Subchapters:
- Business Relationships
- Foreign direct investment
- FTAs and Treaties
- Development Cooperation
- Prospective fields of study (MOP)
Business relations
Trade relations with the EU
The EU market is still a key partner for Spain, to which most exports flow and from which the country imports a large share of goods and services. Spain has traditionally placed great emphasis on the role of the European Union and in the international environment often emphasizes the need to strengthen and protect the internal market. For more information on the history of Spain’s relations with the EU. In the last few years, Spain has been the recipient of European Investment Bank projects with the largest aggregate amount of investment among all EU member states. In recent years, they have started implementing projects to support small and medium-sized enterprises, the automotive industry and other sectors.
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Exports from the EU (million EUR) | 168 172.5 | 174,671.0 | 178,369.1 | 165 140.2 | 203707.9 |
| Imports into the EU (million EUR) | 173,503.70 | 180,822.30 | 181,934.90 | 161,812.60 | 193455.1 |
| Balance with the EU (million EUR) | 5,331.1 | 6 151.3 | 3,565.7 | -3,327.6 | 10252.8 |
Source: European Commission
Trade relations with the Czech Republic
In recent years, mutual exports and imports have remained at a standard level without major changes, but with a permanent year-on-year increase. In 2020, as a result of covid-19, a decrease in mutual economic activity was recorded, the year 2021 has already brought a better balance, and the outlook for 2022 is quite positive.
In addition to established commodities from previous years (Škoda cars, electronic and optical devices, machine tools, chemicals, glass, Jabloneck jewelry, beer, etc.), Czech manufacturers such as Ravak and Tescoma are also gaining market share.
Commodity structure
Main items of import in 2021:
- Code 87 – Vehicles, other than rolling stock, their parts, components and accessories – 30.5%
- Code 85 – Electrical machines, apparatus and equipment and their parts and components; devices for recording and reproducing sound, devices for recording and reproducing television images and sound and parts, components and accessories of these devices – 18.7%
- Code 84 – Nuclear reactors, boilers, machinery and mechanical equipment; their parts and components – 16.5%
- Code 38 – Various chemical products – 7.5%
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Exports from the Czech Republic (billion CZK) | 67.3 | 138.1 | 146.8 | 110.1 | 123.5 |
| Imports to the Czech Republic (billion CZK) | 122 | 68.8 | 70.9 | 70.2 | 81.4 |
| Balance with the Czech Republic (billion CZK) | 55 | -69.3 | -75.9 | -39.9 | 42.2 |
Source: businesscarriers.com
Trade relations with countries outside the EU
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Exports from countries outside the EU (million EUR) | 96,798.0 | 118,787.80 | 119,967.80 | 104,380.80 | 121,555.80 |
| Imports to countries outside the EU (million EUR) | 116,819.8 | 140 159.8 | 124,913.4 | 105,041.5 | ON |
| Balance with non-EU countries (million EUR) | -20,021.7 | -28,287.3 | -26,437.5 | -16,278.2 | ON |
Source: EIU, Eurostat
Foreign direct investment
Spain pays a lot of attention to foreign investment and strives to make the business environment attractive for new investments.
ICEX-INVEST IN SPAIN is an institution that deals with the support of foreign direct investments. Spain is the 13th country in the world to which most foreign investments are directed.
In 2021, most investments were directed to the autonomous region of Madrid, Catalonia and the Basque Country. Foreign investments in Spain require authorization only in relation to activities related to national security, defence, public safety and public health.
Foreign investment in 2021 was almost 29 billion euros, up 17.7% from 2020. The most foreign investment was from France at almost 8 billion euros, or 25.9% of investment in 2021. United States invested billion euros (14.5%) and Great Britain 3 billion euros (10.5%).
In 2021, more than 40% of investment was in services, almost 35% in industry, 21.5% in construction and 1% in the primary sector. Energy supply infrastructure (electricity and gas) with almost 6 billion euros represents more than 20% of total FDI in 2021, financial services (excluding insurance and pension funds) 7% with more than 2 billion euros and IT-related activities 5.9% (billion euros).
ICEX-INVEST IN SPAIN annually publishes the so-called Business Climate Barometer in Spain. Bureaucratic burdens or operational costs (electricity and energy) are listed as areas for improvement.
Geographical location, quality of life and good climatic conditions are important motivational elements for investors.
Efforts to attract investment are focused on sectors with high added value, quality employment and sustainable growth, such as renewable energy, ICT, research, agri-food, automotive and mobility, aerospace or transport and logistics.
Within these sectors, issues such as IoT, smart cities, ecological products, agritech, green logistics and e-logistics may be interesting for Czech companies.
ICEX-INVEST IN SPAIN provides information and support to foreign investors, including information regarding available support and incentives that exist especially for R&D or job creation, and contact with regional institutions.
FTAs and treaties
Treaties with the EU
In 1977, Foreign Minister Marcelino Oreja officially presented Spain’s request to join the European Economic Community in Brussels, and Spain was officially integrated into the EEC on January 1, 1986. The EU market is still a key partner for Spain, where most exports flow and where the country imports a large share of goods and services. For more information on the history of Spain’s relations with the EU.
Contracts with the Czech Republic
After the division of Czechoslovakia, the agreements concluded before the division entered into force also for the new bilateral relations between the Czech Republic and Spain. Spain and the Czech Republic currently have a Reciprocal Promotion and Protection Agreement signed on December 12, 1990, which entered into force on November 28, 1991. They also have a Double Taxation Treaty signed in May, 1980, which has been in force since June, 1981 (No 23/1982). There is also an Agreement on legal aid, recognition and enforcement of sentences in civil matters, which facilitates compliance with court decisions and mutual recognition of the authenticity of documents issued by the administrations of both countries. An interesting example is the agreement between the Ministry of Education, Youth and Sports of the Czech Republic and the Ministry of Education, Culture and Sports of Spain on the establishment and activities of Czech-Spanish classes at grammar schools in the Czech Republic (No. 35/2001 Coll.).
More information can be found on the website of the Ministry of Foreign Affairs.
Developmental cooperation
The Czech Republic does not provide development aid to Spain.
To complement the aspects of development aid, it should be noted that the Spanish administration includes items in official development aid that otherwise remain part of the bilateral foreign trade policy.
It is primarily about the so-called conversion of receivables in developing countries in favor of the Spanish corporate sector in the area of investment. For the final distribution of aid, Spain uses both NGOs and international organizations (mainly the EU and the UN – UNHCR, FAO, OMS, UNICEF and UNRWA) and international specialized organizations (mainly the International Red Cross and the International Federation of the Red Cross and Red Crescent).
Internally, development aid is managed by the Ministry of Foreign Affairs and Development Cooperation and AECID (Spanish Agency for International Cooperation and Development).
Since 2011, Spain has had a new national method for distributing development aid.
Most resources are concentrated on priority countries (70% of bilateral aid).
A framework strategic plan is drawn up regularly for each country. There are a total of 33 countries, which are divided into 3 groups:
- Least Developed Countries: Ethiopia, Mali, Mauritania, Mozambique, Niger, Senegal and Haiti.
- Middle-income countries: Bolivia, Colombia, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Morocco, Nicaragua, Palestine, Paraguay, Peru and the Philippines.
- Countries of advanced cooperation: Argentina, Brazil, Chile, Costa Rica, Mexico, Panama, Uruguay, Cape Verde, Egypt, Equatorial Guinea, Tunisia and Jordan.
In terms of sector, Spanish aid is primarily focused on sectors and public policies that the recipients themselves identify as priority for poverty reduction.
The basic criterion is that around 20% of Spain’s official development aid will be allocated to basic social services such as healthcare and education.
In general, the sectoral priorities are defined as follows: strengthening the institutional and social system, increasing human capabilities, economic capabilities, environmental sustainability, increasing cultural capabilities and freedoms, increasing women’s autonomy and the ability to prevent conflicts.
More information at: www.cooperacionespanola.es
Prospective fields of study (MOP)
ICT
There is a mature demand for products and services in the field of information and communication technologies in the country. Following the covid-19 pandemic, this sector has been assessed as a priority and across all sectors it has been stated that in the coming period it is necessary to focus on improving digital services, building technological and digital sovereignty and strengthening and expanding internet accessibility and the necessary infrastructure. One of the main priorities will be the development of modern solutions to ensure the functionality of companies and state and public administration.
Opportunities:
- Intelligent networks for more efficient use of energy
- Technologies related to the concept of smart cities (intelligent cities)
- Internet of Things
- Cyber security
- Digitization
- Video game industry
- Electric cars
Energetics
So far, Spain has not been able to sufficiently replace nuclear energy with renewable sources.
After several revisions, the final closure of nuclear power plants was set for the years 2025-2035.
Spain plans to strongly involve green hydrogen in the future, it would like to become a world giant in the production and distribution of green hydrogen.
Opportunities:
- Renewable Energy
- Smart Grids and electrical energy storage
- Sanitation and decontamination, storage of nuclear waste, modernization of poisons. power plants
Healthcare and pharmaceutical industry
It is a strategic sector that has recently seen an increase in the workforce. In Spain, this sector was undervalued before the onset of the crisis and had insufficient bed capacities, which were below the EU average (297 beds per 100,000 inhabitants).
An increase in state investment in this sector is expected, both for the purchase of disposable protective equipment and for increasing the capacity of intensive care units and increasing the number of beds.
Opportunities:
- Disposable protective equipment: masks, respirators, thermometers, protective suits, breathing apparatus, etc.
- Healthcare technologies: equipment for hospitals and special wards (ICUs)
- Technology for the “post-pandemic” period: Disinfection technology based on ozone (disinfection of premises, textiles, etc.)
Defense sector
Spain is one of the major players in the field of the European defense industry and a strong supporter of the trend towards the consolidation of the European armaments policy. He is an active supporter of international defense – industrial cooperation, especially in high-tech sectors, aviation, control and command systems, communication and electronic systems and software. The defense budget for 2022 is EUR 1 billion higher than in 2021, while according to 60% of orders should concern supplies and 30% services.
Services
Following the pandemic, there has been a societal realization in Spain that the country’s economy is fundamentally dependent on the service sector, which accounts for 70% of Spain’s GDP. Tourism in Spain before the pandemic accounted for 13% of GDP. This dependence has led to new strategies and considerations in recent years to reduce the country’s dependence on the service sector and move towards higher value-added services.
Details and other information on individual items and sectors can be found in the Industry Opportunities Map.
