GOING PLACES

investing in españa
The city of Madrid is pushing for investment
in their multitude of industries.

Madrid, and indeed all of Spain, is undergoing something of an industrial growth spurt. As Spanish companies grow and expand outside the peninsula’s borders, the country’s taste for international expansion has developed. Now, the city at the center of the Spanish business empire is looking to grow internally by seeking outside investors to bring their businesses to the city, invest in infrastructure and existing industries, and create new business opportunities in the city. And the push seems to be coming from all sides: from the city’s government-led chamber of commerce to the bursting private sector.

Spain’s Growing
Business Sector
In the last few years the Spanish capital city has seen a steep growth in the power of its companies, namely Telefonica, Repsol and Banco Santander (all of which are headquartered in Madrid, which one in five Spanish companies call home). These three companies all benefited from the conversion to the euro, enabling them to become more competitive. And all made very successful expansions into Latin America, in some cases assuming control of a large Latin American company or cornering a market. In fact, Spain has become the second largest investor in the region behind the United States.
With the companies’ victory well trumpeted, these companies and more have moved into Europe and are eyeing the United States. All this further cements Spain-based companies as competitors in the global market, and makes it attractive to those looking at growing companies. Spanish companies are hoping the strong link to Latin America enjoyed by Madrid companies would make the city a greater pull for investors than a French or German company.
In the past year, Spain’s strong growth has bested Germany, the United Kingdom, the Eurozone, not to mention the United States. It also boasts the eighth largest gross domestic product (GDP) in the world, growing by 4 percent in 2006. And it’s a country easily traveled for Madrid residents, as the country’s transportation infrastructure converges in the city.
Madrid boasts the largest concentration of businesses in the country and 72 percent of Spain’s 2,000 major companies are based there, according to madridEmpresa, a business development organization. In terms of big business, the agency reports that 27 of the 35 companies listed on the IBEX, Spain’s Stock Market Index, headquarter in or around the city, as do seven of the nine Spanish companies listed in the Fortune 500. The city is also popular with small business owners as 27,500 new small- to medium-sized companies launched in 2006.
Madrid has also instituted some favorable new business conditions as part of its push. For a cosmopolitan European city, the cost of doing business is relatively low. In terms of other large international destinations, the labor costs are low, at approximately $11-12 per hour. This is bested only by Athens, Lisbon and Moscow, according to Price and Earnings.
The corporate tax rate has been lowered to 30 percent, and small- and medium-sized businesses enjoy a reduced rate. Plus, personal income tax rates have been cut down to 43 percent.

Investing in Industry
As the dollar struggles against foreign currency, international investors are closely examining how they spend in other countries. But the city is definitely hoping that its great qualities—the tepid climate, serene and low-stress culture, high degree of personal security, central location in the country and as a point of access to the rest of the European Union—will be enough to sway even the most trepidacious investor.
New industries are growing. Spain has invested in automotive industry, and is one of the top three developers of green technologies in the world, according to IFEMA representatives.
The city is traditionally thought of as more of a tourism destination than a center of business. For those unwilling to devote dollars to new industry, there’s always have the perpetually popular visitors’ sector in which to invest. The services sector constitutes 82 percent of the GDP, with nearly 8 percent of that is devoted to the hotel and restaurant sector, and nearly 30 percent is devoted to business services. In a city with more than 70,000 hotels, many of which have four- and five-star ratings, the tourism industry, which hosts more than 3 million visitors a year, is an investment draw. That, added to the high purchasing power of the city compared to the rest of the country, makes it attractive.
The U.S. government has noted its appeal and has established a U.S. Department of Commerce center at the IFEMA center, an enormous convention space used for product showcasing, business fairs, and other functions. The center was set up to help American companies exhibit in Spain and disseminates market research for American companies trying to expand to Spain.
On the Spanish side, the country has a wealth of information for potential business owners or investors. One such organization is PromoMadrid, designed to orient foreign businesses to the region. It helps by providing business planning and investment help and provide liaisons to Spanish institutions that might be of further assistance.

Madrid Business Resources

Interested in learning about the city’s economic and investment opportunities? These organizations have a wealth of information about the resources available to business investors, new business owners and more.

Cámara de Comercio de Madrid
Madrid Chamber of Commerce
C/ Ribera del Loira, 56-58
28042 Madrid
(+34) 91 538 35 00
www.camaramadrid.es

Centro de Iniciativas Emprendedoras (Ciade) - Business Initiative Centre
Ciudad Universitaria de Cantoblanco
Ctra. de Colmenar Km. 15
28049 Madrid
(+34) 91 497 34 51
E-mail: ciade@uam.es
www.ciade.org

IFEMA: Feria de Madrid
(+34) 902 22 15 15
E-mail: infoifema@ifema.es
www.ifema.es

Instituto Madrileño de Desarrollo (Imade) - Regional Development Institute
C/ José Abascal, 57
28003 Madrid
(+34) 91 399 74 00
www.madrid.org

Madri+d
C/ Velázquez, 76
28001 Madrid
(+34) 91 781 65 70
E-mail: fundacion@madridmasd.org
www.madrimasd.org

madridEmprende
Economic Development agency
Bailén, 41. Ground Floor
28005 Madrid
(+34) 91 480 32 81 / 82 / 83
E-mail: madridemprende@munimadrid.es
www.esmadrid.com/madridemprende

PromoMadrid
Madrid’s International Development Agency
www.promomadrid.com

The United States Commercial Service in Madrid
Paseo de la Castellana
52 28046 Madrid
+34 915 648 976
www.buyusa.gov/spain