Tagarchief: Spain

How do Spain and the Netherlands perform in the Global Competitiviness Report

The World Economic Forum Global Competitiveness Report is an annual assessment of the factors driving productivity and prosperity in 140 countries.

How are Spain and the Netherlands performing and what are their strongest and weakest pilars that build their competitive economy?

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It’s Getting Better For Startups In Spain

Once again Spain ranked as one of the worst countries in OECD on which to start a business. A report by the World Bank Group states that Spain is among the bottom five counties of the 34 OECD countries, with only Germany, Austria, the Czech Republic and Poland with a worse place to start a company.

The report state that entrepreneurs in Spain often face complexity in setting up shop. One of the main challenges is to deal with many different levels of government, including the national government, the regions, the provinces and the municipalities, that may have different legislation and requirements.

Overall the report places Spain at number 33rd globally in regards to ease of doing business in general.
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How to Find Work in Spain

Spain is slowly clawing its way back from a crippling financial crisis and is experiencing surges in several sectors, even encouraging entrepreneurs to set up shop in Iberia.

It’s a common misconception that teaching English is the only job you can find as a native English speaker in Spain. While it certainly is a way to a paycheck, there are other jobs for the ambitious expat in IT, customer care, marketing and social media, and even health care. Many expats who have secured a residency visa are also entering the world of the ‘autonomo’ or self-employed worker.

Spain’s job market and manner of looking for employment is likely different than your home country. Lees verder

Tax minimization in Spain

The foreign entrepreneurs who are performing businesses in Spain should know that there are a few legal methods to minimize the taxes they have to pay to the Spanish public budget. Before applying the minimization method, it is necessary to determine the residency of the foreign investor and its company and if there are certain double taxation treaties signed between Spain and his/her country of residence.

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Private equity investment opportunities in Spain

Over the last months you may have seen articles in the press stating that Spain is doing well again. Several private equity houses have opened offices in Madrid or are strengthening their teams and meanwhile, the Spanish government announces that the crisis is over, or at least that there is light at the end of the tunnel.

Some of this is true. The activity of foreign buyout firms is increasing. HIG is building up its presence and Apollo just won the purchase of NBG, the combination of former savings banks in Galicia, in competition mainly with other firms.

However, part of the news seems to be wishful thinking. It is true that the shrinking of the economy seems to have stopped, as shown by the Xmas shopping and subsequent sales period, which seem to have been better than last year. Car sales are also somewhat recovering: January 2014 closed at the same level as in 2008.

But at aggregate level, the growth of GDP is in the range of 0.1 per cent and unevenly spread over the country. Furthermore, the volume of new debt issues by the Spanish government is far above repayment. So the total public sector debt, today at nearly 100 per cent of GDP, continues to grow at a significant pace. Meanwhile, the reduction of the public budget deficit is slow. Even without considering the consequences of a possible Catalan independence on debt and deficit, this is a worrying situation.

And last but not least, unemployment remains at an extremely high level of over 25 per cent of the active population, second only to Greece in Europe.

Meanwhile, mid-market corporate Spain is not doing to bad and is creating investment opportunities. The companies that have survived the now five years of crisis are often in fairly good shape, efficient and not too indebted. Many have survived by growing in export markets and thus are now less dependent of their home market, but if the Spanish market starts growing again, their growth potential may be significant.

This growth will generate opportunities for mid-market funds, mainly because the banking system is still struggling with the digestion of the real estate bubble. The rate of nonperforming loans is in the range of 13 per cent. And the drain on the financial system by the government reduces the availability of funds for the private sector. Therefore, growth must be funded either by the cash flow generated by the companies, or by private investors.

However, if you are a foreign private equity or private debt investor, before buying a ticket to come and have a look at what is going on, you must bear in mind that mid-market Spain is different in size from the mid-market elsewhere. Even if we would be looking at “lower” mid-market (let’s say companies with Ebitda in the range of €3-8m, which is where international financial investors normally start showing some interest) there are not too many of them. And even most of the Spanish PE funds would not go below this.

It is not easy for an industrial firm with sustainable Ebitda in the range of €1-3m to raise capital, because they do not fit in the investment criteria of the equity or debt funds. These are the “lost” companies. At a lower level, start-ups and second rounds, the situation is better, because this segment is covered by a combination of private-public VC firms, business angels and similar investors.

This mismatch is size creates a huge opportunity for investors who would specifically focus on the “below lower mid-market” segment. The companies in this segment are looking for finance to grow, so these deals will often been structured as “money-in” deals, either in shares, but for this segment, private debt, convertible or not, can be an excellent option. These will not be huge deals, but they will also not require huge resources to perform and they will have an excellent reward, compared with the level of risk involved.

Another option would be to actively be looking for add-ons for current portfolio companies. In this case, however, the seller is likely to be preparing his retirement and deals will be 100 per cent purchases, occasionally with reinvestment by management of younger family members.

One of the complaints by many private equity investors with experience in Spain is that there are too few deals. My view is that there are lots of potential deals, but not in the segment where most investors are looking.

Source: by Maarten de Jongh, managing partner at Spanish advisory firm Norgestion

People inside an employment office in Jaén. / EFE

Unemployment in Spain falls for sixth straight month as workforce grows by 84,000

Official unemployment figures fell 0.35 percent in March, representing the sixth consecutive month of decline. The total official number of jobless people in Spain now stands at 4,795,866.

Meanwhile, 83,984 people were added to the Social Security rolls, representing a monthly increase of 0.52 percent. This figure is taken to represent the formal workforce.

Year on year, the workforce grew 0.71 percent and jobless claims fell 4.75 percent, a decline without precedent since June 2000, according to figures released on Wednesday by the Labor Ministry.

The good news had already begun in February, which registered a year-on-year rise in new hires for the first time since the beginning of the troubles in the labor market.

In yet another sign of the slow recovery in employment, seasonally adjusted additions to Social Security also grew for the seventh consecutive month. This job creation coincides with growth forecasts for the Spanish economy.

Broken down by area, unemployment fell in 13 regions, particularly Valencia, Catalonia and Galicia, and rose in four, chiefly Andalusia and the Basque Country. By sector, joblessness grew in agriculture and fell in industry, construction and services.

The official jobless rate in Spain in the last quarter of 2013 was 26 percent.

 

Fuente: El País

Record number of start ups in Madrid

In 2013, a total of 12,093 new businesses started in Madrid. This represents an increase of 5.2% compared to 2012. Madrid is followed by Barcelona (6911), Valencia (2269), Seville (1852) and Zaragoza (1218). As such, Madrid created more startups than the Barcelona, Valencia, Seville and Zaragoza together.
These positive figures show a change in the economy. The rise of new companies in Madrid are the result of incentives for enterprises of the Community of Madrid and the attraction of investment capital.

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Income from foreign tourists hit record levels; a significant contribution to the Spanish economy

Spain announced recently it has retaken the number three spot in world tourism in 2013, overtaking China by luring a record 60.6 million international visitors.

Foreign tourist arrivals surged by 5.6% in the year, the government said, boosting the Eurozone’s fourth largest economy after a long, job-wrecking recession.

”The new figures for 2013 allow our country to retake the number three position in this indicator after having overtaken China,” Prime Minister Mariano Rajoy boasted.

Spain now stood behind only France with 83 million international tourist arrivals and the United States with 67 million, Rajoy said.

Income from foreign tourists hit record levels, too, a significant contribution to the Spanish economy, which has just emerged from five years of stop-start recession that left the nation with a 26% unemployment rate.

Spending by international tourists in the first 11 months of 2013 surged by 8.7% from the same period last year to Euro 55.9bil (RM254.27bil), government figures showed.

Even without the official figures for the whole year, it is already possible to say that 2013 was a record in terms of tourism spending, Rajoy said.

”The implications of these figures are clear to everyone,” Rajoy said.

The tourism industry accounted for 10.9% of Spain’s total economic output in 2012, and 11.9% of all jobs, the prime minister said.

British tourists led the way to Spain in 2013, with some 14.3 million of them accounting for 23.6% of all foreign tourists, said the report by Spain’s Industry, Energy and Tourism Ministry.

Next came Germany with 16.2% of the total, France with 15.7%, and Nordic countries with 8% .

Russian tourists accounted for 2.6% of the total, but their numbers showed the biggest leap, soaring by 31.6% from the previous year.

The top destinations in Spain were Catalonia, which drew 15.5 million foreign visitors, or 25.7% of the total, followed by the Balearic Islands such as Majorca with 11.1 million international arrivals, or 18.3% of the total.

Spanish tourism industry association Exceltur predicts the tourism industry will grow by 1.8% in 2014.

Besides Spain’s attractions, such as its beaches, the tourism industry said it benefited last year from misfortune in Egypt, where political turmoil scared away visitors.

Egypt lost 2.5 million tourists from June up to the end of the year, estimated Exceltur vice president Jose Luis Zoreda. “Curiously, Spain’s tourists grew by 3 million,” he added.

Many of the visitors diverted from Egypt were budget tourists, however, Zoreda said.

Spain’s economy emerged from a two-year downturn by posting 0.1% growth in the third quarter of 2013. The economy expanded by 0.3% in the final quarter, Spain’s prime minister said, confirming an estimate by his finance minister ahead of the release of official data.

The Spanish government is tipping an overall economic expansion of 0.7% in 2014.

AFP Relaxnews

OUT NOW! Newsletter Business Club Spanje/España (February issue)

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