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Spain: Market Profile

Picture: Spain factsheet
Picture: Spain factsheet

1. Overview

Continuing fiscal consolidation, banking sector restructuring and structural reforms, particularly in the labour market, have been broadly positive for the Spanish economy. In addition, lower borrowing costs, declining unemployment and improving export prospects alongside a competitive euro have given consumers and businesses more confidence when making consumption and investment decisions. Nevertheless, base-broadening measures on corporate taxation, increases in excise duties on alcohol and tobacco and a wider base for social contributions may temper more expansionary fiscal policy orientation in the quarters ahead.

Sources: World Bank, Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

October 2017
Madrid imposed direct rule in Catalonia following the referendum on proposed regional independence.

June 2018
Prime Minister Mariano Rajoy lost a vote of confidence. Opposition leader Pedro Sanchez took over as premier in a minority government.

October 2018
The Spanish government abolished a tax on the solar industry and agreed to a deal with unions to shut down most of the country's remaining coal mines by the end of the year in return for regional investment over the next decade.

November 2018
The Spanish government set out its plan to invest massively in wind and solar power in the next decade in order to switch the economy entirely to renewable electricity by 2050.

December 2018
Regional elections held in Andalusia, Spain's largest region, resulted both in a breakthrough by a populist Vox party and the end of overall control of the region by the PSOE (socialist party), which had held power there since 1982.

The Council of Ministers approved the largest increase (22%) in Spain's minimum wage since 1977, which entered into force in January 2019. The UGT union estimated that 15% of wage earners will benefit, more than half of them women.

July 2020
The next general election will be held no later than July 26, 2020. The collapse in support for the traditional political parties makes the outcome highly unpredictable.

Sources: BBC country profile – Timeline, Reuters, The Independent, Fitch Solutions

3. Major Economic Indicators

Graph: Spain real GDP and inflation
Graph: Spain real GDP and inflation
Graph: Spain GDP by sector (2017)
Graph: Spain GDP by sector (2017)
Graph: Spain unemployment rate
Graph: Spain unemployment rate
Graph: Spain current account balance
Graph: Spain current account balance

e = estimate, f = forecast
Sources: IMF, World Bank, Fitch Solutions
Date last reviewed: March 1, 2019

4. External Trade

4.1 Merchandise Trade

Graph: Spain merchandise trade
Graph: Spain merchandise trade

Sources: WTO, Fitch Solutions
Date last reviewed: March 1, 2019

Graph: Spain major export commodities (2017)
Note: Unclassified Products account for USD14.3 billion of exports
Graph: Spain major export commodities (2017)
Note: Unclassified Products account for USD14.3 billion of exports
Graph: Spain major export markets (2017)
Graph: Spain major export markets (2017)
Graph: Spain major import commodities (2017)
Note: Unclassified Products account for nearly USD10.5 billion of imports
Graph: Spain major import commodities (2017)
Note: Unclassified Products account for nearly USD10.5 billion of imports
Graph: Spain major import markets (2017)
Graph: Spain major import markets (2017)

Sources: Trade Map, Fitch Solutions
Date last reviewed: March 1, 2019

4.2 Trade in Services

Graph: Spain trade in services
Graph: Spain trade in services

e = estimate
Sources: WTO, Fitch Solutions
Date last reviewed: March 1, 2019

5. Trade Policies

  • Spain is a member of the European Union (EU) which has a common set of tariffs and customs levied on various imports and exports. As such, the trade policy is largely identical to that of the wider regional bloc. The EU updated its trade policy (and, by extension, its import tariffs, customs, duties, and procedures) in 2017 and 2018.

  • The EU is party to some 50 free trade agreements (FTAs) and, consequently, access to other markets of the countries concerned is currently mediated through those agreements. The EU’s scheme on generalised system of preferences (GSP) entered into effect on January 1, 2014. Under the scheme, tariff preferences are removed for imports into the EU from countries where per-capita income has exceeded USD4,000 for four years in a row. Regarding Hong Kong, the territory has been fully excluded from the EU’s GSP scheme since May 1, 1998.

  • A number of mainland China-origin products are subject to EU’s anti-dumping (AD) duties, including bicycles, bicycle parts, ceramic tiles, ceramic tableware and kitchenware, fasteners, ironing boards and solar glass. As at end-December 2017, the EU did not apply any AD measures on imports originated from Hong Kong.

  • To combat the spread of the Asian long-horned beetle, in July 1999 the EU introduced emergency controls on wooden packaging material originating in the mainland China. Wood covered by the measures must be stripped of its bark and free of insect bore holes greater than 3mm across, or must have been kiln-dried to below 20% moisture content.

  • The EU has adopted a directive on the control of the use of nickel in objects intended to be in contact with the skin, such as watches and jewellery. The EU also adopted a directive to ban the use of some phthalates in certain PVC toys and childcare articles on a permanent basis, which came into effect from January 16, 2007. In addition, the EU has adopted a directive to prohibit the trading of clothing, footwear and other textile and leather articles that contain azo-dyes, from which aromatic amines may be derived.

  • The EU has adopted a number of directives for environmental protection which may have an impact on the sales of a wide range of consumer goods and consumer electronics. Notable examples include the Directive on Waste Electrical and Electronic Equipment (WEEE) implemented in August 2005, and the Directive on Restriction of Hazardous Substances (RoHS) implemented in July 2006. The WEEE was recast in 2012 and member states must adhere to higher collection/recycling targets (a 45% collection rate as of 2016 and 65% from 2019). The directive is also wider in scope, covering all electric and electronic equipment, while establishing producer responsibility as a means of encouraging greener product designs. In addition, the EU's new framework directive for setting eco-design requirements for energy-related products (ErP) is now in place. The ErP directive now covers any product that is related to the use of energy, including shower heads and other bathroom fittings, as well as insulation and construction materials.

  • REACH, an EU regulation which stands for Registration, Evaluation, Authorisation and Restriction of Chemicals, entered into force in June 2007. It requires EU manufacturers and importers of chemical substances to gather comprehensive information on the properties of these substances produced or imported in volumes of one tonne or more per year, and to register such substances prior to manufacturing in or importing into the EU.

  • Nine types of goods imported into the EU are subject to licensing. These goods are (broadly) textiles, various agricultural products, iron and steel products, ozone-depleting substances, rough diamonds, waste shipment, harvested timber, endangered species and drug precursors. Currently, no quotas are imposed on textiles and clothing exports or non-textile product exports from Hong Kong and the mainland China.

Sources: WTO - Trade Policy Review, Fitch Solutions

6. Trade Agreement

6.1 Multinational Trade Agreements


  1. The EU Common Market: The transfer of capital, goods, services and labour between member nations enjoy free movement. The common market extends to the 28 member nations of the EU, namely: Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.

  2. European Economic Area (EEA)-European Free Trade Association (EFTA) (Iceland, Liechtenstein, Norway and Switzerland): While it enhances trade flows between these countries and the EU, only Switzerland is a fairly major trading partner.

  3. EU-Turkey: The customs union within the EU provides tariff-free access to the European market for Turkey, benefitting both exporters and importers.

  4. EU-Canada Comprehensive Economic and Trade Agreement (CETA): CETA is expected to strengthen trade ties between the two regions, having come into effect in October 2016. Some 98% of trade between Canada and the EU is duty-free under CETA. The agreement is expected to boost trade between partners by more than 20%. CETA also opens up government procurement. Canadian companies will be able to bid on opportunities at all levels of the EU government procurement market and vice versa. CETA means that Canadian provinces, territories and municipalities are opening their procurement to foreign entities for the first time, albeit with some limitations regarding energy utilities and public transport.

  5. EU-Japan Economic Partnership Agreement: In July 2018, the EU and Japan signed a trade deal that promises to eliminate 99% of tariffs that cost businesses in the EU and Japan nearly EUR1 billion annually. According to the EC, the EU-Japan Economic Partnership Agreement (EPA) will create a trade zone covering 600 million people and nearly a third of global GDP. The result of four years of negotiation, the EPA was finalised in late 2017 and came into force on February 1, 2019 after the EU Parliament ratified the agreement in December 2018. The total trade volume of goods and services between the EU and Japan is an estimated EUR86 billion. The key parts of the agreement will cut duties on a wide range of agricultural products and it seeks to open up services markets, particularly financial services, e-commerce, telecommunications and transport. Japan is the EU's second biggest trading partner in Asia after China. EU exports to Japan are dominated by motor vehicles, machinery, pharmaceuticals, optical and medical instruments, and electrical machinery.

  6. EU-SADC EPA (Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland): An agreement between EU and SADC delegations was reached in 2016 and is fully operational for SADC members following the ratification of the agreement by Mozambique. The remaining six member of SADC no included in the deal (the Democratic Republic of the Congo, Madagascar, Malawi, Mauritius, Zambia and Zimbabwe) are seeking economic partnership agreements with the EU as part of other trading blocs – such as with East or Central African communities.

Provisionally Active

The CETA: The CETA is an agreement between the EU and Canada. CETA was signed in October 2016 and ratified by the Canadian House of Commons and EU Parliament in February 2017. However, the agreement has not been ratified by every European state and has only provisionally entered into force. CETA is expected to strengthen trade ties between the two regions, having come into effect in 2016. Some 98% of trade between Canada and the EU will be duty free under CETA. The agreement is expected to boost trade between partners by more than 20%. CETA also opens up government procurement. Canadian companies will be able to bid on opportunities at all levels of the EU government procurement market and vice versa. CETA means that Canadian provinces, territories and municipalities are opening their procurement to foreign entities for the first time, albeit with some limitations regarding energy utilities and public transport.

Ratification Pending

EU-Central America Association Agreement (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Belize and the Dominican Republic): An agreement between the parties was reached in 2012 and is awaiting ratification (29 of the 34 parties have ratified the agreement as of October 2018). The agreement has been provisionally applied since 2013.

Under Negotiation

  1. EU-Australia: The EU, Australia's second largest trade partner, has launched negotiations for a comprehensive trade agreement with Australia. Bilateral trade in goods between the two partners has risen steadily in recent years, reaching almost EUR48 billion in 2017, and bilateral trade in services added an additional EUR27 billion. The negotiations aim to remove trade barriers, streamline standards and put European companies exporting to or doing business in Australia on equal footing with those from countries that have signed up to the Trans-Pacific Partnership or other trade agreements with Australia. The Council of the EU authorised opening negotiations for a trade agreement between the EU and Australia on May 22, 2018.

  2. EU-United States (Trans-Atlantic Trade and Investment Partnership): This agreement was expected to increase trade and services, but it is unlikely to pass under the Trump administration in the United States against the backdrop of rising global trade tensions.

  3. EU-Vietnam FTA: In July 2018, the EU and Vietnam agreed on final texts for the EU-Vietnam FTA and the EU-Vietnam Investment Protection Agreement (IPA). As of January 2019, the final text of the agreement has been finalised and is awaiting signature and conclusion.

Sources: WTO Regional Trade Agreements database, European Commission, Bruegel, Fitch Solutions

7. Investment Policy

7.1 Foreign Direct Investment

Graph: Spain FDI stock
Graph: Spain FDI stock
Graph: Spain FDI flow
Graph: Spain FDI flow

Sources: UNCTAD, Fitch Solutions
Date last reviewed: March 1, 2019

7.2 Foreign Direct Investment Policy

  1. Spain is an open economy and is seeking to attract additional foreign investment, particularly to continue its recovery from the recent economic crisis. Spain's excellent infrastructure, large domestic market, well-educated workforce and export possibilities have attracted foreign companies in large numbers over the past three decades. With the aim of promoting investment, employment, competitiveness and economic growth, the Spanish government and all other public authorities have been developing and consolidating an extensive and complete system of aid instruments and incentives especially targeted at boosting employment, regional investment and at research, development and technological innovation. Financing from the Official Credit Institute (Instituto de Crédito Oficial or ICO) is widely available to promote investment into the country's key industries such as aerospace, automotive, biotechnology, pharmacy and life sciences, environment, ICT and chemicals.

  2. Registration requirements are straightforward and apply to foreign and domestic investments equally. They aim to verify the purpose of the investment and do not block any investment. On September 1, 2016 a new Resolution of the Directorate General for International Trade and Investments at the Ministry of Economy, Industry and Competitiveness came into force, under which new forms for declaration of foreign investments before the Investment Registry were established, where the person obliged to declare is the investor or company with foreign participation.

  3. Spanish law protects property rights and those of intellectual property. The government has amended the Intellectual Property Act, the Civil Procedure Law and the Penal Code to strengthen online protection. Spain offers investment opportunities in sectors and activities with significant added value. There were no major changes in Spain's regulations for investment and foreign exchange under the Popular Party (PP) administration, which held office from December 2016 until June 2018. Spanish law permits 100% foreign ownership in investments (limits apply regarding audio-visual broadcast licences) and capital movements are completely liberalised.

  4. Spanish law has adapted its foreign investment rules to a system of general liberalisation, without distinguishing between EU residents and non-EU residents. Law 18/1992 of July 1, establishing rules on foreign investments in Spain, provides a specific regime for non-EU persons.

  5. For EU residents, the only sectors with a specific regime are the manufacture and trade of weapons or national defence-related activities. For non-EU companies, the Spanish government restricts individual ownership of audio-visual broadcasting licenses to 25%. Specifically, Spanish law permits non-EU companies to own a maximum of 25% of a company holding a digital terrestrial television broadcasting licence and for two or more non-EU companies to own a maximum of 50% in aggregate. In addition, under Spanish law a reciprocity principle applies (article 25.4 General Audio-visual Law). The home country of the (non-EU) foreign company must have foreign ownership laws that permit a Spanish company to make the same transaction.

  6. Spain is a member of the Organisation for Economic Co-operation and Development (OECD), the World Trade Organisation (WTO) and the United Nations Conference on Trade and Development (UNCTAD).

  7. On August 1, 2014, the Spanish Council of Ministers approved three tax reform bills relating to personal income tax, corporate income tax and value added tax (VAT) that went into effect on January 1, 2015. Although the reforms generally reduced personal and corporate taxes in most categories, one of the new measures was an exit tax that applies to taxpayers who have had tax residency in Spain for at least 10 of the last 15 years and who own more than EUR4 million in relevant assets or more than 25% of a company worth more than EUR1 million. Although the measure seeks to combat offshore tax evasion, the provision has caused concern among Spanish entrepreneurs and foreign investors who believe that the reform will make it difficult for Spanish start-ups to relocate outside the EU, which can be essential for the growth of a new business.

  8. Spanish legislation has set up a series of safeguards to prevent the nationalisation or expropriation of foreign investment. Since the beginning of the economic crisis, Spain has altered its renewable energy policy numerous times, creating a high degree of regulatory uncertainty and resulting in losses to some foreign companies' earnings and investments. In December 2012 the government enacted a comprehensive energy sector reform plan in an effort to address a EUR30 billion energy tariff deficit caused by user rates that were insufficient to cover system costs.

  9. Spain has an extensive and comprehensive system of aid and incentives developed by the central government and other government bodies, with a special emphasis on promoting permanent employment, productive investments and research, development and technological innovation.

  10. Spain is the main gateway for Latin American companies into the European market. Latin American foreign direct investment in Spain is EUR39.5 billion, rising to EUR57 billion if investments in holding companies or entities holding foreign securities are included. Mexico is the leading Latin American investor in Spain.

Sources: WTO – Trade Policy Review, ITA, ICEX

7.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
Main free zones: Ceuta and Melilla free zone, Cadiz, Vigo and Canary Island free zonesBoth the mainland and islands (and in most Spanish airports and seaports) have numerous free trade zones where manufacturing, processing, sorting, packaging, exhibiting, sampling and other commercial operations may be undertaken free of any Spanish duties or taxes. The largest free trade zones are in Barcelona, Cadiz, and Vigo, and the entire province of the Canary Islands is a Special Economic Zone. Others vary in size from a simple warehouse to several square kilometres. Spanish customs legislation allows companies to have their own free trade areas. Duties and taxes are payable only on those items imported for use in Spain. These companies have to abide by Spanish labour laws. These zones offer benefits such as a reduced corporate tax rate (of 4%), reduced VAT (7%), as well as transfer tax and stamp duty exemptions.
Government bodies- Spain’s central government provides numerous financial incentives for foreign investment, generally designed to complement EU financing.

- Spain provides certain subsidies for job training and job creation, although they have been recently reduced due to budget constraints.

- Projects designated as Investment and Employment may be eligible for further subsidies from the Government Public Employment Service (formerly the National Employment Institute).

- Labour law reforms adopted in 2012 increased hiring bonuses for youth and long-term unemployed.

- In 2014, the Council of Ministers approved a royal decree-law to promote employment and permanent contracts with a new ‘flat rate’ for Social Security contributions. The measure applies to contracts signed after February 25, 2014.
Spain’s 17 regional governments, known as autonomous communities, provide additional incentives for investment in their region. Many are similar to the incentives offered by the central government and the EU, but they are not all compatible.The regional governments are responsible for the management of each type of investment. No investment project can receive other financial aid if the amount of the aid granted exceeds the maximum limits on aid stipulated for each approved investment in the legislation defining the eligible areas. The subsidy received is compatible with other aid, provided that the sum of all the aid obtained does not exceed the limit established by the legislation of demarcation and EU rules do not preclude it (incompatibilities between Structural Funds).

Types of incentives available: financial loans and subsidies; exemption from certain taxes; preferential access to official credit; reduction of burdens; bonuses for acquisition of certain material; customs exemption for certain imported goods; real estate grants and gratuitous or favourable land grants; guarantees granted in credit operations, loans with low interest, long maturities, and grace periods; guarantee of dividends; professional training and qualification; indirect aid by means of supplying infrastructure facilities.
MunicipalitiesMunicipal corporations may offer incentives to direct investment by facilitating infrastructure needs, granting licenses, and allowing for the operation and transaction of permits. Municipalities such as Madrid offer numerous support services for potential foreign investors. Local economic development agencies often provide free advice on the local business environment and relevant laws, administrative support, and connections to human capital in order to facilitate the establishment of new businesses. Spain recently made starting a business easier by eliminating the requirement to obtain a municipal license before starting operations and by improving the efficiency of the commercial registry.
Research and Development (R&D)- Incentives from national, regional or municipal governments and the EU are granted to Spanish and foreign companies alike without discrimination. These incentives include most notably those aimed at fostering innovation, technological improvement (TI) and R&D projects, which have been one of the main priorities of the Spanish authorities in recent years.

- The Science, Technology and Innovation Law 14/2011, of June 1, 2011, establishes the legal framework for the fostering of scientific and technical research, experimental development and innovation in Spain. In 2013 the Council of Ministers approved ‘the Spanish Strategy for Science and Technology and for Innovation’ for the 2013-2020 period, whose essential purpose is to promote the scientific, technological and business leadership of the country as a whole and to increase the innovation capacities of the Spanish company and the Spanish economy. The beneficiaries may be individuals, public research agencies, public and private universities, other public R&D centres, public and private health entities and institutions related to or assisted by the National Health System, certified health research institutes, public and private non-profit entities (foundations and associations) engaging in R&D activities, enterprises (including SMEs), state technological centres, state technological and innovation support centres, business groupings or associations (joint ventures, economic interest groupings, industry-wide business associations), innovative business groupings and technological platforms, and organisations supporting technological transfer and technological and scientific dissemination and disclosure. The aid can take the form of subsidies, loans, venture capital instruments, and other instruments (tax guarantees and incentives).

Sources: Spanish government sources, Invest in Spain, Fitch Solutions

8. Taxation – 2019

  • Value Added Tax: 21%
  • Corporate Income Tax: 25%

Sources: Spanish Ministry of Finance, Fitch Solutions

8.1 Important Updates to Taxation Information

In recent financial years the general state budgets have significantly amended Spanish law on the taxation of companies, with increases to the percentages and limits applicable to tax credits for investments in cinematographic productions, audio-visual series and live performances of performing and musical arts. A special tax regime is applicable in the three provinces of the Basque Country, whereby corporate income tax from January 1, 2019 will be 24% and 20% for companies with a net turnover of less than EUR10 million.

8.2 Business Taxes

Type of TaxTax Rate and Base
Corporate Income Tax25%; A lower rate of 15% applies to newly formed companies and the first two years in which they obtain a taxable profit. This rate is not applicable to newly created companies that are part of a national or international group.
Capital Gains Tax25%
Transfer Tax
A tax of between 5% and 11% – varying according to region – that is levied on inter vivos transfers, including real estate.
Stamp dutyA tax levied on notarial instruments and commercial administrative documents, including real estate. The rate is usually between 0.75% and 1.5%, but varies according to the region.
Withholding Taxes19% each on dividend income, interest and royalties (24% on royalties if the corporation/individual is from a non-treaty country), which may be reduced if a double taxation agreement exists. For example, Hong Kong has a treaty limiting these rates to 10%, 5% and 5%.
Branch Remittance Tax19%
VATStandard rate of 21%; A reduced rate of 4% applies to basic necessities such as bread, milk and medicine. A rate of 10% applies to dwellings, live cultural events and any food or agricultural products not reduced to 4%.

Sources: Spanish Ministry of Finance, Fitch Solutions
Date last reviewed: March 1, 2019

9. Foreign Worker Requirements

9.1 Foreign Worker Permits

Non-EU member citizens require a work permit in order to work within the country; EU member citizens do not require a work permit, but their employer must inform the job office about their appointment. Citizens of the EEA (with EU member states, Iceland, Norway and Lichtenstein and Switzerland) do not require a visa to enter, reside or work in the country. No work permit is needed by foreigners from outside the EU if they have a permanent residence or family reunion permit, have been granted asylum, study in the country or have a Green Card or a Blue Card.

9.2 Green Card

The Green Card system only applies to citizens from the following nations: Australia, Montenegro, Japan, Canada, South Korea, New Zealand, Bosnia and Herzegovina, Macedonia, United States, Serbia, and Ukraine. The Green Card simplifies entry to the job market for foreigners who have qualifications for which the state has a job opening in register of jobs suitable for green cards. The permit is for long-term residence for employment purposes.

9.3 Blue Card

The Blue Card is intended for any stay associated with highly qualified employment. A foreigner holding a Blue Card may reside in the country and work in the job for which the Blue Card was issued, or change that job under the conditions defined. High qualification means a duly completed university education or higher professional education which has lasted for at least three years. The Blue Card is issued with a term of validity three months longer than the term for which the employment contract has been concluded, but for a maximum period of two years. The Blue Card can be extended.

9.4 Short-Term Work Visa

Short-term work visas can be granted by the embassy upon an application for a maximum period of 90 days, which can be used within 180 days.

9.5 Localisation Requirements

After arrival in Spain a foreign worker must apply within 30 days for a Foreigner's Identity Card number (NIE) through the local Oficina de Extranjeros (Foreigner's Office) or police station. The NIE is needed for all financial and administrative procedures. Everyone must also register with the Spanish Social Security authorities, although if you are an employee (instead of self-employed) your employer will do this.

9.6 Visa/Travel Restrictions

Non-EU/EEA/Swiss nationals staying longer than three months must apply for a long-term national visa. There is a residence visa for family reunification or retirement, a student visa for the duration of a course, and a combined residence and work visa that allows you to live and work in Spain.

Sources: Ministry of the Interior of Spain, Visa on Demand, Fitch Solutions

10. Risks

10.1 Sovereign Credit Ratings

Rating (Outlook)Rating Date
Baa1 (Stable)13/04/2018
Standard & Poor'sA- (Positive)
Fitch Ratings
A- (Stable)11/01/2019

Sources: Moody's, Standard & Poor's, Fitch Ratings

10.2 Competitiveness and Efficiency Indicators

World Ranking
Ease of Doing Business Index
Ease of Paying Taxes Index
Logistics Performance Index
Corruption Perception Index
IMD World Competitiveness34/6336/63N/A

Sources: World Bank, IMD, Transparency International, Fitch Solutions

10.3 Fitch Solutions Risk Indices

World Ranking
Economic Risk Index RankN/A53/20253/202
Short-Term Economic Risk Score
Long-Term Economic Risk Score62.364.465.4
Political Risk Index RankN/A44/20245/202
Short-Term Political Risk Score
Long-Term Political Risk Score76.974.974.9
Operational Risk Index RankN/A23/20121/201
Operational Risk Score72.672.172.5

Source: Fitch Solutions
Date last reviewed: March 1, 2019

10.4 Fitch Solutions Risk Summary

The Spanish economy will grow at a modest pace over the years out to 2027, slightly above the eurozone average. Economic growth in Spain has been boosted in recent years, in part due to a process of internal devaluation and labour market liberalisation helping to restore some of Spain's competitiveness, as well as low base effects stemming from the 2007-2008 financial crisis. The previous government implemented a number of labour market reforms, which significantly improved Spain's competitiveness profile, boosting profit margins and confidence levels across the corporate sector, leading to rising levels of capital expenditure and productivity. These reforms have also supported exports, helping to drive Spain's current account into surplus.

Competitive average minimum wages (the eighth-lowest among developed states), a highly urbanised and large population, the 35th-highest concentration of tertiary educated workers comprising a high number of science and engineering graduates, and a good utilities profile and transport network all encourage high value added activity, which bodes well for long-term investment.

Source: Fitch Solutions
Date last reviewed: March 1, 2019

10.5 Fitch Solutions Political and Economic Risk Indices

Graph: Spain short term political risk index
Graph: Spain short term political risk index
Graph: Spain long term political risk index
Graph: Spain long term political risk index
Graph: Spain short term economic risk index
Graph: Spain short term economic risk index
Graph: Spain long term economic risk index
Graph: Spain long term economic risk index

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Economic and Political Risk Indices
Date last reviewed: March 1, 2019

10.6 Fitch Solutions Operational Risk Index

Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Spain Score72.5
Developed States Average73.263.371.376.3
Developed States Position (out of 27)17
Global Average49.649.749.9
Global Position (out of 201)21

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index

Graph: Spain vs global and regional averages
Graph: Spain vs global and regional averages
Operational Risk Index
Labour Market Risk Index
Trade and Investment Risk IndexLogistics Risk
Crime and Security Risk Index
United Kingdom77.772.178.878.581.3
New Zealand77.573.075.472.189.4
United States76.979.075.382.970.5
Isle of Man64.062.062.449.382.3
Developed Markets Averages73.263.371.376.381.8
Global Markets Averages49.649.749.949.049.8

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: March 1, 2019

11. Hong Kong Connection

11.1 Hong Kong’s Trade with Spain

Graph: Major export commodities to Spain (2018)
Graph: Major export commodities to Spain (2018)
Graph: Major import commodities from Spain (2018)
Graph: Major import commodities from Spain (2018)

Note: Graph shows the main Hong Kong exports to/imports from Spain (by consignment)
Date last reviewed: March 1, 2019

Graph: Merchandise exports to Spain
Graph: Merchandise exports to Spain
Graph: Merchandise imports from Spain
Graph: Merchandise imports from Spain

Note: Graph shows Hong Kong exports to/imports from Spain (by consignment)
Exchange Rate HK$/US$, average
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
7.83 (2018)
Sources: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: March 1, 2019

Growth rate (%)
Number of Spanish residents visiting Hong Kong62,775
Number of Spanish residing in Hong Kong4071.5

Sources: Hong Kong Tourism Board, United Nations Population Division, Fitch Solutions

Growth rate (%)
Number of European residents visiting Hong Kong1,929,824

Sources: Hong Kong Tourism Board, Fitch Solutions
Date last reviewed: March 1, 2019

11.2 Commercial Presence in Hong Kong

Growth rate (%)
Number of Spanish companies in Hong Kong28
- Regional headquarters10
- Regional offices18
- Local officesN/A

Source: Hong Kong Census and Statistics Department

11.3 Treaties and agreements between Hong Kong and Spain

Double Taxation Agreement (effective date: April 13, 2012)

Source: Hong Kong Inland Revenue Department

11.4 Chamber of Commerce (or Related Organisations) in Hong Kong

Spanish Chamber of Commerce in Hong Kong
Address: 1801-03, 18/F, East Town Building, 41 Lockhart Road, Wan Chai, Hong Kong
Email: info@spanish-chamber.com.hk
Tel: (852) 2763 6236

Source: Spanish Chamber of Commerce in Hong Kong

Spanish Consulate General in Hong Kong
Address: Suite 5303, 53/F, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong
Email: espcghk@netvigator.com
Tel: (852) 2525 3041

Source: Consulate General of Spain in Hong Kong

11.5 Visa Requirements for Hong Kong Residents

Hong Kong residents do not need a visa to the Schengen area for a stay of up to 90 days in any 180-day period.

Sources: Hong Kong Immigration Department, Fitch Solutions
Date last reviewed: March 1, 2019

Content provided by Picture: Fitch Solutions – BMI Research
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