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Reasons to invest

1 Strategic location

Extremadura is a European region located in the southwestern part of the Iberian Peninsula and comprises two of Spain’s largest provinces: Cáceres and Badajoz.

It is the Atlantic’s gateway to Europe due to its direct and close connection to Lisbon, and ties with major Spanish cities like Madrid and Seville. 

2 Competitive costs

Extremadura’s labor costs are lower than other regions in Spain and Europe. It also has readily availability industrial areas at very competitive prices, and the least costly agricultural land in Spain

Extremadura has the most competitive labor cost in Spain

Extremadura's labor cost (€ 1,134) is the lowest in Spain and represents 68.4% of the national maximum.

Source: Adecco

3 Financial incentives

Extremadura is an EU Convergence region (Objective 1) which allows industrial projects to benefit from maximum regional aid intensities to promote investments.

4 Natural resources

The two river basins (Tagus and Guadiana) that cross its territory and

more than 40 midland reservoirs make Extremadura the region with the most inland waterside kilometers in Spain.

The great availability of agricultural and forestry land makes it possible to offer investors exceptionally favorable prices compared to other regions in Spain.

The many annual hours of sunshine is another of the natural features Extremadura offers investors.

5 Aid

The percentage of public investment incentives a project can receive depends mainly on the size of the company, defined by the European Commission as follows:

Company Size Employees Turnover o Balance
Small < 50 < 10 Millions   < 10 € Millions
Medium < 250 < 50 Millions   < 43 € Millions
Large Not included above


According to the above classification, a company could receive up to 45.35% of its investments, or 25%, in the form of non-reimbursable subsidies for the following eligible expenses:

  1. Equipment and machinery. 
  2. Civil works, new building and machinery installation.
  3. Engineering or works management.


Aid for hiring the unemployed:

Hiring unemployed individuals under 30 years of age, according to their education level.

Modality Maximum Aid
Terciary Education 10,000 €*
Secundary Education  8,000 €
Rest 7,000 €*

* 11.,000 € for unemployed women

Subsidies for permanent contracts:

Program 1: initial permanent contract.

Program 2: conversion of temporary to permanent contract.

Modality Men Women
Programm 1 7,000 € 7,500 €
Programm 2 ,500 € 5,000 €


Incentives for education and training contracts:

100% reduction in social security contributions for companies with fewer than 250 employees, and 75% for 250 or more employees. No more than five years can elapse from completion of the corresponding studies.


Subsidies for RDI:

R&D subsidies: Financial support in the form of a non-reimbursable subsidy for RDI projects.

The percentage of aid granted in Extremadura is the maximum national level (80%), while on the other hand it is the region allocated the highest level of European funds (ERDF).

Eligible investments: personnel costs (technicians and managers), equipment, acquisition of new machinery, research, and general expenses.

Type of Innovation Small* Medium* Large*
Industrial < 80% < 70% < 50%
Experimental < 45% < 40% < 25%

* Company Size

Privileged financing, maximum intensity of investment aid

% maximum incentive by type of company