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 the management of incentives granted thereunder. Subsidies granted under this Plan were able to be co-financed with EU Structural Funds.

Following the recent approval of Science, Technology and Innovation Law 14/2011, establishing the new legal framework for the promotion of scientific and technical research, experimental development and innovation in Spain, and until the approval of a new National Scientific and Technological Research Plan consistent with the objectives and priorities of the new Law, the Council of Ministers resolved to extend, on October 7, 2011, the term of the previous National Scientific Research, Development and Technological Innovation Plan (2008-2011).

The basic objectives of the National R&D&I Plan (2008-2011), in line with the provisions of the 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 National Plan, and based on the four areas identified, a series of instruments is envisaged, grouped along six Instrumental Action Lines (LIA): (i) Human Resources (HR); (ii) R&D&I projects; (iii) strengthening of institutions; (iv) Scientific and Technological infrastructure; (v) use of knowledge and technological transfer; 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, the National Program for Public/Private Cooperation, 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 to promote 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.

Thus, for example, Order CIN/1599/2009, of May 29, 2009, establishing the terms of reference for the grant of public aid for science and technology in the Instrumental Line for Instrumentation and Internationalization of the System, under the 2008-2011 National Plan for Scientific Research, Development and Technological Innovation, was published in the Official State Gazette of June 13, 2009.

This Order containing terms of reference regulates the grant of aid in the following subprograms: (i) National Networks Program, instrumented through the Subprogram for the support of Technological Platforms; (ii) National Program for Public/Private Cooperation, instrumented through various subprograms aimed at supporting national Strategic Technical Research Corsortiums (CENIT-E), Strategic Singular Projects and at fostering cooperation between research bodies and enterprises for the joint performance of R&D projects; and (iii) National Program for the Internationalization of R&D, instrumented through the following subprograms: Euroinvestigación; International Projects; Promotion of International Scientific Cooperation; Specialization in Scientific Infrastructures and International Bodies; Actions relating to International Scientific Infrastructures; special actions to promote the Internationalization of R&D; INNOEUROPA; and support for the participation of enterprises in international R&D programs (Interempresas Internacional).

Notwithstanding the foregoing, 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. National technological centers. National technological innovation support centers. National university technological innovation support centers. Private university research and development centers. Private non-profit research and development centers. Public research bodies subject to Law 13/1996 for the Promotion of Scientific and Technical Research. Public universities, their departments and university institutes, provided that they have legal personality. Public research and development centers. Private non-profit entities (foundations, associations, etc.) which habitually pursue activities connected with promotion, management and intermediation in the field of science, technology, research and innovation. Other public law entitiesprivate non-profit entities. The following groupings or associations: inter alia, (i) joint ventures; (ii) economic interest groupings; and (iii) industry-wide non-profit business associations.

ELIGIBLE PROJECTS AND ACTIONS

Actions to disseminate the findings of research activities or of public and private actions of interest to the industry. Forums for the exchange of information or of work aimed at counseling the bodies in charge of technological policies. Actions aimed at promoting cooperation between entities for the development of applied research projects, technological development projects and innovation projects. Actions for the dissemination, analysis and planning of the findings obtained from research activities (conferences, work meetings, lectures, publications or reports).

FORMS OF PARTICIPATION
Individual projects or actions. Projects or actions based on cooperation.

 

Furthermore, in an attempt to bolster the investment of enterprises in R&D, the Spanish Government approved the INGENIO Program, aimed at increasing both public and private investment in R&D&I by starting up various strategic programs (CONSOLIDER, AVANZA2, CENIT and EUROINGENIO), 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).

The AVANZA2 Plan is currently in a second phase of development, as a result of the approval, by resolution of the Council of Ministers on July 16, 2010, of the 2011-2015 Strategy expected for the Plan. This Strategy focuses its efforts on the attainment of ten main objectives: (i) to promote innovative CIT processes at the public authorities; (ii) to extend CITs in health and social welfare; (iii) to bolster the application of CITs to the educational and vocational training system; (iv) to improve the capacity and extension of telecommunications networks; (v) to extend the culture of security among citizens and enterprises; (vi) to increase the advanced use of digital services by citizens; (vii) to extend the use of CIT business solutions at enterprises; (viii) to develop the technological capacities of the CIT industry; (ix) to strengthen the digital contents industry by guaranteeing optimum protection of intellectual property in the current technological context and within the Spanish and European legal framework; and (x) to develop ecological CITs.

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: this line is aimed at strengthening the trust of citizens and enterprises in CIT by way of public policies on information security and to foster the accessibility of CIT services.

The AVANZA2 Plan establishes various methods of funding in the specific form of a loan. These funding methods are instrumented as cooperation agreements with credit institutions through the ICO, for the purposes of obtaining a grant of preferential loans for the acquisition of equipment and a broadband connection, with a view to encouraging the use of CITs by families and businesses.

In turn, it is also important to note the EUROINGENIO Plan, comprising including various programs aimed at boosting Spanish R&D+I, such as: (i) the TECNOEUROPA Program, focused on large enterprises and aimed at encouraging Spanish corporations to lead projects in three or more countries of the EU; and (ii) the INNOEUROPA Program, aimed at bolstering the participation and leadership of Technological Centers and Groupings of Innovative Enterprises in financeable projects.

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, EUREKABUILD2, EULASNET II, PRO-FACTORY, EUROAGRI, FOODCHAIN, LOGCHAIN and ENIWEP) and the “Clusters” Projects (CELTIC, EURIPIDES, ITEA2, CATRENE and EUROGIA).

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: (i) generating an environment favorable to innovation; (ii) fostering innovation from the side of public demand; (iii) international projection; (iv) strengthening territorial cooperation; and (v) human capital.

The Innovation Plan was approved to aid in the attainment of the objectives of the National Innovation Strategy, and is broken down into six competitive tenders and seven financed and structural actions.

The competitive tenders include most notably: (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”, for the assessment and transfer of knowledge and findings of research performed at universities and other research centers; (iv) “Innfluye”, for the creation and consolidation of stable public/private groups which improve the technological capacity and competitiveness of the national production sector; (v) “Innpacto”, targeted at public/private cooperation projects between research agencies and enterprises for the performance of R&D+I projects on usable products based on demand; and (vi) “Inncorpora”, targeted at the incorporation of qualified technologists into the workforce.

In turn, the structural and financed actions include as an example: (i) “Innplica”, for the promotion of innovative public contracting; (ii) “Innpulso”, aimed at supporting the actions of local governments in connection with science and innovation; (iii) “Innocash”, the objective of which is the promotion mobilization of private investment for the commercial development and operation of R&D findings; (iv) “Inntegra”, targeted at coordinating both national and autonomous community innovation strategies; (v) “Innventa”, for the creation of reference research and development centers through one-time agreements with Autonomous Communities, or directly with public and private entities and enterprises; and (vi) “Innvierte”, a venture capital fund that invests directly in innovative enterprises.

For further information, visit the extended version of our online Guide to Business:

Investment aid and incentives in Spain

 

Prepared by Garrigues

Last updated: 13|03|2012