- More competitive salary costs than the major European economies.
- Competitive costs for office and industrial warehouse rental.
- About 80 Technology Parks, with more than 5,115 operating companies.
- Affordable utility and telecommunications costs.
- Spain has a moderate tax burden, below the average for the EU-27 and Eurozone.
- Company tax
- 30% standard rate.
- 25% for small enterprises (up to a limit of 300,000 euros).
- 20% for microenterprises (up to a limit of 300,000 euros).
- 15% for new enterprises (up to a limit of 300,000 euros).
- An attractive system of deductions on the company tax that reduces the average effective tax rate paid by a company in Spain by up to 19.3%, which is a fairly low rate compared to other EU countries.
- The system of tax incentives for undertaking R&D&I activities is among the most favourable of OECD countries, both for large companies as well as for small and medium enterprises.
- The Entrepreneur Support Act and its recently approved Internationalisation allows the recovery of tax deductions for carrying out R&D&I activities that were not applied due to lack of allocations by means of a cash reimbursement system which, de facto, turns them into a subsidy regardless of the company's profits.
- Such tax initiatives are also complemented by the “patent box” regime that exempts from tax 60% of revenues coming from the transfer of intangible assets. The “patent box” regime currently in force in Spain is the most beneficial of all those that exist within the EU in as far as the affected intangible assets are not limited to patents as is the case in other countries, but extends to revenues coming from the transfer of models, designs, formulae, plans or even know-how.
- In addition, Spain has a tax system that adapts perfectly to even the most internationalised companies in as far as it has a significant network of Double Taxation Conventions, especially notable with countries in Latin America, combined with the “participation exemption” regime. This regime affords companies exemption from dividends or shares in profits received from their non-resident subsidiaries in Spain, as well as from any capital gains in the disposal of said shares.
- Spain also has a special tax regime for holding companies (ETVEs, or foreign-securities holding entities) which promotes the internationalisation of such companies on two levels:
- Establishing an exemption regime on the dividends from partly-owned subsidiary companies and in relation to revenues coming from the transfer of the aforementioned shares.
- Being exempt from tax burden the repatriation of profits generated by foreign-securities holding entities to their non-resident partners.
Incentives for investment
- 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 (R&D&I):
- Training and hiring incentives for certain types of workers, offering business owners significant savings on labor costs, recently reinforced for entrepreneurs and SMEs.
- Numerous financial and fiscal incentives to promote innovation, technological improvements and R&D projects in sectors which are considered key due to their growth potential and impact on the Spanish economy.
- In addition, as an EU member, Spain has access to European aid programs targeting depressed areas. These supplement development plans financed by the Spanish government.
For further information, please visit our Guide to incentives grants and state aid in Spain.
Further information about the regional incentives at the Ministry of the Treasury and Public Administration Services website.
Last updated: 12|01|2017