There are numerous financial (non-refundable subsidies, soft loans or a combination of both) and tax incentives for activities pursued in certain industries deemed to be a priority due to their potential for growth and their impact on the Spanish economy as a whole. The Autonomous Communities grant similar incentives in most of these industries.

These incentives include most notably those aimed at fostering innovation, technological improvement and research and development projects, which have been one of the main priorities of the Spanish authorities in recent years.

In this connection, the Government approved the VI National R&D&I Plan for the 2008-2011 period (in line with the VII European Union R&D&I Framework Program for the 2007-2013 period), which is expected to double the financing with respect to the preceding period and improve incentive management (www.plannacionalidi.es). Subsidies granted under this Plan may be co-financed with EU Structural Funds.

The basic objectives of the National R&D&I Plan (2008-2011), which were set up in line with the provisions of he National Strategy for Science and Technology (Estrategia Nacional de Ciencia y Tecnología or ENCYT), are, inter alia, (i) placing Spain at the cutting edge of knowledge; (ii) promoting a highly competitive corporate fabric; and (iii) creating a favorable environment for investment in R&D&I.

In summary, the National Plan for R&D&I for the 2008-2011 period may be said to have a structure based on four areas directly related to the Plan’s general objectives and linked to instrumental programs which pursue specific objectives: (i) generating scientigic and technological knowledge and capacities; (ii) fostering cooperation in R&D; (iii) industry-wide technological development and innovation; (iv) strategic actions.

In addition, in order to meet the objectives of the 2008-2011 National R&D&I Plan, and based on the four areas identified, a series of instruments are envisaged, grouped along six Instrumental Action Lines (LIA): (i) Human Resources (HR); (ii) R&D&I projects; (iii) strengthening of institutions; (iv) infrastructure; (v) use of knowledge; and (vi) structuring and internationalization of the system.

These Action Lines are implemented through 13 National Programs (e.g. the National Program for Fundamental Investigation Projects, the National Program for Applied Research Projects, etc.) which, in a departure from the thematic model of previous plans, represent the main action instruments of the National R&D&I Plan.

In particular, the R&D&I Plan includes five Strategic Actions which relate to horizontal sectors or technologies: (i) strategic action in health; (ii) strategic action in biotechnology; (iii) strategic action in energy and climatic change; (iv) strategic action in telecommunications and the information society; (v) Strategic action in nanoscience and nanotechnology, new materials and new industrial processes. These Strategic Actions are aimed at supporting the Government’s firmest R&D&I commitments, with an integral concept valuing the research carried out, as well as its transformation into processes, products and services for society.

In connection with the specific characteristics of each Instrumental Action Line, the majority of the Orders regulating the Instrumental Action Lines were published in 2008, with only the Order relating to the strengthening of institutions still to be published(www.micinn.es/planidi/lias.html).

Thus, for example, Order CIN/1862/2009, of July 7, 2008, establishing the terms of reference for the grant of public aid for science and technology in Instrument Line of Action for Scientific-Technological Infrastructures, within the framework of the 2008-2011 National Plan for Scientific Research, Development and Technological Innovation, was published in the Official State Gazette of March 8, 2008.

This Order containing terms of reference regulates the grant of aid in the following subprograms: (i) Subprogram for design, viability, access and improvement of Singular Scientific and Technological Facilities; (ii) Subprogram for scientific and technological actions in scientific and technological parks; (iii) Subprogram for the creation and consolidation of technological centers; (iv) Subprogram for the acquisition of scientific-technical infrastructures in agrofood R&D and TI centers of the National Agriculture and Food Research Institute; (v) Subprogram for scientific-technological infrastructure projects financed jointly with the European Regional Development Fund, and the respective calls must be adjusted to the content of the above-mentioned Order.

Notwithstanding, the main characteristics of the aid that can be granted under the general regime for this Instrumental Action Line can be summarized as follows:

TYPE OF AID
Repayable subsidies, loans and advances

ELIGIBLE APPLICANTS

Enterprises (including SMEs). Technological centers and technological innovation support centers. Private university R&D centers. Public R&D and TI centers. Private non-profit R&D centers. Other private non-profit entities. Groupings of individuals or legal entities, both public and private, joint property entities or any other type of economic unit or separate assets which, even if lacking legal personality, is able to carry out projects, activities or conducts or which are in a position to merit the grant of the subsidy

ELIGIBLE PROJECTS AND ACTIONS

Actions relating to the improvement of Singular Scientific and Technical Facilities (Instalaciones Científicas y Técnicas Singulares or ICTS). Actions to promote access to ICTS. Preparation of viability studies. Supplementary actions (organization of conferences, seminars or lectures; creation and maintenance of national thematic networks of scientific-technical infrastructures; actions of scientific-technological policy aimed at attending to strategic initiatives of special interest). Projects to introduce or improve infrastructures able to be used for scientific and technological actions. Projects for the acquisition of equipment for scientific and technological infrastructures. Projects aimed at the creation of centers for entities which, at the time of their application, do not engage in any type of activity. Consolidation projects for existing centers. The acquisition and installation of new scientific, technical or technological equipment as well as the improvement of the performance of existing equipment. Creation and improvement of telematic networks.

FORMS OF PARTICIPATION
Individual projects or action. Coordinated projects or action. Projects or action based on cooperation.

 

Furthermore, in an attempt to bolster the investment of enterprises in R&D, the Spanish Government approved the INGENIO 2010 Program, aimed at increasing both public and private investment in R&D&I by starting up various strategic lines (CONSOLIDER, AVANZA and CENIT), which contain a wide range of measures to foster excellence in research, the performance of major integrated strategic industrial research projects, as well as convergence with the EU in relation to the indicators of the Information Society (www.ingenio2010.es).

At the beginning of 2009, the Government approved the AVANZA2 Plan (included under Plan E, the Spanish Plan for the Stimulation of the Economy and Employment, approved by the Government with a view to combating the current international economic crisis), which replaces the AVANZA Plan and is aimed, inter alia, at (i) consolidating the goals reached under the Avanza Plan, (ii) contributing to economic recovery by fostering the intensive and generalized use of CIT, (iii) boosting demand and strengthening of its own CIT industry specialized in strategic sectors and focused on SMEs.

In particular, the AVANZA2 Plan is divided into the following five areas of action:

• Development of the CIT sector (with a special focus on SMEs): this area is aimed at supporting companies that develop new CIT products, processes, applications, contents and services. Its priority is to promote the participation of Spanish industries in the construction of the Internet of the Future and the development of digital contents.
• Digital public services: this area is aimed at improving the quality of the services provided online by the Public Authorities, with special emphasis on supporting local authorities and developing the functionalities of the electronic national identity card, a pioneer initiate at international level. This line will also support the creation of new platforms and contents in the area of education and health.
• CIT training: the objective of this area of action is to continue incorporating both citizens and companies into the Information Society, special priority being given to SMEs and their employees and to groups of less integrated citizens (the disabled and the elderly).
• Infrastructures: the main objective of this line is to foster the development and implementation of the Information Society at local level, improving the provision of electronic public services to citizens and to companies using CIT.
• Trust and security: with a budget of €11 million in 2009, its objective is to strengthen the trust of citizens and enterprises in CIT by way of public policies on information security and to foster the accessibility of CIT services.

Notwithstanding the numerous and varied calls for applications foreseen under the AVANZA2 Plan,it is important to note the ICO Line- AVANZA Plan Loan, in force through December 31, 2010 or until available funds run out (endowed with €1,760.7 million for the 2007-2010 period), which covers anything from the granting of loans to SMEs to finance access to information technologies and telecommunications through the granting of aid to young people and university students for the acquisition of computer equipment or the financing of a subscription to a broadband Internet connection for any resident of Spain.

Please also note the work of the Center for Industrial Technological Development (Centro para el Desarrollo Tecnológico Industrial or CDTI) in relation to the promotion of the technological innovation and development of enterprises through the granting of preferred loans in its various financing lines and providing technical advice and support to enterprises planning to submit projects under cooperative R&D&I Programs in Europe, such as EUREKA.

The most notable Projects in which Spain actively participates are the “Umbrella” Projects (EUREKATOURISM, EUREKABUILD, EULASNET II, FACTORY, EUROENVIRON, EUROAGRI, LOGCHAIN, ENIWEP, INNOFISK and ECONTEC) and the “Clusters” Projects (CELTIC, EURIPIDES, ITEA2 and MEDEA +).

Lastly, as a supplement to the ENCYT, on July 2, 2010 the Council of Ministers approved the State Innovation Strategy (Estrategia Estatal de Innovación or e2i), with a view to fostering technological development and innovation as the essential pillars on which to support a change of productive model in Spain.

In order to attain a situation of convergence with the leading countries in terms of innovation, the State Innovation Strategy includes a number of actions grouped into five areas which involve all Ministries and are open to cooperation with other authorities and with the various social and economic agencies:

• a) Creating a financial environment favorable to innovation, by improving public financing tools or promoting instruments to boost the participation of the private sector, such as bank financing, venture capital or secondary stock markets.
  Most notable is the agreement recently signed by the Ministry of Science and Innovation and the Official Credit Institute under which €1,150 million of the Sustainable Economic Fund are committed to the development of three programs to finance innovative projects: (i) “Innocredit Program”, to support the bank financing of innovation projects with a line of ICO mediation loans; (ii) “Inventa Program”, for joint financing by the Ministry and the ICO of major industrial centers; (iii) “Invierte Program”, to support first step venture capital in connection with “singular strategic projects”, understood as projects characterized by being of great magnitude and having high technological content.
b) Fostering innovation from the side of public demand. At present an entire group of public purchases depending on the state and local authorities, through the State Fund for Employment and Local Sustainability, in which the innovative component is preeminent, has been identified. These offers therefore represent authentic business opportunities for innovative companies in areas such as green economy or health economy (industries called to play an extremely significant role in the new productive business model which is to be attained with the State Innovation Strategy).
• c) Intensifying international projection, improving global compatibility, reinforcing activities to promote Spanish technology and innovation in Japan, Korea, China India, the US, Morocco, Chile, Brazil, Mexico and South Africa.
• d) Strengthening territorial cooperation, based on actions targeted at seeking a consensus between authorities in order to disseminate innovation throughout the territory and the productive fabric, with special emphasis on SMEs. In this context, in recent months the Ministry has signed conventions with various Autonomous Communities for a value of €250 million.
• e) Human Capital: Lastly, the State Innovation Strategy attempts, in this last area, to combine forces in order to increase the incorporation of innovative talent into Spanish companies.

The “Innovacción Plan” was approved to aid in the attainment of the objectives of the State Innovation Strategy. Under this Plan the Ministry intends to generate more than 93,000 qualified jobs and 3,900 new innovative companies or companies beginning to innovate. It also intends to obtain around €700 million from the European Union through programs such as the VII Framework Program or the European Union ERDF Funds, within the Technological Fund Operative Program, among others. The Ministry also plans to reach €5,000 million in connection with R&D&I mobilized private investment.

The "Innovacción Plan" is broken down into the following seven competitive tenders, which are instrumented as simply as possible with a view to keeping them in line with the needs of the market: (i) “Innplanta”, supporting entities installed in scientific-technological parks; (ii) “Innoeuropa”, targeted at technological centers under the EU’s VII Framework R&D Program; (iii) “Inncide”, assessing the knowledge and findings of research performed at universities and other research centers by strengthening and consolidating units which promote and facilitate cooperation and knowledge transfer processes, as well as support for the development of initiatives targeted at the performance of its activities; (iv) “Innfluye”, for the creation and consolidation of stable public/private groups which encourage the improvement of the technological capacity and the growing competitiveness of the national production sector by carrying on knowledge exchange, planning and dissemination activities; (v) “Innpacto”, targeted at public/private cooperation projects between research agencies and companies for the performance of R&D&I projects directed toward usable products based on demand; (vi) “Innocampus”, to foster academic excellence; and (vii) “Inncorpora”, targeted at the incorporation of qualified technologists into the workforce.

For more information on Investment aid & incentives, you can download the following document:

Investment aid and incentives (1572kb.)

Prepared by Garrigues

Last updated: 19|07|2010