee of favourable access to all international markets and all the corners of the national territory, thanks to the modern logistics and infrastructure network which has been put in place. Spain is the

European leader in terms of the length of its highways and the number of kilometers in

use of its high-speed rail lines. Additionally, it houses 3 of Europe’s 10 largest container ports (Valencia, Algeciras, and Barcelona) and two of Europe’s 10 busiest passenger airports (Madrid and Barcelona).

As a result of the increasing attractiveness of the Spanish economy as a platform for international business, Spanish exports are growing substantially. Spanish exports of goods grew by 4.3% compared to those recorded in the previous year, reaching the highest-ever figure on record. In the last few years, Spanish exports of goods and services have risen steadily in terms of GDP. According to Eurostat, the weight of exports in GDP has increased from 21.9% in 2009 to 33.5% by 2015 greater than in Italy, France or the United Kingdom.

In addition, Spain provides international Investors falling taxation costs. Corporate Income Tax is at 25%. Moreover, it is noteworthy that the average effective corporate tax rate is much lower at nominal rates due to the interesting tax incentives companies can apply. Among these tax benefits we can highlight those which may be applied by companies that carry out R & D.

The OECD considers these benefits as the most beneficial among developed countries, as is the patent box regime, which exempts from corporate tax 60% of the net income earned by the assignment of patents and other intangibles.

Among the tax benefits in the Corporate Tax regulations is a tax incentive for newly created companies. New Companies will be taxed at the rate of 15% in the first tax period in which the tax base is positive and in the next.

Spain also offers a wide range of grants and incentives for investment available at European, national, regional, and local levels available to foreign companies established in Spain on equal terms with firms owned by Spanish capital. This means companies established in Spain can access the program of regional incentives, which involve financial grants for productive investment to encourage entrepreneurship which, by directing their location toward predetermined areas and depending on the area chosen, can range from 10% to 55%.

Spain also offers international companies a comprehensive social security system and high living standards and a well-educated and highly skilled workforce. Spain has three business schools in the top 20 in the world, according to the main international rankings of the sector.

Also noteworthy is the fact that Spain has a beneficial tax regime for impatriates in which any foreign worker who resides in Spain for employment reasons can choose to be taxed under Individuals Income Tax or Non-Resident Income Tax (which has the competitive flat tax rate of 24%). Another fiscal incentive for the internationalization of companies established in Spainis the participation exemption regime, by which dividends and capital gains are exempt from tax if received by a Spanish entity (on equal terms if the company is owned by foreign or Spanish capital) that holds at least 5% of the share capital or equity of a foreign entity for a continuous period of at least one year.