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Spain: Country and Foreign Investment

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Spain Geography

Spain lies in the south-west of Europe and runs from the Pyrenees in the north to the straits of Gibraltar in the south. It covers an area of nearly 195,000 square miles, and consists of 50 provinces in 17 autonomous regions.

The Spanish mainland has at its heart the Meseta Central ("Inner Plateau"), which is surrounded by mountains. The Balearic and the Canary Islands, the two autonomous cities of Ceuta and Melilla in North Africa, and the Islas Chafarinas, Penon de Alhucemas and Penon de Velez de la Gomera off the coast of Morocco make up the remainder of Spain as a whole.

Spain has borders with Portugal, France, Andorra, Morocco and the British province of Gibraltar.

Natural resources include coal, copper, fluorspar, gypsum, iron ore, kaolin, lead, lignite, magnesite, mercury, potash, pyrites, sepiolite, tungsten, uranium and zinc.

Madrid is the capital city. Other large cities include Barcelona, Valencia and Seville.

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Spain History, Population, Language and Culture

Spain commanded a large empire built up with the aid of a powerful shipping fleet in the 16th and 17th centuries. The industrial revolution was not fully embraced in Spain and subsequently countries such as the UK, Germany and France became the major players in industry.

Spain remained neutral during the First and Second World Wars but a bitter civil war saw Spain in turmoil from 1936 to 1939. General Franco overthrew the Republican Government and led Spain under a dictatorship until his death in 1975.

Franco’s death was followed by a transition to democracy and rapid economic growth. Spain joined the EU in 1986.

Spain’s population is over 40.5 million and the official language is Castilian Spanish. Around 94% of Spaniards are Catholic.

A number of ethnic groups have kept their own identity both in customs and language. The main groups are the Catalans, Galicians and Basques. The terrorist group ETA, campaigning for a separate Basque homeland, continues its violent struggle to this day.

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Spain Government

Spain is a parliamentary monarchy with King Juan Carlos I as Chief of State. After elections, the monarch proposes the leader of the majority party as Prime Minister who is then elected by the National Assembly.

The bicameral parliament consists of the Senate (comprising 264 seats – 208 members elected by popular vote, plus 56 members appointed by the regional legislatures) and the Congress of Deputies (comprising 350 seats – the 50 electoral provinces each has at least two seats, Ceuta and Melilla have one seat each, and the remainder are determined by proportional representation based on popular vote on block lists who serve four-year terms).

The Senate and Congress of Deputies together form the National Assembly. The next elections are to be held in 2012.

The current Prime Minister is Jose Luis Rodriguez Zapatero.

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Spain Economy and Currency

The credit crunch and collapse in real estate in 2008 has had a devastating effect on Spain and unemployment (as at March 2010) is at nearly 20%. Having experienced growth of around 3.6% of GDP in 2007, by comparison growth fell by 3.6% of GDP in 2009. GDP per capita in 2009 was approximately USD33,700.

In March 2010, the government announced new incentives for the building and real estate industry in the hope of reviving the market.

Spain’s tourism industry, a major contributor to its GDP, has declined in the last few years. This is partly due to the world economic crisis but also to higher holiday and general costs in Spain that are making many tourists opt for destinations outside the Euro Zone.

The currency is the Euro (EUR).

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Spain Entry and Residence

EU nationals do not require a visa to enter Spain and can register with the national employment office. An individual then has 90 days in which to find employment; the employment contract must be produced when applying for a resident’s card.

Non-EU nationals must apply for a visa to enter Spain and must have a work permit prior to commencement of any employment.

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Spain Business Environment

Spain has a large tourism industry and is a well-developed nation with excellent transport links. It has 47 airports, Madrid and Barcelona being the main international hubs. There are 44 ports located on the Atlantic and Mediterranean coasts, making Spain the fourth largest sea freight transporter in Europe, behind the UK, the Netherlands and Italy. It is also the main European hub for Central and South America, giving access to over 562 million consumers.

More than 11,000 foreign-owned companies are based in Spain, 50 of them Fortune 100 companies. Spain is ranked sixth in the world for FDI flow.

Spain considers itself to have a highly skilled workforce and is ranked fourth in Europe in terms of workforce to education ratio. Spanish labour laws are very strict and it is almost impossible to dismiss a permanent member of staff. Working hours are rigorously regulated and salary costs are considered high.

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Spain Investment Incentives

There are a number of investment incentives available in Spain. They include the Technology Fund that was created by the European Union to promote research, development and innovation in Spain between 2007 and 2013. In addition, there are grants and incentives available locally for certain businesses or in locations with high unemployment.

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