Guidance

Doing business in Spain: Spain trade and export guide

Updated 4 August 2015

This guidance was withdrawn on 31 October 2019

Department for International Trade withdrew this publication because it was out of date.

See current information to:

• explore opportunities for exporting to Spain in our country guide on great.gov.uk
• learn about changes for UK exporters to Spain if the UK leaves the EU without a deal
• find out how UK organisations can manage risk when doing business in Spain

Brexit

Learn about changes for UK exporters to Spain if the UK leaves the EU without a deal.

Managing risk

Find out how UK companies can control risks when doing business in Spain.

Export opportunities and advice

Find more export advice and explore opportunities overseas on great.gov.uk.

1. Spain export overview

Spain is the fifth largest economy in the European Union (EU) and now one of the fastest growing in the eurozone.

Contact a Department for International Trade (DIT) Spain export adviser for a free consultation if you’re interested in exporting to Spain.

Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Spain.

The population of Spain is about 47 million making it one of the biggest consumer markets in the EU.

Around 1 million British nationals, based mostly in the coastal regions, are permanent or part-time residents. Over 16 million British tourists visit Spain every year.

Over 900 UK companies operate in Spain. New UK investors include Dealz-Poundland, Stella McCartney and Jo Malone. Tunstall and Primark are increasing their investment.

Benefits for UK businesses exporting to Spain include:

• entry route to Latin America
• size of the market
• English accepted as a business language
• familiarity with British products and openness to them
• proximity and availability of flights, including low cost airlines

Strengths of the Spanish market include:

• competitive cost of transport of goods
• highly efficient transportation systems
• quality and availability of qualified suppliers
• advanced ICT network

Read the EU’s practical guide to doing business in Europe.

2. Challenges

Doing business in Spain does not present major challenges to UK companies as Spain is a similar market to the UK.

The Spanish market is open to overseas companies and there are no specific restrictions. However, there are challenges which include:

• long payment terms with many organisations working on 90 to 120 payment days
• some inflexibility remaining in the labour market
• high degree of devolution of powers to Spain’s 17 autonomous regions

3. Growth Potential

3.1 Economic growth

Spain’s Gross Domestic Product (GDP) grew 1.4% in 2014. Growth has continued into 2015, with 0.9% growth in the first quarter of 2015. 3% growth is forecast for 2015.

Growth is expected due to:

• increased household disposable income
• record employment growth
• 2015 tax reform which has left more money in people’s pockets
• increased investment in machinery and equipment

The economic recovery has resulted in the return of foreign investment. EUR 69 billion was invested in Spain in 2013, following an outflow of EUR 193 billion in 2012.

Spain is investing in its Research and Development (R&D) capabilities and aims to spend 2% of GDP on research by 2020. The ‘Science, Technology and Innovation Strategy’ set out a vision to 2020 which focuses on:

• increasing international collaboration
• promoting more private participation and involvement in R&D
• more emphasis on technology and knowledge transfer

3.2 Trade agreements

Spain is a member of the European Union (EU), the World Trade Organization (WTO) and other international bodies. Goods manufactured in the UK are exempt from import duties.

Contact the SOLVIT team if you have market access issues relating to the operation of the Single Market.

3.3 Gateway to central and south America

Combined, the Latin American countries are Spain’s second largest export market. Spain is also the second most important investor in Latin America. Many Spanish companies have large distribution capabilities in the region.

Collaboration with Spanish companies can help UK companies gain access to opportunities in Latin America.

4. UK and Spain trade

Spain and the UK are major trading partners.

Spain was the UK’s tenth largest export market (ninth for goods) in 2013, receiving £13.5 billion of UK exports.

Bilateral trade in goods is wide-ranging, but leading sectors are

• automotive and auto parts
• aircraft and associated equipment
• medical and pharmaceutical products
• inorganic chemicals
• alcoholic beverages
• vegetables and fruit

Spain’s share of UK exports (2.6%) is higher than India’s and Brazil’s combined. UK goods exports grew 3.5% year-on-year in value in 2014.

21% of all Foreign Direct Investment (FDI) in Spain since 1993 has came from the UK. The UK, at EUR 1.7 billion, was the third largest investor in Spain in 2014.

Over 400 Spanish companies are registered in the UK, including household names such as Santander and Zara. FCC, Ferrovial and Iberdrola are investing in UK infrastructure and services.

5. Opportunities for UK businesses in Spain

Department for International Trade (DIT) provides free international export sales leads from its worldwide network. Search for export opportunities.

Access high value public procurement notices via Tenders Electronic Daily (TED). TED contains all procurement notices above a certain threshold from the EU and European Economic Area (EEA).

Watch our videos for more information about opportunities in Spain.

Bring your business to Spain

5.1 Energy

Spain’s 2014 to 2020 National Energy Efficiency Action Plan aims to reduce consumption 26.4% by 2020. National and regional government incentives support this objective.

Spain is still the fourth largest generator of wind energy in the world despite recent low investment. It’s the second source of power generation meeting 20.3% of demand after nuclear (22%). Between 4,553 and 6,473 MW of new wind energy capacity need to be installed for Spain to reach its 2020 renewable energy target.

The Basque Country leads Spain in the design and manufacture of power generation and electrical distribution equipment, including 3 of Spain’s 4 wind turbine builders. The sector is made up of some 350 companies, and there are supply chain and collaboration opportunities for UK companies in wind and marine.

There are opportunities for UK companies in:

• Latin America through Spain’s global energy companies: Iberdrola (owners of Scottish Power); Endesa (owned by Enel); Repsol and Gas Natural Fenosa
• energy efficiency in buildings, smart metering and smart grid solutions/lighting
• energy storage
• innovative carbon reduction solutions
• nuclear (construction of a temporary centralised storage facility for spent fuel)
• wind turbine repowering
• collaboration on EU Horizon 2020 energy projects

Contact Senior Trade Adviser marianne.carlin@fco.gov.uk for more information on opportunities in the energy sector.

5.2 Education

The market for British education and related products is huge in Spain.

Spain hosts the second largest number of British schools outside the UK in the world. Many are members of the National Association of British Schools in Spain (NABSS). All products and services which are successful in UK schools potentially could do well in Spain’s international schools sector.

Spain has a firm political commitment to maintain and expand a state bilingual education programme, potentially offering opportunities for UK providers.

Over 100,000 Spanish adults and children visit the UK to study English every year. UK language schools, boarding schools and other study centres generally work through Spanish study abroad agents, the most reliable of which are members of www.aseproce.es .

Over 9,000 Spaniards chose higher education in the UK in 2014. Spain is one of the 10 top sending countries and demand is growing.

Spain still has a significant skills gap in English language proficiency, ranking near the bottom of the EU. As professional careers require advanced proficiency the English Language Training (ELT) market is huge for learners of all ages. Speciality areas such as business English are highly competitive. New entrants must have a brand name and/or a Unique Selling Point (USP).

Demand for special needs products is rising in both the education and healthcare sectors. It’s currently a relatively underdeveloped sector in Spain. Almost one third of children with disabilities attend regular schools without dedicated support.

Corporate training also offers opportunities to UK providers.

Contact Trade Adviser marc.michaud@fco.gov.uk for more information on opportunities in the education sector.

5.3 Healthcare

Spain continues to invest heavily in healthcare. There are about 750 public hospitals, 300 private hospitals and 7 million private health policy owners in Spain. Healthcare is devolved to the regions so care and access to drugs can vary from region to region.

The aging population and rise in chronic diseases is increasing pressure on the healthcare system. As a result there are opportunities for products and services involving:

• cutting stays in hospital
• wound management
• telemonitoring
• e-health

Catalonia is a major centre in southern Europe for R&D activities. It is home to:

• BioRegió de Catalunya (BioCat), a centre for pharmaceutical companies
• Southern European Cluster in Photonics and Optics (SECPhO)
• ALBA, the Spanish synchrotron radiation facility

There are opportunities for UK Contract Research Organisations (CROs) in Catalonia:

• selling services to drug development companies
• selling services to discovery research centres
• selling innovative or cost efficient products and equipment for R&D

Contact Senior Trade Adviser shona.brown@fco.gov.uk for more information on opportunities in the life sciences sector.

Contact Senior Trade Adviser jessica.griffiths@fco.gov.uk for more information on opportunities in the life sciences sector in Catalonia.

5.4 Food and drink

Spain’s food and drink sector has grown since the beginning of the economic crisis. Demand for British products has increased due to:

• Spanish acceptance of products
• large numbers of British expats
• large numbers of British tourists

Demand is very strong for gourmet and premium products.

Alimentaria, Europe’s third biggest food and drink exhibitioon, offers opportunities for UK suppliers.

British cereal grain tends to do very well in the Spanish market as British and Spanish harvest times differ.

Contact Senior Trade Adviser beatriz.asua@fco.gov.uk for more information on opportunities in the food and drink sector.

Contact Trade Adviser aurora.ortega@fco.gov.uk for more information on opportunities in food and drink sector in Catalonia.

5.5 Agriculture

Agriculture remains important to the Spanish economy making up 15.5% of total exports. There are still many areas in Spain’s agriculture sector where processes could be improved. Farming practices are expected to change in the next 5 to 10 years as many farms are passed to younger generations to manage.

Technology and new products will be required to:

• improve production methods
• address traceability
• make farming more sustainable

Opportunities include:

• fertilisers and pesticides for organic farming
• quick diagnostic kits for use in meat production eg salmonella
• water purification products
• vaccines for illnesses such as Blue Tongue

Contact Senior Trade Adviser shona.brown@fco.gov.uk for more information on opportunities in Agritechnology.

Contact Senior Trade Adviser beatriz.asua@fco.gov.uk for more information on opportunities in Agritechnology

5.6 Defence and security

The Spanish military have recently adopted a more centralised approach to planning and procurement programmes. They have widened the remit of the Armaments and Material Directorate (DGAM). DGAM are setting up specific programmes to cover the gradual acquisition of:

• 8x8 vehicles
• F110-class frigates
• tanker aircraft
• Remotely Piloted Aircraft (RPA)
• cyber

The UK security industry enjoys a great reputation in Spain which counts amongst its top export destinations in this sector. There is still room for growth. Opportunities for UK suppliers include:

• cyber security particularly for the private sector
• protection of critical national infrastructure (physical protection as well as cyber)
• smart border technologies
• riot police equipment

Contact Export Control Organisation (ECO) to check your goods you are meeting legal requirements for export.

Contact Senior Trade Adviser fernando.pons@fco.gov.uk for more information on opportunities in the defence and security sector.

6. Start-up considerations

Spain has been an EU member since 1986, so European business practises and standards generally apply.

To export directly to Spain you should appoint a distributor or an agent who knows the market and is well connected. Local representatives can provide either national or regional coverage.

You can also:

• enter joint venture partnerships
• set up owned or partly owned subsidiaries

Almost all types of UK businesses entering Spain must obtain a clear name search certificate from the Central Mercantile Registry. Different categories of Spanish businesses are governed by different regulations.

Invest in Spain provides more information about types of businesses and procedures for opening them.

7. Legal considerations

7.1 Standards and technical regulations

Products and packaging should meet EU standards.

You should seek legal advice or guidance from the appropriate regulatory agency in Spain.

Check the Spanish Camber Commerce website for more about regional standards and technical regulations.

Labelling for all food and drinks products must be in Spanish. Labels must include:

• the expiration date
• country of origin
• all ingredients and instructions

Exports of food and agricultural products to Spain are guided by specific regulations. Read the Food and Agricultural Import Regulations and Standards (FAIRS) report for full details.

A local distributor will be able to help with advice regarding import and other regulations in Spain.

7.2 Intellectual property (IP)

Trademarks, designs, patents and copyright are the principal forms of Intellectual Property (IP) protection available to companies and individuals.

IP law, especially for patent protection, is not totally harmonised within the EU.

Spanish intellectual property laws are harmonized with those of the other EU member states and Spain has ratified the main international treaties in this field.

Spain follows ‘first-to-file’ system whereby the first person to apply for registration will have priority rights. Oficina Española de Patentes y Marcas (OEPM) has responsibility for IP protection in Spain.

7.3 Investment

There is generally no requirement for prior approval of investments from EU companies in Spain. However, there are some exceptions depending on the size and nature of the investment.

Investments must be registered with the Directorate General of Trade Policy and Foreign Investments. All legal businesses must be registered with the Ministry of Finance.

8. Tax and customs considerations

The UK and Spain have signed a double taxation convention.

8.1 Value Added Tax (VAT)

VAT in Spain is known as IVA. The usual VAT rate is 21%. The reduced rates of 10% and 4% apply for products such as:

• food
• drinks
• some educational material
• medical aid

When you supply goods to a VAT registered customer in Spain you should:

• get the Spanish importer’s VAT number from the invoice
• keep documentary evidence that the goods have left the UK

This information enables you to zero-rate your goods for UK VAT purposes.

Check with HM Revenue and Customs (HMRC) regarding VAT refund of business expenses incurred in Spain.

Excise duty is levied on certain goods including alcoholic drinks and cigarettes.

8.2 Corporate tax

You can transfer capital, dividends, proceeds of sale abroad without any limitations or taxes if you are a holder of registered foreign investments. You only need to complete certain minor bank formalities for statistical information.

Corporate income tax in Spain is 30%. The rates can be less for enterprises of reduced size.

Read more about corporate tax in Spain at Confédération Fiscale Européenne (CFE).

8.3 Income tax

Personal income tax applies to tax-residents in Spain. These include:

• those resident for more than 183 days per year in Spain
• those with business and economic interests based in Spain

Agencia Tributaria provides more information on resident and non-resident income tax.

8.4 Customs

The internal market of the EU is a single market which allows the free movement of goods and services. Therefore, no import duties apply.

9. Entry requirements

EU residents only need a valid passport, or other acceptable travel document in order to visit Spain.

9.1 Travel advice

If you’re travelling to Spain for business, check the Foreign and Commonwealth Office (FCO) travel advice page beforehand.

10. Contacts

Contact the Department for International Trade (DIT) team in Spain for more information and advice on opportunities for doing business in Spain.