Ever since Spain bounced back from the financial crisis that slowed growth in the country between 2008 and 2014, its economy has been growing rapidly. .
Currently, Spain is also the third-largest recipient of greenfield projects in Europe. Combine that with an increase in industrial productivity, Spain has become quite the hot spot for North European countries to branch out company-wise.
In this article, we’ll explore which type of companies are opening an office in Spain or setting up an extension of their offices within the country – and why.
Keep reading to learn more.
Why Set Up branch, service center or shop in Spain?
Spain now has one of the fastest-growing economies in the world, sitting as the fourth-largest economy in the Eurozone. The country currently boasts a $1.3 trillion GDP and 46 million residents.
It’s also among the ten most attractive destinations in the world in terms of direct investments by foreign companies. As mentioned above, it’s one of the largest recipients of greenfield projects thanks to a lack of constraints, and with an increase in industrial productivity, opportunities for work are popping up left and right.
Additionally, Spain is in a very strong position in terms of solvency and credibility. The introduction of several expansive domestic structural reforms has led to an increase in labor flexibility as well as an increase in business growth—making the country a much more competitive and attractive setting when it comes to conducting business on a global scale.
Aside from Spain rising as a global economic power, there are several other reasons why more and more Nordic companies are setting up shop within the country.
Let’s take a closer look:
The Weather Is Better
The winter blues, aka winter depression or conditional depression, is a very common disorder in the Nordic countries. This typically results in a lot of sick days as well as a lack of motivation and productivity.
While Spain is a large country with a varying climate, its most populous cities such as Barcelona, Madrid, Malaga, and Valencia—to name a few—tend to see a lot more sunny days and warmer weather. This makes it an ideal relocation for companies in any country facing harsh winters.
The Cost of Living Is Lower
Compared to Nordic countries, the cost of living—as well as salaries— is much lower in Spain. However, that means that even for less money, residents and non-residents working and living in the country can take advantage of a better quality of life.
There are multiple studies and reports that demonstrate how Spain comes in second in the world for having an exceptional work-life balance. This is largely due to Spanish culture and the prioritization of devoting more time in a day to self-care and leisure.
For example, at least 16 hours per day is spent on essential things such as eating meals, meeting with friends and pursuing hobbies. Couple all of these things with the agreeable weather and it’s no wonder employees of multinational companies will choose a city like Barcelona to live and work in compared to other popular metropolises like London and Amsterdam.
The Healthcare System Is Excellent
Adding to the quality of life, aside from an ideal work-life balance, Spain also boasts solid public health-care system, as well as affordable private coverage.
Moreover, as the healthcare coverage is taken from taxed wages, there’s no need to worry about deductibles or copays. For those who don’t fall under the universal coverage umbrella, a regular doctor’s visit only costs about 52 euros, and general medications like antibiotics and cold medicine cost roughly 6.60 euros.
It’s in a Strategic Location for Trade Partnerships
Spain has a strong and strategic location that gives it access to not only the European markets but the Middle Eastern and North African markets as well. Additionally, Spain is a member of the European Union (EU), which grants the country privileged access to the world’s greatest common market.
The country boasts double taxation treaties with almost 100 countries. The treaty allows the nationals of these countries to avoid double taxation.
It’s a Gateway to Latin America
Spain isn’t just a strategic location for European markets. It’s also in a strong strategic position to branch out to key sectors in Latin America.
A network in Spain can facilitate market entry well within Latin American countries while also accelerating growth for North European companies. In other words, Spain acts as an international headquarters for Latin America—without ever having to set up shop in Latin America.
There’s a Strong Infrastructure
Along with its economy, Spain’s infrastructure has also grown rapidly over the past few decades. Now, the country has some of the world’s best public transportation between its rails and subways.
It’s also home to some of the world’s most robust maritime economies and a world-class port infrastructure. There are approximately 46 state-owned ports located throughout both of Spain’s coasts.
Innovation and Tech Disruption Are at an All-Time High
Spain, in general, has a knowledge-based economy that’s powered by a young and talented workforce.
Because of this, Barcelona, in particular, has become a hub for innovation, paving the way to multiple exciting opportunities for both local and foreign businesses and investments. The city is also the top ecosystem for tech startups, including Ulule, Typeform, Glovo, Badi, and more.
What Are the Challenges?
As a member of the European Union, there aren’t too many major obstacles or risks involved in opening an office in Spain or Relocating a business to Spain in its entirety.
For foreign businesses landing in Spain, the primary challenges are typically related to two things: The country’s bureaucracy—which is mostly a matter of understanding the laws and regulations regarding business—and the language barrier.
Many residents and citizens that live and work in the country’s major cities likely speak English, but it’s not a guarantee. Without at least some basic knowledge of the Spanish language, adjusting to a multicultural workplace may prove difficult.
The Type of Companies Moving to Spain
There are several types of companies relocating their businesses to Spain. However, keeping the country’s exploding technology sector in mind, you can expect to find companies both large and small that are able to employ remote workers for IT jobs, coding, logistics, service centers, help desks, digital marketing businesses, telemarketing, and more.
Product-based companies looking to expand their market globally are also relocating to Spain since it serves as a bridge between both the eastern markets and Latin America.
One example is Intrum; a Swedish company specializing in credit management services that recently opened its new global operating center in the city of Malaga.
According to the company’s general director, José Luis Bellosta, “Intrum wants to continue strengthening its position as a leader in credit management services worldwide. Malaga, due to its location, innovative and multinational character is the ideal place to install an operational center at an international level. To achieve this, we bet on the selection of the best talent and the development of our professionals so that they can provide the best service to our customers.”
As operations began in early June, the company projects that it will be able to employ over 250 workers, both national and international within the next two years. There are also plans to hire specialized talent to work as telephone advisors that will develop their work in several languages, including English, Swedish, Danish, Norwegian, and Finnish.
How to Expand Your Company into Spain
If you’re thinking about relocating your business to Spain (or starting a new one within the country), there are several steps you’ll need to take:
- Reality check: moving the business to Spain sounds great, but does it make sense economically?
- Tax and structural planning. Not only will you need to understand things like VAT tax rules, but you’ll also need to understand your responsibilities as an employer and business owner within the country
- Set up the infrastructure of the business. This includes finding and hiring qualified talent, finding a business location, and setting up your operations
- Take care of standard operating procedures. You’ll need to take care of the day-to-day obligations regarding the labor laws, social securities, tax declarations, accounting needs, and so on.
There’s a lot involved in relocating an office as well as yourself and employees. The last thing you’d want to deal with is any bureaucratic limitations that could keep you from moving forward.
That’s why it’s important to partner with the right team that can assist you with your relocation to Spain and walk you through the necessary steps to set up your business.
That’s where we come in.
Our team is located in Barcelona and includes English-speaking economists, real estate agents, lawyers, accountants, and more. Contact us today to learn more about how our team of relocation specialists can help you move your business to a more ideal location within Spain.