Foreign Firms See Spain as Good Investment Bet

Foreign Firms See Spain as Good Investment Bet

Foreign Firms See Spain as Good Investment Bet

Over the last 18 months, Spain has ticked a lot of boxes for overseas investors keen to diversify their portfolios with acquisitions in industries like banking, property and tourism.

The country’s retail sector is also a target for foreign investment flows, against a backdrop of recovering domestic demand as the economy returns to growth. While Spanish property prices have started to bottom out after a six-year slump, prime commercial spaces and shopping malls can still provide investors with enticing yields.

Spain is the fourth most attractive European country for retail investment and volumes have grown 69 per cent in the last year, specialist real estate firm Jones Lang Lasalle (JLL) said. Offering yields of between 6.25 and 7.0 per cent, commercial centres are proving to be a better return on investment than most of Spain’s IBEX-35 blue chip shares! And the sharp rise in internet sales, coupled with Spain’s popularity as a shopping haven for tourists, is also boosting the retail industry.

SPAIN’S STELLAR E-COMMERCE GROWTH

Spain is expected to outpace the rest of Europe with annual e-commerce growth of 18 per cent until 2017, compared with an average of 10 per cent for the region. This is a market of opportunities and multinationals like Amazon are already offering mobile phone payment facilities to customers, a business which is expected to see stellar growth.

Foreign tourists are buying up Spanish wares, particularly in shopping havens like Madrid and Barcelona. There has been a huge influx of Chinese, Japanese and Russian tourists with deep pockets on the lookout for designer fashion and home accessories. A key incentive for these shoppers is that citizens from outside the EU do not pay VAT. In the first four months of 2014, spending by overseas visitors rose just over 11 per cent to almost 15 billion euros from a year earlier.

SPAIN’S ATTRACTIVE BUSINESS CLIMATE

Top business school ESADE said in a recent corporate survey that foreign investors’ outlook for Spain is very positive. Almost 90 per cent of the companies polled intend to increase or maintain their level of investment in the country in 2014.

And last year, Spain came number nine in the global ranking of countries which attracted the most foreign investment, according to the United Nations Conference on Trade and Development. This success is likely to continue in light of the government’s decision to cut corporate tax rates over the next couple of years, a move widely expected to draw more foreign companies to Spanish shores.

For information on foreign investment in Spain, contact corporate law firm Argali Abogados.

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