Madrid Doing Business Guide

about business
Doing Business
in the Madrid Region
A guide to investing, working and living in Madrid
FOREWORD
From the President of the Madrid Regional Government,
Esperanza Aguirre
It is a pleasure to present this practical guide to As a demonstration of Madrid´s open and business-friendly
investing and doing business in the Madrid Region. environment, we should mention how Madrid is the first
This guide will help you answer the key questions you may region in Spain for company set-ups. Today around 4,000 of
face when establishing a business in a new location all businesses in Madrid are foreign companies and 40% of
including procedures for setting up a company, operational all foreign firms in Spain have chosen Madrid as their base.
costs, business culture, and the political, fiscal and legal
framework. Needless to say, it is not only this open approach to foreign
investment that makes us attractive, but several other
With this guide we hope to provide a practical illustration of attributes. Madrid has experienced a substantial and
the ease of investing in Madrid and of the business-friendly sustained growth that today makes it one of the most open,
environment that we have strived to create and maintain. dynamic and competitive locations for international
This business-friendly approach is one of our principal business. This together with its recognised expertise in
advantages afforded to international business people. professional services, availability of international education,
and the fast and efficient logistics and communications
In supporting public-private partnership, the Madrid infrastructures, have named Madrid a world-class business
Regional Government acts as a partner in your business environment for international trade and investment. On top
endeavours. Through our trade and investment of this, we enjoy one of the best climates and an enviable
development agency, PromoMadrid, the Regional quality of life. Where better to invest, work or live?
Government of Madrid is committed to supporting the
business entrepreneur every step of the way, helping to Come and discover all that Madrid has to offer. Let us be
make the right investment decisions. your host and guide you along the way”.
1. THE MADRID REGION 5 3. LIVING IN THE MADRID REGION 39
1. Geography and Population 6 1. Legal Status of Foreigners 40
2. Political Situation 7 1.1. Visas 40
3. Economy 8 1.2. Work Permits 41

1.3. Permanent Residence Permit 42
2. BUSINESS IN THE MADRID REGION 11 1.4. Foreigner Identification Card 42

1. Setting-Up 12 2. Personal Taxes 43
1.1. Types of Business Organization 12
3. Living in Madrid 44
1.2. Procedure for Setting Up a Company 15
3.1. General Information 44
1.3. Labour Regulations 17
3.2. Residential Areas 44
1.4. Financial Support 21
3.3. Buying Property 46
1.5. Accounting, Auditing and Corporate Taxation Regulations 22
3.4. Renting Property 48
2. Banking 25
4. Education and Health 49
2.1. General Information 25
2.2. Non-Resident Operations 25 4.1. Education 49
4.2. Health 50
3. Infrastructure 27
3.1. Transport 27 5. Transport Services 51
3.2. Industrial and Technological Base 29 5.1. Airports 51
3.3. Business Parks and Business Centres 30 5.2. Trains 51
3.4. Telecommunications 31 5.3. Underground 51

5.4. Taxis 52
4. Operational Costs 32
4.1. Labour Costs 32 Websites 54
4.2. Utility Costs 33 About PromoMadrid 56
4.3. Real Estate 35
Index
5. Business Culture 36
5.1. Business Communication and Behaviour 36
5.2. Social and Business Interaction 36
5.3. Doing Business 36
5.4. Handy Tips 36
5.5. Business Working hours 37
5.6. Public Holidays 37
1. Map of Madrid Region 6
2. Madrid Region in Brief 7
3. Composition of GDP in the Madrid Region 8
4. Differences between S.A. and S.L. 13
5. Differences between ‘Autonomous Entrepreneur’ and Single Shareholder Company 13
6. Differences between a Branch and a Subsidiary 14
7. Social Security Contribution Bases (Euro) 19

Tables and Maps
8. Social Security Contribution Rates (Percentage) 20
9. VAT Rates 25
10. Main Motorway map of the Madrid Region 27
11. Main Railway Map of Spain 28
12. Map of Main Logistics Centres in the Madrid Region 29
13. Map of Science and Technology Parks in the Madrid Region 31
14. Average Labour Cost in the Madrid Region (Euro per Hour) 32
15. Half-Yearly Electricity Prices for Industry in Spain (Euro per KWh, VAT excluded) 33
16. Gas Prices for Industrial Use in Spain (Euro per Gigajoule, VAT excluded) 33
17. Price of Telephone Landlines in Spain (Euro per 10 Minute Call, VAT included) 34
18. Price of ADSL Packages for Businesses in Spain (Euro per Month) 34
19. Office Rental Prices in the Madrid Region (Euro per Square Metre per Month) 35
20. Industrial Building Prices in the Madrid Region (Euro per Square Metre) 35
21. Business hours in Spain 37
22. Employee Work Permits 41
23. Self-Employed Work Permits 41
24. Special Work Permits 41
25. Map of Residential Areas in Metropolitan Madrid 45
26. Housing Market in the Madrid Region (Euro) 46
27. Rental Market in the Madrid Region (Euro) 48

DOING BUSINESS IN THE MADRID REGION
[1] GENERAL PROFILE OF
the Madrid Region

Geography and Population
Political Situation
Economy
DOING BUSINESS IN THE MADRID REGION > The Madrid Region
[ 1 ] Geography and Population

The Madrid Region, one of the 17 regions whose combined populations add up to
of Spain, is geographically located at the almost a million people. The large towns
centre of the country. The country’s of Alcobendas, San Sebastián de los
capital, the city of Madrid, has been the Reyes, and Tres Cantos are to the north
capital since King Phillip II moved the seat of the city. To the west are the towns of
of government there in 1561 to symbolise Pozuelo de Alarcón, Boadilla del Monte,
Map of the Madrid Region
the unification and centralisation of the Majadahonda and Las Rozas. Finally,
country and to provide a location from Coslada and San Fernando de Henares
which he could efficiently communicate are located to the east of the capital, near
with every corner of the nation. Madrid Barajas International Airport.
Motorway, train and, in some cases,
Today, the Madrid Region Today, the Madrid Region has a underground connections allow for easy
population of more than six million access to and from Madrid city to these
has a population
inhabitants. The city of Madrid, together surrounding areas.
of more than six with more than 40 other medium-sized Colmenar Viejo
million inhabitants towns and cities, make up the Tres Cantos

San Sebastián de los Reyes
Alcobendas
metropolitan area where over five million Las Rozas
Majadahonda
people live. The vast, modern city itself Alcalá de Henares
Pozuelo de Alarcón
MADRID Coslada
has an ever increasing population of Boadilla del Monte Torrejón de Ardoz
Alcorcón
currently more than three million and Móstoles Leganés
Arganda del Rey
accounts for most of the population and Fuenlabrada Getafe
Pinto
economic activity of the region. Parla
Five of the main smaller cities of the

region are located in the south-west of Aranjuez
the region. These are Móstoles, Getafe,

Leganés, Fuenlabrada and Alcorcón
6
Madrid is recognized worldwide for its MADRID REGION IN BRIEF

open green spaces, even more of which Area 8,028 km2 (1.6% of national territory)
are currently being created in both the Population 6,271,638 million (13.59% of population of Spain)
Foreign population 1,005,381 (16.03% of Madrid population)
capital and surrounding areas. The city
Number of Municipalities 179
has 16 square metres of such spaces per
Language Spanish (about 400 million speakers worldwide,
resident, which is higher than both the 3rd most spoken language in the world)
European average and the World Health GDP per capita c32,047 (29% above EU-27 average
Organization's recommendation. and highest in Spain)
Source: National Statistics Institute, Madrid Statistics Institute, Eurostat (2009)
Moreover, mountains are easily accessible

only 50 kilometres outside Madrid.
Plaza de Cibeles According to the Meteorology Institute of
The Plaza Cibeles is located Spain, Madrid enjoys approximately 2,700
in the centre of Madrid city.
hours of sunshine per year.
In the centre of the plaza is
the famous Cibeles Fountain
and each one of the four
corners of the plaza is
[ 2 ] Political Situation
presided by an emblematic
building or palace.
Designed and sculpted in 1782 Spain is governed by a parliamentary The Madrid Region is comprised only of The President of the Madrid Regional
by the architect Ventura monarchy. The current Head of State is the Province of Madrid. Government is Esperanza Aguirre. She
Rodríguez, it is one of the
King Juan Carlos I. As Head of State he As a result of the last general election in belongs to the PP and was re-elected in
most emblematic and
representative points
must appoint the President of the Spain which took place in March 2008, May 2007. The next elections to the
in the city. Government (also known as the Prime the governing party is the Spanish Regional Government will take place in
Minister), who is elected by a system of Socialist Workers’ Party, or PSOE (169 out 2011.
universal suffrage for terms of four years. of 350 parliamentary seats). The
Spain is divided into 52 provinces which opposition is the conservative People’s Spain joined the European Union in
are grouped into 17 regions (Comunidades Party, or PP (153 seats). The current January 1986 and is a Founding Member
Autónomas), each of which has its own Prime Minister is the PSOE’s José Luis of the European Monetary Union (1999).
legislative assembly and regional Rodríguez Zapatero. The next Spanish
government. elections will be held in March 2012.
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[ 3 ] Economy
Spain has the eighth largest economy of
the OECD countries and is one of the
most economically dynamic countries in
the world. The Madrid Region is one of
the most developed regions of Spain.
The region represents 18.7% of Spanish
GDP. Its average annual growth rate since
2000 has been 4%. In 2007 GDP per
capita in Madrid was a32,047 ($43,887*)
at current prices, the highest in the
country and higher than the EU average
(a24,900 or $34,100).
In addition, Madrid is one of the best

performing regions in the EU. The region
has had one of the highest job creation
figures in the EU over recent years.
The Madrid Region accounts for 17% of
Spanish foreign trade. It is the country’s
leading recipient of foreign direct
investment. In 2006 the region received
43% of total foreign direct investment
into Spain, and in 2007 that figure rose to
77%. Thanks to Spain’s EU membership
and the EU’s expansion to include more
countries, businesses established in
A tunnel cut out of stone, following the passage of the tunneling machine for the M-30 motorway Madrid have access to the world’s largest
8
Madrid is one of the best single market of more than 450 million Financial and business services, transport, COMPOSITION OF GDP
people, accounting for approximately 18% real estate, communications as well as percentage of GDP
performing regions Agriculture 0.2
of world trade and more than 28% of the retail and manufacturing are the most
in the EU. The region has world's GDP. important sectors. Business service
Construction 11.5
Industry 10.8
a modern economy in companies are widespread across the
Services 77.5
which the service sector is Moreover, Madrid is an access platform to metropolitan, north-eastern and north- Source: Madrid Statistics Institute (2008)
the main creator of markets in the Mediterranean Arc with western as well as southern towns; while
(*) Average 2007 exchange rate: 1 euro equivalent
600 million people. EU membership has financial services are concentrated in the
wealth and accounts for to 1,3 US dollars
been very beneficial for the Spanish city centre.
77% of regional GDP economy. The Stability and Growth Pact
guarantees a stable economic Madrid’s southern fringe and the nearby
environment, while the introduction of metropolitan area are where industry is
the Euro has simplified transactions, concentrated. In these areas you will find
made access to financial markets cheaper clusters of important automotive,
and easier and enhanced Spain’s electronics, paper and metal working
competitiveness. factories. The northern and north-eastern
areas are also industrial hubs of the
The region has a modern economy in region, with chemical, technological and
which the service sector is the main service companies. In addition, most
creator of wealth and accounts for 77% of Spanish official state agencies and
regional GDP. Here more companies than institutions have their main offices in the
in the Spanish economy as a whole have city.
shifted from agriculture and industry to
services.
9
[
[2] BUSINESS IN
the Madrid Region

Setting-Up
Banking
Infrastructure
Operational Costs
Business Culture
DOING BUSINESS IN THE MADRID REGION > Business in the Madrid Region
[ 1 ] Setting-Up
1.1. Types of Business Organization MOST COMMON TYPES OF BUSINESS ENTITIES

There are several options for a foreign
Sociedad Anónima or S.A. (Public Limited Company or ‘PLC’)
investor wishing to operate in the Madrid
Provides for members’ liability to be limited to their investment in the corporation and
Region. The main options are:
for shares to qualify as publicly tradable securities. Shares in an S.A. may be listed on
• Creation of a Spanish company.
the Spanish Stock Exchange.
• Opening of a local branch/division.
• Association with an already established Sociedad de Responsabilidad Limitada or S.L. (Private Limited Company or ‘Ltd’)
business. Members’ liability is limited to their investment in the company, but this form of
business entity does not allow shares to be traded publicly and, therefore they may
Sole Trader not be listed on the Spanish Stock Exchange.
An individual can also own and manage a Sociedad Limitada Nueva Empresa (New Business Limited Company)
business, providing the capital and Very similar to Private Limited Company, but has the advantage of faster
assuming the risk either as an incorporation and fewer administrative procedures. There are some restrictions
'Autonomous Entrepreneur' (Empresario regarding partners who cannot be legal entities, rather individuals, and cannot be
Autónomo) or creating a Single partners of another New Business Limited Company. There is also a difference
Shareholder Company (Sociedad regarding maximum share capital, which cannot exceed a120,202.
Unipersonal), that can take any of the
three forms mentioned.
12
Traditionally, the PLC (S.A.) has been by DIFFERENCES BETWEEN S.A. AND S.L.
far the most commonly used form. Requirements S.A. S.L.
The Ltd (S.L.) has become increasingly Shared Capital Minimum of a60,101 divided Minimum of a3,005 divided
into shares into shares
popular over recent years. The forms
Capital Contributors Minimum payment of 25% Must be fully paid-up at the
most commonly adopted by foreign
per share upon time of incorporation
investors are: S.A., S.L., branches and incorporation
joint ventures. Some of the salient Debenture S.A. can issue debt as a S.L. cannot issue debt as a
features of these forms are means of raising funds means of raising funds
summarised below:
Individuals who want Individuals who want to operate DIFFERENCES BETWEEN AN ‘AUTONOMOUS ENTREPRENEUR’
personally in Madrid can choose to work AND A SINGLE SHAREHOLDER COMPANY
to operate personally Autonomous entrepreneur Single Shareholder Company
as either ‘autonomous entrepreneurs’ or
in Madrid can choose to create a single shareholder company.
Legal Personality No separate personality for Entrepreneur and company
to work as either entrepreneur and company are different entities
In the case of the former, there is no
Minimum capital No minimum a3,005 (S.L. minimum)
‘autonomous distinction between the entrepreneur and Liability for debts Unlimited Limited to the contribution to
entrepreneurs’ the business, that is to say, the capital
entrepreneur is solely responsible and Tax on Profits Personal Income Tax (IRPF) Corporate Income Tax
or to create a single (Impuesto de Sociedades)
may have to bear personal liability for
shareholder company business debts. It is a form often used by Source: Madrid Regional Government
shop owners and some independent

professionals such as lawyers and The legal personality of the entrepreneur
doctors. and the company are separate.
The procedure for setting up a single
On the other hand, a single shareholder shareholder company is more complex
company can be either an S.A. (Sociedad and costly than that for ‘autonomous
Anónima Unipersonal) or S.L. (Sociedad entrepreneurs’.
Limitada Unipersonal), but it must have
only one member.
13
Single shareholder companies have to DIFFERENCES BETWEEN A BRANCH AND A SUBSIDIARY

comply with the same regulations as Branch Subsidiary
those for an S.A. or S.L., with a few Minimum capital No minimum capital Depends on business type:
a3,005 (S.L.) or a60,101 (S.A.)
differences:
Legal personality Same legal personality as Separate legal personality
• All documents, correspondence and
parent company
announcements from the company Shareholder’s liability No limit on parent Liability limited to the amount
must state that it is a single company’s liability of capital contribution
shareholder company.
• Contracts between the company and Finally, foreign investors may decide to
the sole member must be in written operate in Madrid through the creation of
form. a joint venture with a local company. The
• The decisions of the sole member must joint venture may take any of the legal
be included in the corporate minute forms set out above (usually an S.A. or an
book (the same as if there were a S.L.).
Board).
Madrid at night
La Puerta de Alcalá and
A foreign investor may A foreign investor may also operate in
Calle Alcalá
Madrid through a local branch
also operate in Madrid
(or division) that is an entity with
through a local branch permanent representation and a certain
degree of management autonomy,
but without legal personality in Spain.
As regards foreign investment, the branch
must have a representative who is legally
appointed by the company's head office.
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1.2 Procedure for Setting Up a An easy way to go through the process is

Company to go to the Ventanilla Única Empresarial
Spain operates a very accessible and – the one-stop-shop for businesses.
unrestricted system for foreign There, the administrative process is made
investment and there are almost no much simpler since local, regional and
mechanisms for the control or national institutions are all represented
authorisation of investments before under one roof.
they are made.
Another alternative is sub-contracting
The only exceptions are investments these procedures. Local law firms provide
An easy way to set up a
related to the defence sector and a company-creation and registration
company is to go to the service at limited cost. It is advisable to
investments from tax havens. Other types “Coslada Dry Port”
Ventanilla Única of investment that may be subject to use the services of a Spanish lawyer to The loading docks at the Dry
Empresarial, specific regulations relate to certain set up a business.
Port of Coslada, the largest of
its kind in Europe
the one-stop-shop sectors such as air transport, television,
for businesses for radio, gambling, raw materials,

telecommunications and arms
setting up a company
manufacture.
The procedural formalities necessary to

create a company (whether an S.A. or
S.L.) with the required legal status and
capacity to start any economic activity in
the Madrid Region are listed on the
following page. In some cases additional
steps may be required.
>> see chart on next page
15
STEPS FOR SETTING-UP A COMPANY IN THE MADRID REGION
1st) NIE: If the company is to be established by a non-resident foreigner, he or she will 9th) Declaration of foreign investments: Foreign investments used for the setting-up
need to apply for the Foreigner Identification Number (Número de Identificación de of a company in the Madrid Region must be declared to the Spanish Investments
Extranjero, NIE) in order to undertake the other formalities. Register (Registro de Inversiones) of the Ministry for Industry, Tourism and Trade
(Ministerio de Industria, Turismo y Comercio). The declaration must be made ex-post,
2nd) Company name registration: One must apply for a certificate issued by the
unless the investment source is considered a tax haven by the Spanish legislature.
Mercantile Registry (Registro Mercantil), confirming that the name intended for use is
Investors may be required to present additional documentation.
not already registered.
10th) Economic Activity Tax: Registration with the Tax Office for Economic Activity
3rd) Share capital: Deposit the share capital in a bank account in the company's name.
Tax (Impuesto de Actividades Económicas). The Spanish Tax Office (Agencia
The amount of capital will depend on the type of company to be set up (e.g. for a
Tributaria, AEAT) will ask for certain company details: a description of the activity to
private limited liability company, the minimum deposit will be a3,005.06).
be carried out, the start date of the activity, a description of the business premises,
4th) Power of attorney: The granting of a power of attorney is required for the etc. An official activity code will be allocated to enable the company to pay this tax.
incorporation of the company if the individual or representative of the legal entity
11th) VAT: Registration for Value Added Tax (IVA).
cannot be present in Madrid to complete the other formalities.
12th) Business Opening Licence: Application for the business opening license to the
5th) Deed of incorporation: the founding members sign the company's Deed of
Town/City Council (Ayuntamiento). The company will be required to present the floor
Incorporation before a notary that includes explicitly the appointment and acceptance
plan of its business premises and its general location, a description of the company
of the company directors. At that time, the name certification and bank receipt,
activity and the receipt for local tax payment.
confirming that the appropriate deposit has been made, will be required.
13th) Social Security Authority: Registration of the company with the Social Security
6th) NIF: Application for a company Tax Identification Code (NIF) at the local Tax
Authority (Tesorería General de la Seguridad Social).
Office (Delegación de Hacienda).
14th) Opening of the work place: Communication of the opening of the workplace or
7th) Stamp duty: Payment of stamp duty at the local Tax Office. The Deed of
resumption of economic activity must be filed with the Regional Labour Authority
Incorporation and NIF will be required. This must be done within 30 business days of
(Dirección General de Trabajo) within the first 30 days of the start of activities and
incorporation.
the opening of the workplace.
8th) Company registration: Registration of the company with the Mercantile Registry.
Deed of Incorporation will be required, and the registration needs to be made within 2
months after the Deed is granted. Any company interested in doing business with a
Spanish company may consult the Company's Registry in order to seek accurate
information about that company.
16
The procedure to start working as an hours of time actually worked, calculated

‘autonomous entrepreneur’ is simpler: on an annualised average basis.
An irregular distribution of the working
THE PROCEDURE TO START WORKING AS AN ‘AUTONOMOUS ENTREPRENEUR’
hours throughout the year may be agreed
1st) Declaration of commencement of activities to the Tax Office.
through collective bargaining or specific
2nd) Registration for Economic Activity Tax, as above.
agreements.
3rd) Registration of the ‘autonomous entrepreneur’ with the Social Security Authority,
in the self-employed workers’ social security system. OVERTIME
4th) Communication of the opening of the workplace to the Regional Labour Overtime worked can be taken as time off
Authorities, as above. within four months of the date on which
the overtime is worked. If payment for
The main costs of the procedure are: Regional and local institutions such as overtime is agreed, the hourly overtime
• Stamp duty: 1% of capital. rate cannot be less than the normal

IMADE and the Madrid Chamber of
hourly rate. Other than in exceptional
• Notary fees: approximately a90 for the Commerce provide advice and assistance
Spanish regulations first a6,010 of share capital; for capital to help entrepreneurs with these
cases, overtime is voluntary and, if paid,
cannot exceed 80 hours per year.
establish a maximum in excess of that figure, a rate between incorporation procedures.
Overtime taken as time off does not
of 14 public holidays 0.03% and 0.45% is applied. When the
count towards the 80-hour annual limit.
total amount exceeds a6,010,121, the fee 1.3. Labour Regulations
each year
can be freely negotiated. WORKING AGE
TIME OFF
• Company Registry fee: a6.01 for the The minimum working age is 16.
It is mandatory to take a minimum one
first a3,005 of share capital; for capital Overtime, night shifts and certain
and a half days off per 7 day week, which
in excess of that figure, a rate between hazardous or unhealthy activities are
may be accrued for periods of up to 14
0.005% and 0.1% is applied. not allowed under the age of 18.
days. Workers under 18 are entitled to two
The maximum fee is a2,181. uninterrupted days off per week.
• Business opening license fee: this is a WORKING HOURS
local tax that is paid only once. In the Working hours are as specified in PUBLIC HOLIDAYS AND VACATIONS
city of Madrid, for the majority of cases, collective bargaining agreements or Spanish regulations establish a maximum
the amount is a390. individual employment contracts. The of 14 public holidays each year, taking into
• Other costs: e.g. professional fees. maximum statutory working week is 40 account national holidays (which are the
17
same throughout Spain), regional and The law grants incentives to companies
local holidays. In addition, workers have that give permanent contracts, especially
the right to an annual paid vacation when the worker belongs to specific
period of at least thirty calendar days. groups: women, young people, people
Possible vacation dates should be over 45, people with disabilities, etc.
confirmed at least two months in advance Temporary recruitment is possible
(most of the vacation is usually taken through a Temporary Job Agency
during the summer period). (Empresa de Trabajo Temporal, ETT).
ETTs select and provide temporary
RECRUITMENT workers to other companies. A work
Employment contracts may be signed for contract exists between the ETT and the
fixed or indefinite terms. Unfair termination worker, not between the client company
of contract entitles the worker to receive and the worker.
compensation. Temporary contracts need to
be justified under certain circumstances Employment contracts are usually full-
established by law. Temporary contract time, but part-time contracts are possible.
without this justification would be deemed Part-time workers have the same rights
permanent. Temporary employees generally as full-time workers, which are defined
become permanent after working 24 months considering the hours worked.
in a period of 30 months. There are two main
types of temporary contract: DISMISSAL
• Training contracts: work experience Legislation regulates three principal
contracts (for people with degrees or causes for the dismissal of an employee:
other qualifications) and trainee • Collective redundancy: when the
contracts (for people without dismissal affects a large number of
qualifications). workers in a determined frametime (the
Cuatro Torres Business Area (CTBA)
• Other temporary contracts: contracts minimum number depends on the size
The Four Towers Business Park is located just by the Paseo de la Castellana’s north end.
The business park is formed by the four tallest buildings in Madrid and, in fact, in all of Spain: for a specific project or service, of the enterprise).
Torre Caja Madrid (250 m.), Torre de Cristal (249 m.), Torre Sacyr Vallehermoso (236 m.) contracts due to production overload A collective redundancy requires
and Torre Espacio (223 m.). and substitution contracts. consultation with workers'
18
representatives and an administrative than in a justified dismissal (45-days SOCIAL SECURITY CONTRIBUTION BASES (EURO) 2009
procedure to obtain approval from the salary per year worked, up to 42- Minimum Base Maximum Base
labour authorities. months salary). EUROS PER MONTH
Engineers and Graduates 1,016.40 3,166.20
• Objective causes: these include • In some serious cases (that is violation
Qualified Technicians and Assistants 843.30 3,166.20
incapacity, economic or production of fundamental rights), the dismissal
Clerical and Workshop Supervisors 733.50 3,166.20
reasons, worker’s prolonged will be declared null and the employer Unqualified Assistants 728.10 3,166.20
absenteeism, etc. The dismissal will be required to immediately Clerical Officers 728.10 3,166.20
requires prior written notice of at least reinstate the worker and pay any Messengers, etc. 728.10 3,166.20
30 days. unpaid salaries. Clerical Assistants 728.10 3,166.20
EUROS PER DAY
• Disciplinary action: this includes
Foremen Classes 1 and 2 24.27 105.54
serious absenteeism, insubordination, MINIMUM WAGE
Foremen Class 3 and Craftsmen 24.27 105.54
misconduct, bad faith, etc. The Spanish legislation establishes a Labourers 24.27 105.54
dismissal requires written notice. minimum wage for all workers regardless Workers Under 18 Years of Age 24.27 105.54
of their job, called Inter-professional Source: Ministry for Labour and Immigration (2009)
A dismissal fulfilling the criteria for legal Minimum Wage (Salario Mínimo
reasons is a justified dismissal. If there is Interprofesional). Its amount is raised
no legal cause or the dismissal annually, in line with inflation and the and job categories for the purpose of
procedure is incorrect, it is considered labour policy of the Government. determining their social security
an unjustified dismissal: contributions. Each category has
• In case of a justified dismissal for an In 2009, the minimum wage was a8,736 maximum and minimum contribution
objective cause, the worker may be per annum for a full-time worker. This bases, reviewed annually. Each year the
entitled to severance pay, consisting of figure should be adjusted according to minimum bases are increased according
20-days salary per year worked, up to the hours worked in the case of part- to the professional categories and
12 months' salary. time employees. contribution groups, by the same
• In case of a justified dismissal for percentage increase in the minimum
disciplinary reasons, the worker is not SOCIAL SECURITY CONTRIBUTIONS inter-professional wage.
entitled to severance pay. The Under the general system, both
employer can either reinstate the employer and employee contribute to
worker or terminate the contract, Social Security. Employees are classified
making a severance payment higher according to a number of professional
19
The social security contribution is SOCIAL SECURITY CONTRIBUTION RATES (PERCENTAGE)

calculated by applying certain rates to the Employer Employee Total
appropriate base. Rates are calculated by General Contingencies 23.60 4.70 28.30
Unemployment:
the adding together of several different
- General Rule* 5.50 1.55 7.05
amounts (see chart).
- Temporary Contracts 6.70 1.60 8.30
- Part-time Temporary Contracts 7.70 1.60 9.30
In July 2008 the contribution rate for Professional Training 0.60 0.10 0.70
unemployment under the ‘General Rule’ Salary Guarantee Fund 0.20 - 0.20
rate was lowered from 7.30 to 7.05. Total Contribution:
- General Rule* 29.90 6.35 36.25
The employer's contribution to Social - Temporary Contracts 31.10 6.40 37.50
- Part-time Temporary Contracts 32.10 6.40 38.50
Security may be increased for labour
Prototype of a payload *The General Rule includes mainly indefinite contracts.
adaptor for the European accidents and professional sickness
Source: Ministry for Labour and Immigration (2009)
Space Agency’s Arianne 5 contingencies, depending on the
rocket at the National
company's activity.
Aerospace Technology • Companies between 31 and 49 and functional (they may be negotiated at
Institute, Torrejón de Ardoz employees: employees have the right to the State level, territorial level or at
EMPLOYEE REPRESENTATION
elect up to three staff representatives. company level) application. Collective
Trade unions represent workers’ interests • Companies with 50 or more bargaining has become a decisive factor in
territorially and sectorially. At company employees: the workers are represented the reform of Spanish labour legislation.
level, staff are represented by workers’ by a workers' committee of a mimimum Such agreements are generally for a term
committees or other representatives that of 5 representatives. of one or two years, although they can be
may or may not be associated with a extended to longer periods.
trade union. The right to elect employee COLLECTIVE BARGAINING
representatives is as follows: AGREEMENTS ACQUISITION OF A BUSINESS
• Companies between 6 and 10 Collective bargaining agreements are When an entrepreneur sells his or her
employees: all employees must negotiated between employers or business to another entrepreneur, both
unanimously choose to be represented. employers’ associations and employee will be liable for the next three years for
• Companies between 11 and 30 representatives, and the parties are legally the labour obligations of the business at
employees: there is an automatic right bound by the agreement. They have the time of sale. The new owner takes
to elect a staff representative. industrial (governing a certain industry) over Social Security rights and
20
obligations from the former proprietor, the Madrid Regional Government. inter alia, universities, public research
and all commitments regarding pensions Many incentive programmes apply to institutions, foundations, administrative
and further social protection matters. Small and Medium Enterprises (SMEs) and institutions and companies. Projects of
The buyer and seller have an obligation offer them better conditions than those regional interest, cooperation among
to provide all relevant information to applying to large companies. different agents and the training of
employees which includes the researchers may be subsidised under this
consequences and planned measures RESEARCH AND DEVELOPMENT programme.
relating to the employees. There is a (R&D) INCENTIVES
mandatory period for discussion of these At regional level, R&D incentives form the The regional government provides
measures with employees' main part of the PIE and PRICIT incentives for R&D in its strategic sectors
representatives. programmes and have been developed to - the IT, biotechnology and aerospace
foster the creation of technology-based industries, by way of non-refundable
1.4 Financial Support companies and to improve the quality of grants of up to a500,000. The grants may
The Madrid Region offers human resources. provide finance at percentages ranging
PROGRAMMES from 25% to 100% for industrial research,
attractive incentives and
In addition to a national general The PIE programme offers finance for feasibility studies and prototypes. Medium
tax credits for companies programme of financial incentives, the three types of project: the creation of a sized enterprises have the advantage of a
located in the region Madrid Region offers attractive incentives business, externalising R&D and locating 10% bonus in these programmes and
and tax credits for companies located in R&D in-house. Only the latter is available small enterprises a 20% bonus.
the region. The two most relevant to large companies, the other two being
regional incentive programmes are the aimed exclusively at SMEs. These These incentives complement the existing
Business Innovation Plan (PIE) and incentives can be offered in the form of R&D incentives at national level under the
Regional Plan for Scientific Research and non-refundable grants, reimbursable cash National R&D Plan. This Plan is a set of
Technological Innovation (PRICIT). advances and soft loans. Up to a300,500 long-term programmes focused on the
can be granted to a project under this creation and improvement of
Furthermore, there are four specific programme. infrastructures, human resources, R&D
incentive programmes for the IT, projects, institutions, technology transfer
Biotechnology, Aerospace and Renewable The PRICIT programme promotes the and the ‘internationalization’ of Spanish
Energy industries, these being a priority integration and coordination of the R&D; the priority sectors being health and
for the economic policy departments of regional R&D network which includes, biotechnology, energy, nanotechnology as
21
well as new industrial processes, EMPLOYMENT PROMOTION other countries relate to: treasury stock, Consolidated annual financial statements
telecommunications and IT companies. INCENTIVES treatment of exchange differences, R&D are required for companies that own a
The Plan covers the period between The Torres Quevedo Programme, which expenses, recording of leased assets, given percentage of another company’s
2008 and 2011, and represents a is run by the Ministry for Science and investment valuation and adjustments shares, have a majority of votes relating
complete renewal and reorganization of Innovation (Ministerio de Ciencia e for preceding years. to the other company’s shares, have
the previous R&D support schemes with Innovación), is aimed at new R&D power to elect the majority of the other
the purpose of making them more projects and promotes the recruitment As a general rule, all companies must company’s board of directors, or have
efficient and comprehensive. of skilled scientists in entities that record all transactions in a book which elected the majority of the other
require specialised personnel. Through must be ‘legalized’ by the Mercantile company’s board for two years prior to
BUSINESS CREATION INCENTIVES this programme, businesses can receive Registry within four months of the end preparation of the statements.
At regional level, there are incentives for a subsidy of up to 75% of the cost of of the tax year. Under Spanish
business creation under the PIE recruiting individuals with PhDs and regulations, companies also have to file: AUDITING
Programme (developed to foster the ‘technologists’ (who are university • Annual Balance Sheet. Every company in Spain must be audited
creation of technology-based companies) graduates with at least 1 year’s • Profit and Loss account. and file the audit report and financial
to support start-ups with a focus on experience in R&D activities). For SMEs, • Supplementary Notes (Memoria). statements with the Mercantile Registry
research as well as the technical and subsidy rates are: 60% for industrial • Statement of changes in equity. if any of the following conditions apply:
academic fields. research projects, 75% for feasibility • Cash flow statement. • Its shares are traded on the Spanish
Stock Exchange.
studies prior to research, 35% for
• It issues bonds for sale to individuals.
This programme is complemented at technological development and 50% for These financial statements must be
• It conducts financial intermediation.
national level by the Neotec Programme, feasibility studies prior to development. prepared and approved by the board of
• It is involved in private insurance
which includes interest-free seed loans of directors within three months of the end
(as defined by the corresponding law).
up to a400,000 for technology-based 1.5 Accounting, Auditing, and of the financial year and then approved
• It receives subsidies from the public
start-ups, as well as investment in venture Corporate Taxation Regulations by the shareholders within the first six
sector, or provides goods or services
capital funds that invest in technological months of that financial year.
to the public sector.
companies. ACCOUNTING REQUIREMENTS These documents, along with a
The accounting principles and certificate confirming the shareholders' Public Limited Companies (Sociedades
There is also the CEIPAR Programme which requirements in Spain, which are based approval of the financial statements and Anónimas) and Private Limited
supports the creation of companies within on the Fourth EU Directive, are very their proposal for the distribution of the Companies (Sociedades Limitadas) must
technology parks and incubators providing similar to international standards. company's profit, must then be filed with be audited, except those that meet two
up to a100,000 to the new company. The most significant differences with the Mercantile Registry. of the three following requirements:
22
• Assets below a2.85m. exceeds the average amount invested in

• Net sales not exceeding a5.7m. the preceding two years, the tax credit
• The maximum average number of will be increased to 42% of the excess
employees is 50. amount. R&D and technological
expenditure in other EU and European
However, if a company meets all these Economic Area member states qualifies
criteria, other factors may mean auditing for this tax credit.
is still required, for example, at the • R&D personnel expenses: 17% for
shareholders’ request or companies personnel assigned exclusively to R&D
within certain sectors. activities.
• R&D investments: 8% of investments
CORPORATE INCOME TAX made in certain assets relating to R&D.
The Spanish Government reformed • Among other activities, technological
Corporate Income Tax (Impuesto de innovation in industrial design and
Sociedades) recently, and new legislation process engineering: 8%.
came into effect on 1 January 2007.

This reform provides for a reduction in tax In particular cases, the tax base for this
rates and the progressive simplification of tax credit is reduced by 65% of any
incentives and deductions, streamlining subsidies received to encourage such
the calculation of the tax. activities.
A new law was approved in July 2007

With the reform, the general tax rate
giving a new incentive to R&D. As of 1
from 2008 is 30%. For SMEs the rate is
January 2008, companies only pay tax on
25% for the first a120m of taxable base
50% of the profit arising from patent
and 30% for the remainder.
assignment. The limit is six times the cost
There are several tax credits related to of the assets created by the company
R&D: granting the patent rights.

“Bolsa de Madrid”
The Bolsa de Madrid, the Spanish Stock Market, • R&D expenses: 25% of expenditure on
located in La Plaza de la Lealtad, Madrid R&D in the tax period. If investment
23
Spanish legislation also provides tax plans and the recruitment of workers with dividend will be taxable at the reduced subsidiary or branch) will be subject to
incentives to promote the internationali- disabilities); tax credits related to cultural rate set out in the treaty. VAT. Traders are generally entitled to
zation of companies. These incentives investments (works of art, cinema and • If the parent company is non-EU offset VAT paid against VAT charged.
make Spain an adequate platform for book publishing); other tax credits (ICT in resident and from a non-treaty Spanish VAT legislation implements the
multinational enterprises to invest in small companies, environment, navigation country, the dividend will be taxable at EU Directives on the tax, whose main
third countries. devices for vehicles, foreign subsidiaries the standard rate of 18%. rules are harmonised in the different
and reinvestment). • In the case of Spanish holding member states.
Among these incentives, it is worth companies, remittance of dividends to
highlighting the participation exemption Generally, tax credits are limited to 35% foreign entities is not subject to tax Companies must submit a VAT
regime, the special tax regime provided of the gross tax payable (minus tax (except for dividends remitted to a tax declaration either every month if the
for foreign-securities holding entities allowances and tax credits relating to haven). Spain has one of the most company has a turnover above
(Spanish holding companies, also known domestic and international double competitive regimes in Europe for a6,010,121.04 or every three months in
as ETVEs), the recognition of losses taxation). Companies that have already holding companies. all other cases.
incurred by foreign branches and deducted the maximum amount for the
subsidiaries, the amortization of current fiscal year will be able to carry VALUE ADDED TAX
financial goodwill arising from the over these credits for ten or fifteen VAT (IVA, Impuesto sobre el Valor
acquisition of participations in foreign years. Añadido) is an indirect tax on
entities, the export-related investment consumption that does not generally
credit (all of which are included in REMITTANCE OF PROFITS imply any cost to traders or
Spanish Corporate income tax The distribution of dividends may be professionals, but only to end-
legislation) or the incentives for workers taxable by non-resident income tax consumers, since VAT is added to the
assigned abroad (e.g. Spanish personal (Impuesto sobre la Renta de No final price of products and services. All
income tax legislation establishes a large Residentes), depending on the supply of products, provision of services,
exemption for salary income earned by following: importing of goods and intra-EU
employees who work abroad, but who • If the parent company is EU resident, purchases of goods are subject to VAT, if
remain tax residents in Spain). the remittance or distribution is they are undertaken by professionals or
generally exempt. companies.
There are other tax credits that can be • If the parent company is non-EU
briefly summarised as follows: tax credits resident and from a country that has a A foreign company with a permanent
related to labour (training, retirement double taxation treaty with Spain, the establishment in Spain (such as a
24
VAT RATES
Main affected products
16% (general) Most products and services
7% (reduced) Foodstuffs (except alcoholic beverages), water, cultural activities, housing, transport, hotels and restaurants,
veterinary medication, etc.
4% (super-reduced) Staple foods, medication, books and periodicals, some state housing, some products for disabled people.
0% (exempt) Health services, official education, insurance, house rental, exports, intra-EU delivery of goods.
Source: Ministry for Economy and Finance
[ 2 ] Banking
Mercamadrid at 4 a.m.,
distributing fish throughout 2.1 General Information ATM machine belonging to the same butchers, etc., often only accept cash, but
the region and neighbouring
The city of Madrid is the financial centre network (there are three ATM networks in larger and more upmarket establishments
provinces
of Spain, and most major national and Spain, each one serving a group of accept credit cards.
international banks have their Spanish banks). The Central Bank of Spain (Banco
headquarters and many branches here. de España), with headquarters also in 2.2 Non-Resident Operations
These include Citibank, BNP Paribas, Madrid, provides information about the In the context of banking, a resident is a
Societé Générale, HSBC; investment commissions charged on all transactions person who usually resides in Spain or a
banks such as Merrill Lynch and JP by every bank. company which has its headquarters in
Morgan; and others. The centre of the city Spain or the Spanish subsidiaries of a
is a hub for financial activities, especially The most common methods of payment foreign entity.
along the main north-south axis of the in Spain are bank transfers and bank
city (Paseo de la Castellana). cheques. Other forms of payments are The concept of “usual residence in
banker’s drafts, promissory notes and Spain”, as defined by tax law, means
Most banking transactions incur a charge. cash. Paying utility charges and rent is being in Spain for more than 183 days a
Withdrawing cash from one of your bank’s usually done by direct debit. The use of year, maintaining one’s main economic
own ATM machines with a debit card is credit cards is not as extensive as in interests and activities in Spain, or when
exempt, and many banks also allow other countries, but it is increasing. one’s spouse and minor children have
withdrawals without commission from any Small traditional shops such as grocers, their usual residence in Spain.
25
Non-residents can open any type of bank Operations and transactions that imply However, flows of capital are recorded for
account in registered Spanish financial flows of capital to and from Spain are statistical reasons in order to be able to
entities. A passport and non-residence subject to few restrictions, and no produce a balance of payments.
certificate (which can be obtained authorisation is necessary.
through the bank) are required. These operations include inward and
Bank accounts for residents and non- outward flows or transfers of means of
residents are distinguished from each payment, bank transfers, payments and
other with different names and cheque receipts and changes in financial
books. Otherwise, banking transactions accounts.
for residents and non-residents are
identical.
Operations and FLOWS OF CAPITAL
transactions that imply • Payments and receipts in cash or by bank cheques (either in euro or a foreign currency) between residents and non-residents must
flows of capital to and be declared by the resident if the amount exceeds a6,000.
from Spain are subject to • Non-residents who want to use cheques or cash for an international transfer or a payment to a non-resident’s bank account in
few restrictions, and no Spain must prove the origin of the funds.
authorisation is • Outward transfers of cash, bank cheques and other means of payment are unrestricted but must be previously declared if the
necessary amount exceeds a6,000 per person. Inward transfers of means of payment are subject to the same rule.
26
[ 3 ] Infrastructure
3.1 Transport heavily in the future, focusing on inter- motorways (A-1 to A-6), four ring roads (M-
Over the last decade Spain has upgraded city and urban transport, water supply 30, M-40, M-45 and M-50) and four radial
most of its transport infrastructure. The and the environmental infrastructure. toll highways (R-2 to R-5), which make
Government plans to continue investing travel to and from the rest of Spain highly
The Madrid Region has developed its own convenient and efficient. Several projects
Main Motorway Map Infrastructure Programme, the aim of (such as the construction of the M-45 and
of the Madrid Region
which is to provide spaces for production M-50) have resulted in a considerable
A-1 network operations that respond to its improvement of communications among
needs, including: innovation, globalisation, logistics centres in the region.
SEGOVIA competitiveness, environmental and
GUADALAJARA
knowledge management. RAIL
There is a railway network of over 15,000
M-607 R-2 MOTORWAYS kilometres in Spain. It is centralised in
A-6
The motorway network in Spain has a Madrid so that most routes that cross
A-2
radial design, with the city of Madrid in Spain north-south or east-west go
M-40
the centre. The city is the nucleus of through Madrid. The development of a
M-50
ÁVILA merchandise distribution in Spain. high-speed railway network is also
M-30 MADRID The maximum distance from the city to centralised in Madrid. As of early 2008,
any other place on the Iberian Peninsula there are approximately 1,500 kilometres
R-3
(including Portugal) is 700 kilometres and of high-speed lines in Spain (Madrid-
R-5
M-45 the travel time (by road) to the South of Barcelona, Madrid-Cordova-Seville,
A-5
TOLEDO France, Northern Morocco or any place on Madrid-Cordova-Malaga and Madrid-
A-42
A-3 CUENCA the Iberian Peninsula is less than 12 Valladolid). Spain boasts the second
hours. largest network in Europe after France.
R-4 A-4 In the Madrid Region, the motorway According to plans, by the year 2009
network is made up of six radial national Madrid will be connected by high-speed
27
train to the French border and by 2010 it There is a trend for logistics facilities to Main Railway Map of Spain
will be connected to the Eastern be located in or near the airport area,
Bilbao
Mediterranean coast. There are more which increases synergies between
La Coruña
construction plans in the longer term, different modes of transport and favours
Main Regular Lines
which will provide further connections to multi-modal transportation of Huesca
Valladolid
most large Spanish cities and also to merchandise. Vigo
Zaragoza
Barcelona
Portugal, thereby building one of the Fast Lines
Tarragona (plus 200 km/h max)
largest and most comprehensive LOGISTICS CENTRES
Madrid
networks in the world. The region has become the most
High Speed
important logistics platform in Southern (plus 300 km/h max)
Valencia
AIRPORT Europe, thanks to several projects that
Madrid Barajas International Airport is have been carried out to improve Madrid High Speed
Córdoba Alicante (under construction)
the main port of entry into Spain, as a competitive alternative to other
Jaén
managing 50% of international and 74% European regions. The logistics Sevilla
of national air passenger traffic. platforms have been coordinated and

Cádiz
With over 50 million passengers, 469,740 integrated to provide a competitive Málaga
operations and 328,985 tons of cargo in service for inter-modal transport by the
2008, it is the largest airport in Spain. different transportation centres in the
In terms of passengers, it is the fourth region.
largest airport in Europe and the tenth There are many logistics centres in the dry port. It is also close to the Coslada projected. Nine of these projected
largest airport in the world. Barajas has region but most of them are located in Transport Centre. The Coslada dry port centres are included in the new Regional
become a huge transport hub for Europe, three main areas: the Henares Corridor is a hub for distribution activities, since Plan for the Development of Logistics
Latin America, and Northern Africa. to the east, the southern metropolitan it receives freight trains from the four Infrastructure.
area and the Barajas-Coslada logistics main Spanish seaports (Valencia,
In 2006, thanks to the construction of platform. Barcelona, Bilbao and Algeciras). This plan includes the creation of the
the new T-4 terminal, Barajas has biggest inter-modal platform in
become the second largest airport in The most important of these three is the Existing logistics services are set to Southern Europe, with a surface area of
Europe in terms of capacity, which has Barajas-Coslada logistics platform, increase in the near future, with seven 15 million square metres, to be located in
been increased to handle up to 70 whose infrastructure includes the logistics centres currently under Arganda del Rey, as well as the
million passengers a year. Barajas airport air cargo centre and a construction and a further fifteen expansion of the Barajas air cargo
28
Map of Main Logistics Centres 3.2 Industrial and Technological

in the Madrid Region Base
Tres Cantos 1 Coslada Transport Centre The Madrid Region has a strong and
16
San Sebastián
M-607 de los Reyes 2 Coslada Logistic Platform and Dry Port diverse industrial and technological base.
A-6 A-1 17
Alcobendas 14 Together the industry and service
3 Barajas Air Cargo Centre
R-2 4 Abroñigal Renfe Terminal
sectors account for 99.8% of GDP.
Las Rozas Barajas Airport
Moreover, Madrid is the leading Spanish
A-2 5 Mercamadrid
Majadahonda region as regards R&D expenditure, at
15 6 Madrid Transport Centre
3 Alcalá de
Henares
1.96% of regional GDP (the Spanish
Pozuelo de Madrid 7 Vicálvaro Renfe Terminal
Alarcón average is 1.27% GDP and that of the EU
Torrejón 8 Villaverde Renfe Terminal
Boadilla 1 2 de Ardoz 1.83%). It should be noted that 29% of
de Monte
Coslada San Fernando
San Fernando 9 Neisa Sur
M-30 Henares
de Henares
Henare Spanish R&D professionals and 60% of
10 CADSI telecommunications professionals are
4 7
A-5 M-40 11 Carpetania Logistic Centre based in Madrid. The proportion of
6
5 12 Logistic Centre Madrid Sur working population dedicated to R&D
Alcorcón
Móstoles 8 R-3
activities in the region (1.63%) is higher
M-45 13 Automotive City
Leganés
9 than the EU average (1.48%).
Getafe 14 Logistic Centre Madrid Este
13
Fuenlabrada 11 A-3 15 Prologis Alcalá
M-50 12 10 Arganda
R-5 del Rey As far as the information society and
16 San Agustín de Guadalix
the use of information technologies in
17 Meco Logistic Centre
Parla Pinto A-4 business and industry are concerned,
A-42 R-4
18 “Las Canteras” Industrial Park Madrid is one of the most advanced
18 19 19 “La Sendilla” Logistic Centre regions in Spain. An example of this is
the fact that the proportion of companies
centre. It is worth mentioning that de Salvanés (south-east of the region) An improvement of the region’s road with Internet connection is 97%. Of
among the nine logistics centres to be and will handle freight from Valencia, network is also planned in order to these, 64% have a website, 7% above
developed are the construction of two and the other will be located in Móstoles connect all the logistics nodes, together the Spanish average, and the proportion
more dry ports that will greatly increase (South Metropolitan Area) and will with the development of a railway by- of companies that have interacted with
the region’s capacity for shipped goods. manage goods from Lisbon. pass for merchandise that will markedly the public sector using the internet is
One of them will be located in Villarejo improve delivery times. 72%, 5% above the average.
29
There are currently fourteen Universities innovation. There are currently four communications, etc.), the incubators
in the region plus two distance-learning Technology Centres in the region, all focus on offering the means for carrying
universities, almost all of them offering members of FEDIT (Spanish Federation of out R&D, mainly by providing access to
engineering degrees (Universidad Innovation and Technology Entities), high-technology equipment for research.
Politécnica, Universidad de Alcalá, which specialise in the building materials, They also provide business consulting
Universidad Carlos III, Universidad welding, wood and paper industries. services, helping entrepreneurs to
Complutense, Universidad Autónoma, elaborate their business plan, assisting
Universidad Rey Juan Carlos, Universidad Science and technology parks are them in the process of creating the
Pontificia Comillas, Universidad Europea infrastructures designed to provide company, etc.
de Madrid, Universidad Alfonso X el business premises for high tech
Sabio, Universidad Antonio de Nebrija, companies. They provide access to areas 3.3 Business Parks and Business
Universidad Camilo José Cela, with business accommodation for Centres
Universidad CEU San Pablo, Universidad industries committed to technological The Madrid Region has developed a
The Madrid Region has Francisco de Vitoria, Universidad innovation. Universities and public significant number of business parks over
Pontificia de Salamanca, UNED, research agencies and institutes also the past few years, offering companies
developed a significant
Universidad a Distancia de Madrid). have a presence in these parks, both premises and services concerned
number of business parks The findings of R&D undertaken in encouraging contacts and synergies with with business development (technology
over the past few years, Madrid’s universities are disseminated businesses. In 2009 at the time of press, transfer, venture capital, marketing etc.).
offering companies both nationwide by the Offices for the Transfer six technology parks are partially or
premises and services of Research Results (RedOTRI). completely built with four more under The business parks try to attract both
Their mission is to match industry needs construction in Madrid. service and manufacturing companies.
concerned with business
with research being done in university They are intended to have maximum
development departments. Almost all technology parks have a flexibility regarding the use of land, so
business incubator. Business incubators that they are able to adapt to the needs
The gap between science and industry is are aimed mainly at start-ups with a of business. Most of them are located
bridged by Technology Centres. These technological base or significant R&D near major roads with hubs such as
are private sector, non-profit institutions, activity, university spin-offs, start-ups Alcobendas (A-1 road), Getafe (A-42),
which assess and support companies, created to market research findings, etc. Fuenlabrada (A-42 and M-50) and Pozuelo
especially Small and Medium-Sized Besides providing office space and related de Alarcón (A-6 and M-40). Business
Enterprises, with technological services (meeting rooms, centres are smaller than business parks,
30
Map of Science and Technology Parks and instead of offering land and buildings,
in the Madrid Region they offer office premises for rent. They
are usually aimed at small businesses and
start-ups. The centres offer extra services
such as meeting rooms, restaurants,
Science and Technology Park telephone lines and internet access,

Ciudad del Conocimiento security, cleaning, and, in some cases,
Ae BS ICT En O Parque Científico Park under construction
Parque Tecnológico business consulting. Most centres limit
de Madrid Colmenar Viejo de Madrid
Ae BS ICT In BS ICT En Ev Nt the maximum time that companies can
Parks associated to a university
Tres Cantos Madrid-Cantoblanco stay to between three and five years.
There are also private companies that
Ae Aerospace
offer services similar to business centres.
Tecnoalcalá
Montegancedo Ch ICT BS BS Biotechnology and Life Sciences Many towns near Madrid have business
Ae BS ICT Alcalá de Henares
Boadilla del Monte centres, including Alcobendas, San
ICT Information and Communication Technologies
Sebastián de los Reyes, Alcalá de
Ev Environment Henares, Coslada, Leganés and Alcorcón.
Madrid En Energy
Móstoles Tecnológico Campus Sur Vallecas
ICT En O
3.4 Telecommunications
Au In O
Móstoles Ch Chemicals
Madrid - Vallecas The Madrid Region is the centre of the
In Industry and Engineering telecommunications industry in Spain,
with the most important production and
Au Automobile
service companies based here. The region
Parque Tecnológico
Leganés Tecnológico Área Tecnológica del Sur Nt Nanotechnology and Materials receives more than half of all business
ICT In Nt Ae ICT En In
Ciudad de Madrid
Ae En Au Nt O
Leganés Getafe investment in telecommunications.
Madrid - Villaverde O Other
All the principal global operators in

telecommunications-related industries
have a presence in Madrid, whether as
hardware/software suppliers, data
warehouses, data-mining companies,
31
knowledge management, remarketing, even higher (95%). The percentage of Ono, Orange (France Telecom) and
telemarketing, personnel planning or HR homes with broadband Internet access is Telefónica. The telecommunications
management companies. 58%. These figures are significantly market has been fully deregulated since
higher than the Spanish average. 1998.
Landline telephone penetration is high (in Telecommunications operators with
2008 88% of homes had a landline), licenses in Madrid include, among others,
while mobile telephone penetration is BT, Colt Telecom, Ibercom, Jazz Telecom,
The minimum wages for

[ 4 ] Operational Costs
each type of job category
are usually negotiated 4.1 Labour Costs least twice per year. However, payment in
and set out in collective The official minimum wage is established 12 equal monthly instalments can be
bargaining agreements by the Government each year, and in negotiated in collective bargaining
2009 it stood at a8,736 for employees agreements.
over 18. However, the minimum wages for
each type of job category are usually The average labour cost in the Madrid
negotiated and set out in collective Region during the second quarter of
bargaining agreements. 2008 was a19.33 per hour.
Salaries are paid on a monthly basis. At AVERAGE LABOUR COST IN THE MADRID
least two extra salary payments must be REGION (EURO PER HOUR)
paid each year, one at Christmas and the Labour Cost
other on the date stipulated by the relevant Industry 25.88
Services 19.06
collective bargaining agreement (generally
Construction 18.95
before the summer vacation period).
Total Average 21.76
Thus, an employee's gross annual salary is Source: National Institute of Statistics (third quarter
usually divided into 14 payments with 2008)
employees receiving a 'double' payment at
32
4.2 Utility Costs HALF-YEARLY ELECTRICITY PRICES FOR INDUSTRY IN SPAIN

One of the most important prerequisites (Euro per Kilowatt-hour, VAT excluded)
Consumption Price
for industrial activity is reliable access to
Less than 20 MWh 0.1372
utilities, at limited cost. Today, the Madrid
20 MWh - 500 MWh 0.1168
Region can offer utility services at 500 MWh - 2,000 MWh 0.0961
competitive rates as a result of a process 2,000 MWh - 20,000 MWh 0.0838
of deregulation and the arrival of new 20,000 MWh - 70,000 MWh 0.0713
technologies. 70,000 MWh - 150,000 MWh 0.0595
More than 150,000 MWh 0.0443
Source: Eurostat (first half 2008)
ELECTRICITY
The table to the right shows electricity
prices for industrial use in Spain.
GAS PRICES FOR INDUSTRIAL USE IN SPAIN

WATER (Euro per Gigajoule, VAT excluded)
The price of water for industrial and Consumption Price
commercial use in the region in 2008 Less than 1,000 GJ 9.1980
varies between a1.1777 and a2.5158 per 1,000 GJ - 10,000 GJ 8.0340
10,000 GJ - 100,000 GJ 7.6410
cubic metre depending on consumption,
100,000 GJ - 1,000,000 GJ 7.1370
the diameter of the water metre and the
1,000,000 GJ - 4,000,000 GJ 6.6030
season, plus a fixed rate for the service. More than 4,000,000 GJ 6.1980
Source: Eurostat (first half 2008)
NATURAL GAS
Strong price competitiveness for natural
gas supply compared with other fuels,
combined with the creation and the
expansion of storage sites, transport and
distribution, is driving demand for natural
gas in Spain. Deregulation of the market
was completed in 2003 and consumption
has steadily increased since then.
33
TELECOMMUNICATIONS AVERAGE PRICE OF TELEPHONE LANDLINES IN SPAIN

The number of telecommunications (Euro per 10 minute call. VAT excluded )
operators in Spain has increased over Type of call Price
Local 0.19
recent years, leading to more intense
National calls 0.85
competition.
International calls to USA 1.53
Source: Eurostat (latest available data, 2006)
The following prices of internet access
have been compiled from several ISPs. PRICE OF ADSL PACKAGES FOR BUSINESSES IN SPAIN
They refer mainly to ‘package’ offers (Euro per month)
Internet Servide Provider Download Speed (Mbps) Telephone Lines Price
including ADSL plus one or more
Ono 12 2 75
telephone landlines. Since commercial
Ono 12 8 180
“NASA” offers change frequently, the table is
Jazztel 20 2 50
National Aeronautics and intended to be merely indicative.
Space Administration (NASA) Jazztel 20 8 125
deep-space satellite tracking Orange 4 1 23
station at Robledo de Chavela
Orange 10 1 30
Ibercom 2 1 98
Ibercom 8 1 163
Telefónica 6 1 40
Telefónica 10 1 44
Source: PromoMadrid, complied from several ISPs (January 2009)
34
4.3 Real Estate OFFICE RENTAL PRICES IN THE MADRID REGION

(Euro per Square Metre per Month)
Average Rental Price Maximum Rental Price
OFFICE SPACE
Central business district 35.20 40.50
Madrid is the major business city in Spain.
Secondary central 16.50 30.00
According to data compiled by CB Richard
A-1 Motorway (North) 15.70 24.00
Ellis, the average total occupancy cost of
A-2 Motorway (North-east) 14,80 22.00
office space per year in Madrid is lower
A-6 Motorway (North-west) 15.90 17.50
than Paris, London, Moscow or Dublin.
Outskirts 11.90 14.00
Average 18.90 n/a.
Madrid is the sixth best city in Europe in
Source: Atisreal (third quarter 2008)
terms of availability of office space (and
Madrid from Cerro de los the best in Spain), behind only Berlin and
INDUSTRIAL BUILDING PRICES IN THE MADRID REGION
Ángeles, Getafe four UK cities, according to the 2008
(Euro per Square Metre)
Cushman & Wakefield European Cities 1 year rent Sale Land
Monitor survey (min-max) (min-max) (min-max)
Madrid City 78 - 126 1,400 - 2,300 800 - 1,250
INDUSTRIAL BUILDINGS Colmenar Viejo - Tres Cantos 54 - 78 950 - 1,600 400 - 800
Industrial areas in the Madrid Region are A-1 Motorway (North) 52.40 - 120 950 - 2,200 350 - 1,300
usually located near the radial motorways A-2 Motorway (North-east) 34.80 - 105 500 - 1,800 125 - 1,200
that begin in the city. A-3 Motorway (South-east) 51.60 - 108 900 - 2,000 340 - 1,200
A-4 Motorway (South) 54 - 99.50 600 - 1,800 200 - 950
A-5 Motorway (South-west) 72 - 144 1,200 - 2,700 500 - 1,300
A-6 Motorway (North-west) 72 - 240 1,650 - 3,000 n/a.
A-42 Motorway (South) 66 - 102 1,000 - 1,750 350 - 700
Source: Atisreal (fourth quarter 2008)
35
[ 5 ] Business Culture
5.1 Introduction Madrid enjoys an outdoor culture where negotiations, and are good way to
Knowing a little bit about Spanish people spend a lot of time outdoors, establish and enhance personal and
business culture will enable you to make playing sports and attending social events business relationships. The business
a smooth transition into Spanish life and outside their homes. The city is also well- discussion is usually left until the end of
make the most of your business and known for a lively nightlife. the meal. When paying the bill, a tip is not
investment plans. Here are some cultural always necessary, but an acceptable
guidelines to help you integrate into 5.3 Doing Business amount is around 5% in restaurants.
Spanish society and open the lines of In a business context, personal attributes
communication between you and your and character are often valued as much 5.4 Handy Tips
Spanish collaborators or business as technical ability, experience or • It is wise to have a double-sided
partners. professional competence. Having a wide business card (one side in Spanish and
and strong social network is important in the other in English).
5.2 Social and Business Interaction order to be successful in the Spanish • When presenting an idea, product, or
The Spanish culture is
The Spanish culture is very warm and business world. service, it is best to provide samples,
very warm and sociable. demonstrations, and information about
sociable. Spaniards are known for being
Spaniards are known for very friendly and welcoming. Businesses have centralised decision- your company as well as a written
being very friendly In conversation Spaniards communicate making systems where executives make summary of the presentation.
and welcoming using a lot of body language, gestures decisions that are best for the company • When invited to the home of a Spanish
and physical contact, such as a pat on as a whole. Hierarchies are important in person, it is advisable to bring the host
the arm. Spanish businesses; it is therefore a gift such as chocolates, wine, or
important to know the status and position flowers as a polite gesture. If you want
A friendly greeting between either two of the people with whom you are to give a gift to a business partner, it is
women or a woman and a man is to give negotiating. usually done after negotiations have
each other a kiss on each cheek (left been carried out. When given a gift, it is
cheek first). However, in more formal Spanish businesspeople generally stick to polite to open it in front of the giver.
situations, such as business interactions, safe and secure business decisions. Meals
a handshake is more commonly used. are often an important part of business
36
5.5 Business Working hours BUSINESS HOURS IN SPAIN

A table of the most common business and Monday - Friday Weekends
Offices 9 a.m. – 6 p.m. Do not open
shop opening hours in Spain is presented
(Summer: 8 a.m. – 3 p.m.)
to the right. The information is
Retail Stores 10 a.m. – 2 p.m. Sat: 10 a.m. – 6 p.m.
approximate. However, many offices have 4.30 p.m. – 8 p.m. Sun: some retailers can open
started adopting working hours similar to (Hours often vary during without restriction, such as
those in Northern Europe and shops often high tourist seasons. Retailers those selling cultural products,
extend their opening hours to include such as supermarkets and newspapers, bread, gas,
lunch time and later in the evening, others, often do not close at convenience stores and small
lunch time.) retailers. Others are restricted
especially in tourist areas and zones with
to a number of Sundays a year
very high commercial activity. The Madrid
determined by the regional
“IFEMA” Region has the most liberalised regulation government.
IFEMA is the number one Trade concerning retail opening hours of any Banks 9 a.m. – 2 p.m. Sat: 9 a.m. – 1 p.m.
Fair Center in Spain, and
region in Spain. Sun: Do not open
according to the latest reports
Government Offices 9 a.m. – 2 p.m. Do not open
published by the European
Source: ARHOE (2005)
Trade Fair Observatory 5.6 Public Holidays
(Universidad Bocconi), it is There are a maximum of fourteen public
ranked amongst the first five
holidays a year. The Central Government December 8 (Immaculate Conception);
locations in Europe for fair
organizers
sets those that are common to all of December 25 (Christmas Day).
Spain; while the rest are set by the • Madrid Regional holidays: January 6
regional governments because they are (Epiphany); Holy Thursday (different
typically related to regional and local date each year); May 2 (Madrid Region
history and customs. There are also two Day).
local public holidays in the city of Madrid. • Local holidays: Vary according to
• National holidays: January 1; Good Municipality. For the city of Madrid
Friday (different date each year, usually these dates are: May 15 (San Isidro) and
in April); May 1 (Labour Day); August 15 November 9 (Virgin Almudena).
(the Assumption); October 12 (National
Holiday); November 1 (All Saints Day);
December 6 (Constitution Day);
37
[3] LIVING IN
the Madrid Region

Legal Status for Foreigners
Personal Taxes
Living in Madrid
Education and Health
Transport and Services
DOING BUSINESS IN THE MADRID REGION > Living in the Madrid Region
[ 1 ] Legal Status of Foreigners
1.1 Visas document and require documents that

A visa may be necessary to enter Spain prove the reasons for the trip and
depending on country of origin and sufficient financial resources. Among
length of stay. There are several different the countries in this group we find the
types relating to the purpose and USA, Canada, Japan, South Korea, and
duration of the trip. Visas can be obtained most Central and South American
before the trip at Spanish consulates or countries.
embassies abroad. • Citizens from other countries need a
visa (plus the above documents).
A foreigner who has chosen a short-term
stay visa may visit Spain for a maximum A foreigner who wants a long-term stay
of ninety days within a six-month period. in Spain may also need a visa depending
After that, the foreigner may obtain an on the country of origin:
extension that lasts a further ninety days; • EU, Switzerland, Norway, Iceland and
this extension should be requested at a Liechtenstein citizens do not need a
police station (Comisaría de Policía) or an visa for long-term stay in Spain.
Office for Foreigners (Oficina de • Citizens of other countries need to
Extranjería). A visitor’s country of origin apply for a long-term visa.
will determine the need for a visa:
• EU citizens do not need a visa and can The types of long term visa are the
enter, leave and move within Spain following:
without restrictions. This also applies to • Residence visa: allows residence in
citizens of Switzerland, Norway, Iceland Spain without working, for a period
and Liechtenstein. longer than ninety days and shorter
• There are other countries whose than five years. Proof of financial means
6 a.m.: hot chocolate and churros at the Chocolatería San Ginés citizens are not required to have a visa. to live during the period of residence
However, they need a valid identification will be required.
40
• Work visa: allows residence and work in EMPLOYEE WORK PERMITS

Spain. The work visa includes the initial Permit type Scenario Duration
work permit (see below). Renewals of Initial permit First time permit restricted to a specific One year
work permits are obtained in Spain. geographical area or type of activity.
Renewal Renewal of initial permit. Unrestricted. Two years
• Student visa: allows a stay in Spain for
courses, education, research, etc. for
the duration of the studies.
1.2 Work Permits SELF-EMPLOYED WORK PERMITS

Permit type Scenario Duration
Nationals from EU countries and
Initial permit It may be restricted to a specific activity One year
Switzerland do not need a work permit,
and geographical area
either to be employed or self-employed.
Renewal Renewal of initial permit. Unrestricted Two years
Under Spanish labour legislation, non-EU
nationals intending to work in the Madrid
Region must obtain a special work visa
SPECIAL WORK PERMITS
and a work and residence permit. The
Permit type Scenario Duration
Spanish labour authorities grant different
Cross-border Workers residing in the border area of a Five years at most,
types of work permit depending on the workers State to which they return each day. renewable on expiry
type of work and its duration. Temporary Temporary relocation of a foreign Duration of the
relocation employee of an enterprise established in relocation, maximum
Work permits for foreigners are a non-EU or non-EEA country. one year
considered only after taking into account Traineeship and Workers with an internship or Duration of the
the employment of Spaniards for the internship traineeship. contract, maximum
one year
same employment. However, there are
Work and Seasonal activities related to electricity, Duration of the
certain preferred categories of foreign
service gas, railway, telephone or other contract, maximum
workers including workers with family
infrastructures. one year
ties in Spain, executives in companies Seasonal Seasonal activities or services. Duration of the
investing or creating jobs in Spain, contract, nine
researchers and scientists as well as months maximum
prestigious artists. Source: Ministry for Labour and Immigration (2009)
41
There are two advantages for these within a month. Work visas can be When a foreigner with a work visa enters
categories of workers: (1) a shorter obtained from Spanish Consulates Spain, he or she must ask for a Foreigner
procedure to obtain the work permit, abroad. Identification documents, police Identification Card within one month.
and (2) the employment of Spaniards not and medical records, and photographs will
being considered before granting a work be required. Once the visa has been The card includes the Foreigner
permit. This incentive is given to promote granted, the foreigner must come to Identification Number (Número de
research and investment in Spain. Spain within three months Identificación de Extranjero, NIE). A
foreigner will need this number for
Initial work permits must be requested 1.3 Permanent Residence Permit activities such as purchasing property,
before the work visa. There are two A foreigner who has lived legally in Spain dealing with tax authorities, opening a
options: for five years and has correctly renewed bank account, getting insurance and
• If the foreigner is going to be an all required permits, can apply for starting a business.
The golf course in the
Casa de Campo’s Park, employee, the application must be permanent residence. This allows the
overlooking Madrid made by the Spanish company to the foreigner to live and work in Spain
Office for Foreigners (Oficina de indefinitely and without restrictions. The
Extranjería) in Spain. Justification for permit needs to be renewed every five
the need for a foreign worker must be years, sixty days prior to the expiry date.
provided.
• If the foreigner is going to be self- 1.4 Foreigner Identification Card
employed, he or she must apply at a Spanish people have an official identity
Spanish Consulate abroad. The required card (DNI), legal proof of identity in Spain,
documents include proof of professional which is used for many transactions.
qualifications, proof of necessary The Foreigner Identification Card (Tarjeta
investment capital, details of intended de Extranjero) is the equivalent for non-
economic project as well as a list of the EU citizens who live legally in Spain for
necessary licences and authorisations more than ninety days, in any of the
to work. previously explained scenarios (long-term
stay and residence). The card is valid for a
Once the initial work permit has been term equal to the duration of the related
granted, the work visa must be requested residence permit.
42
[ 2 ] Personal Taxes
The total personal tax burden varies Personal Income tax is the most Region varies between 23.6% for annual
between different Spanish regions important of these taxes. income below a17,707.20, and 42.9% for
because taxes are levied by both the income over a53,407.20.
central and regional governments. Personal Income tax affects all income
Several taxes are levied and collected by earned by an individual in a year, Impatriates of multinational groups
the latter. The Madrid Region has a including employment income, capital assigned to Spain can benefit from more
competitive and favourable tax revenues and certain financial activities advantageous tax treatment. This special
regulation, having significantly reduced and investments. Tax rates are tax regime is applied to income earned in
several taxes and with plans for future progressive, except for dividends, Spain, with a general rate of 24%, for six
cuts. interests and some other capital gains years, beginning in the fiscal year in
that are subject to a flat rate of 18%. which the impatriate acquires tax
Personal income tax Individuals are subject to the following According to the OECD, tax on personal residence in Spain.
taxes. income is lower in Spain than in other
for expatriates assigned
• Personal Income tax (Impuesto sobre la European countries such as France, Income tax is declared yearly around the
to Spain is very Renta de las Personas Físicas), for Germany, Netherlands, Italy, Czech month of May. Tax returns can be easily
attractive with a residents Republic and Poland, among others. completed online with the help of
flat rate of 24% • Non-resident personal income tax software released each year by the Tax
(Impuesto sobre la Renta de No Income tax is divided into a regional scale Authority (Agencia Tributaria).
Residentes), for non residents. and a national scale. Some decision-
• Wealth tax (Impuesto sobre el making power over taxes has been
Patrimonio) for both residents and non- transferred to the regions which can
residents. change regional rates. This has allowed
• Inheritance and Gift tax (Impuesto the Madrid Region to implement a total
sobre Sucesiones y Donaciones), for tax cut of 1% which began in the 2009
both. In practice rate reductions in fiscal year, making it the first Spanish
2008 have eliminated this tax in the region to reduce the tax. For the fiscal
Madrid Region in certain cases. year 2008, the tax rate in the Madrid
43
[ 3 ] Living in Madrid
3.1 General Information centre of the region, and together with motorways serve the city: the M-30 goes
The Madrid Region has a wide range of the immediately surrounding towns it through the city itself, roughly surrounding
residential accommodation, suitable for forms the metropolitan area. According to the centre, while the M-40 is further out
different needs and financial means. official population data from January and surrounds most of the outskirts. In the
2008, the population distribution was: 3.2 historical centre, homes are smaller and
Extensive transport options shorten million people within city limits, 2.5 prices are higher. In surrounding districts
travel time in the region. High-capacity million in other towns in the metropolitan like Salamanca or Chamartín, you can find
motorways and commuter trains connect area and 0.5 million in other parts of the more spacious luxury homes. These central
Madrid with surrounding towns. Within region. areas, within the M-30, have the more
The Valdesquí ski resort in the
Sierra de Guadarrama, just 40 the capital, the underground, bus system, intense commercial activity and street life
minutes from the city centre local trains and taxis enable quick and This concentration of the population in the and also have excellent transport options.
efficient transportation between most metropolitan area is related to the In the area outside the M-30, homes are
parts of the city. Such easy transportation geographical features of the region. even bigger, at cheaper prices, and there is
has driven the development of many The Madrid Region is separated from that some single-family housing in districts
luxury housing developments away from of Castille and León by a mountain range such as Fuencarral and Ciudad Lineal.
the city centre, which cater for the needs to the north and west; while to the south These are quieter areas, further from the
of executives and businesspeople. As the and the east the terrain is flat and there is business centres.
population grows and infrastructures no clear physical separation between
continue to improve, these housing Madrid and the Castilla-La Mancha region. The metropolitan area of Madrid is made
developments are becoming more Because of this, the biggest urban and up of the city of Madrid plus 40
popular and are appearing in more industrial development is located in the surrounding municipalities. During recent
outlying parts of the region. southern and eastern part of the region, decades, the towns in the metropolitan
while the northern and western towns are area have experienced a huge population
3.2 Residential Areas much smaller economic contributors. growth. In an effort to make travel more
The Madrid Region can be separated into The city of Madrid is made up of a large efficient for those living just outside the
two parts: the metropolitan area and the historical centre and urban extensions of city of Madrid, the transportation system
outer area. The city of Madrid lies at the the last two centuries. Two concentric has been extended.
44
Map of Residential Areas in METROPOLITAN AREA OF MADRID

Metropolitan Madrid
to Metropolitan South: after the city of Madrid, Alcorcón, Leganés,
Tres Cantos Getafe, Fuenlabrada and Móstoles are five of the six most populated
municipalities in the region (the other one being Alcalá de Henares
Alcobendas located in Metropolitan East), with each smaller city having a
population of between 150,000 and 200,000. They are located just
south of the city, within reach of the M-40, M-45 and M-50 motorways
Las Rozas
Barajas Airport as well as the underground. They are the main industrial hubs in the
Fuencarral
region. A large number of industrial parks are located in these
Majadahonda
municipalities together with some logistics and technological parks.
Tetuán Hortaleza
Barajas to
Chamartín
Metropolitan East: the other major industrial hub of the region is the
Pozuelo de Moncloa
Alcalá de Henares corridor that includes towns such as Coslada, San Fernando
Alarcón Henares
Chamberí Ciudad
Boadilla Salamanca Lineal de Henares, Torrejón de Ardoz and Alcalá de Henares. Logistics
de Monte Historical activities are especially significant here, due to the proximity of
Centre San Blas Coslada
Retiro San F
San Fernando
ernando
Arganzuela de Henar
Henares
Henare
es Barajas Airport.
Moratalaz
Latina Metropolitan North: this is an area where industrial activity is more
M-30
Vicálvaro
Puente de focused on technological companies, multinational headquarters and
Carabanchel Vallecas
Villa de
Usera Vallecas financial activities. The towns of Tres Cantos and Alcobendas are the
M-40
focus for those activities. Tres Cantos is a new town that was built in
Alcorcón Villaverde
Móstoles M-45 the last few decades and has good service provision. Between
M-50 Alcobendas and the city of Madrid lies La Moraleja, one of the most
Leganés
popular luxury detached housing developments, with a large number
Getafe
Urban Area of international schools and many multinational companies.
Fuenlabrada
Metropolitan West: companies from diverse sectors (technology,
Detached Housing Area
manufacturing, services, and finance) are located here. This is where
Major Roads you will find the biggest concentration of housing developments,
mostly around the towns of Boadilla del Monte and Pozuelo de
Paseo de la Castellana
Alarcón.
45
Many industries, service companies and Iberian mountain range, there are a large more sophisticated, thereby benefiting older buildings, and this is expected to
universities are located in these nearby number of villages and detached housing buyers. This has made it easier for be a medium-term trend. Thanks to the
towns. Housing in the metropolitan area developments, where many people from buyers to find a home with the help of intense construction activity over recent
is diverse. It is the main location in the the city spend their weekends and keep estate agencies which assist with finding years, there is a large and diverse range
region for detached housing a second home. The A-6 motorway is the a house, brokering a deal as well as of homes available for sale.
developments. main road serving this area. selecting a mortgage.
The following table contains a sample of
The outer part of the region is a lot less 3.3 Buying Property Despite the rise of house prices in the homes offered in some specific areas,
densely populated. In the northern and Since 2000, Spanish real estate services city of Madrid, they are still lower than in compiled with the assistance of several
western areas, near the slopes of the have expanded their activities and grown other European capitals. After several real estate agencies. It is intended
years of significant rises, at the merely as a reference.
Housing Market in the Madrid Region beginning of 2007 the rate of growth
began to slow down, both in new and
Alcobendas
Fuencarral Barajas Airport HOUSING MARKET IN THE MADRID REGION (EURO)

Price per Apartment 2 or more Detached house
Hortaleza square metre bedrooms (min-max) 3 or more bedrooms
to
Pozuelo de Chamartín Alcalá de (min-max) (min-max)
Alarcón Henares
CITY CENTRE (INNER M-30 AREA)
15 Km
Historical Historic Centre 1,714 - 11,765 90,000 - 4,450,000 -
Centre
Chamartín 1,933 - 16,000 165,000 - 6,000,000 553,000 - 8,288,483
OUTER CITY (BETWEEN M-30 AND M-40)
Vicálvaro
Hortaleza 1,500 - 12,500 144,000 - 2,575,000 299,950 - 7,000,000
Fuencarral 1,614 - 8,056 150,000 - 1,800,000 250,000 - 5,300,000
Vicálvaro 1,016 - 4,792 91,484 - 457,000 350,000 - 698,000
METROPOLITAN AREA (OTHER MUNICIPALITIES OUTSIDE M-40)
Alcalá de Henares 1,281 - 5,363 120,000 - 660,000 290,000 - 850,000
Getafe
Getafe 1,362 - 5,259 110,000 - 626,000 252,000 - 920,822
Urban Area
Pozuelo de Alarcón 1,475 - 11,765 130,000 - 2,100,000 360,000 - 5,800,000
Major Roads
Alcobendas 1,553 - 5,609 139,000 - 790,000 368,000 - 2,200,000
Paseo de la Castellana Source: PromoMadrid, compiled with assistance of real estate agencies (January 2009)
46
The main steps involved in the purchasing process are as follows:
STEPS IN THE PURCHASING PROCESS
1st) Land Registry Extract (nota simple informativa): with this document from the Property Registry (Registro de la Propiedad), it
is possible to find out if the property is free of charges, if it really belongs to the seller and if the description of the property is
consistent with the information received by the buyer.
2nd) Contracts: the pre-contract (precontrato or preacuerdo) is usually signed before the public deed of purchase is ready. It is a
simple document in which the seller expresses his intent to transfer the property to the buyer, and the buyer expresses his intent to
buy at the negotiated price with conditions agreed upon. At this time, the buyer usually pays a percentage of the negotiated price to
the seller. The pre-contract allows the buyer to obtain a mortgage from a financial institution. After the pre-contract has been signed
and the mortgage obtained, the purchase contract can be signed. It contains more detailed information similar to that in the pre-
contract.
“Mirador Building”
The Mirador Building, 3rd) Completion: the property transfer must be certified by a notary. The purchase deed (Escritura) will be signed by the buyer and
a modern building located in seller after the notary has read and checked it to ensure it reflects the agreement reached between the two parties. It is the most
the new area of Sanchinarro,
formal document in the process and it is the proof of ownership transfer. The new owner’s interest is registered with the Property
north of Madrid. Designed by
Registry. For a non-resident, if the purchase price exceeds a3,005,060, the purchase must be reported to the Trade and Investment
the Dutch architecture firm
MVRD in collaboration with
Authority (Dirección General de Comercio e Inversiones).
Spanish architect Blanca Lleó.
The final costs for the buyer include the yearly, based on the registered value of VAT. The rate is 7% if it is residential
following: the property. property and 16% otherwise.
• Notary fee. Stamp duty must be added (which in
• Transfer tax (Impuesto de TAXES Madrid varies between 0.2% and 1%).
Transmisiones Patrimoniales) or VAT The buyer may be obliged to pay transfer
• If either (1) the seller is a real estate
(IVA) and stamp duty (Impuesto de tax, VAT and stamp duty.
developer and it is not the first transfer,
Actos Jurídicos Documentados). • If the seller is an individual, the buyer
or (2) the land cannot be developed, the
• Property Registry fee: the rates vary pays transfer tax of 7% on the purchase
buyer has to pay either VAT (if the
from 0.4% for the first a6,010 to price specified in the deed.
buyer is either a professional or a
0.02% for amounts exceeding a601,012. • If the seller is a real estate developer company and fulfils other conditions) or
• Property tax (Impuesto sobre Bienes and the building or land represents a a transfer tax.
Inmuebles): it is a local tax that is paid first-time transfer, then the buyer pays
47
Rental Market in the Madrid Region RENTAL MARKET IN THE MADRID REGION (EURO)
Price per Apartment 2 or Detached house 3 or
square metre per more bedrooms per more bedrooms per
month (min-max) month (min-max) month (min-max)
Alcobendas
CITY CENTRE (INNER M-30 AREA)
Historic Centre 8.80 - 36.00 650 - 6,000 -
Chamartín 8.00 - 36.00 700 - 7,000 2500 - 12,000
Fuencarral Barajas Airport
OUTER CITY (BETWEEN M-30 AND M-40)
Hortaleza 6.2 - 27.00 635 - 5,500 1,000 - 15,000
Hortaleza
to Fuencarral 5.30 - 27.80 600 - 4,200 1,700 - 7,000
Pozuelo de Chamartín Alcalá de
Alarcón Henares Vicálvaro 7.40 - 16.00 600 - 1,200 -
15 Km METROPOLITAN AREA (OTHER MUNICIPALITIES OUTSIDE M-40)
Historical
Centre Alcalá de Henares 4.10 - 19.00 600 - 1,300 900 - 2,000
Getafe 3.90 - 15.60 600 - 1,200 930 - 1,700
Vicálvaro Pozuelo de Alarcón 2.80 - 24.90 630 - 5,250 1,100 - 18,000
Alcobendas 6.0 - 18.80 700 - 2,100 1,100 - 12,000
Source: PromoMadrid, compiled with assistance of real estate agencies (January 2009)
Getafe The seller may be liable to pay capital When renting, bear in mind the following:
Urban Area
gains tax (Impuesto sobre el Incremento • Rental contracts usually last a minimum
Major Roads
de Valor de los Terrenos de Naturaleza of one year.
Paseo de la Castellana Urbana, also known as plusvalía). • The owner must renew the contract for
at least four further years.
3.4 Renting Property • The property must only be used as a
As in the previous section, the above data residence.
about property rental prices has been • Prices increase yearly in accordance
collected from a variety of real estate with inflation.
agencies, to provide a better • A two-month notice period is necessary
understanding of the market in the to terminate a contract.
Madrid Region.
48
[ 4 ] Education and Health
4.1 Education To attend university, one must complete secondary education in state schools is
Schooling in Spain is compulsory from six the bachillerato and take an entrance free. The school term lasts from
to sixteen years of age, although many exam. However, there are some September to June, with holidays at
children are enrolled in pre-schools at the exceptions that can allow a student Christmas and Easter.
age of three. Compulsory education without bachillerato to get into university
consists of two phases: primary such as very good results in a student’s The Madrid Region has a wide-ranging
education from six to 12 years of age, and superior vocational training. educational system from primary to post-
secondary education (ESO) from 12 to 16 graduate level. The vast network of
years. University education is currently schools includes more than 1,200 primary
A class in International Law
for seniors at the adapting to the European standards set schools and more than 800 secondary
Madrid’s Complutense When students reach the age of 16, they by the Bologna accords. The aim is to schools. There are 16 universities in the
University Law School often choose to attend a technical school create a harmonised European higher region (9 of which are private and 7
or to continue in secondary school. The education system by making degrees public). This figure includes 2 distance-
first option provides vocational training more compatible across European learning universities that have their
and allows the student to enter the countries. headquarters in Madrid.
labour market with a technical
qualification after completion of a 2 year There are currently three levels of BILINGUAL EDUCATION AND
course, or complete his training with a degrees officially recognized in Spain: INTERNATIONAL SCHOOLS
second 2 year course that will entitle him first cycle degrees (diplomado or The Regional Government of Madrid
to a superior technical qualification. ingeniero técnico), generally lasting 3 began a programme for bilingual Spanish-
There are also technical qualifications in years; second cycle degrees (licenciado or English education in state primary
sports and arts that follow the same ingeniero superior) generally lasting schools in 2004. Under this programme,
system. between 4 and 6 years; and third cycle 180 state schools began providing
degrees (doctor). bilingual education in the academic year
The other possibility after 16 is to study 2008-2009. Most of the schools are
at secondary school for two more years Educational institutions in Spain can be located in the city of Madrid, but there
to earn a diploma called bachillerato. state, subsidised or private. Primary and are also 40 other municipalities in the
49
region that will have one or more 4.2 Health Beyond the public health system, Madrid
bilingual schools. It is expected that The public health system in Spain is has a diverse private health sector.
36,600 state school children will attend decentralized. The Spanish government Several foreign-based hospitals have
bilingual schools in the 2011-2012 school provides the basic legislation and branches in Madrid, such as MD Anderson
year. coordination, and regulates Houston (one of the most prestigious
pharmaceutical products. The regions centres in the world for cancer
Furthermore, there are 30 international plan and manage health care. treatment).
schools in the Madrid Region. Half are Spanish law grants entitlement to health
located within the city of Madrid (most of care to all Spanish and foreign residents Medication is purchased in pharmacies
them in the districts of Chamartín and registered on the population census (farmacias), which are easily recognisable
Hortaleza), and the other half in (registers kept in each municipality). thanks to a green cross sign displayed
surrounding areas of the city, with a Census registration is not required in the outside. They usually follow conventional
concentration in Pozuelo de Alarcón and case of emergency services. Medical shopping hours, but every city and town
Alcobendas. Most international schools attention in the public system is free of has a number of pharmacies open 24
offer English as their first language with charge. hours (farmacias de guardia). These all-
some of them allowing students to also night pharmacies operate on a rotation
In the Madrid Region learn French or German, the two other According to 2008 data, in the Madrid basis so that each day a different set of
there are 79 hospitals, most popular foreign languages. Region there are 79 hospitals, 57 of them pharmacies is open. Prescriptions from
Furthermore, some international schools in the capital. The public health system the public health system are subsidized,
57 of them in the capital.
offer French, German, Dutch, Italian, runs 31 hospitals; the regional but the full amount must be paid if it is
The public health system Swedish and Portuguese as their first medication prescribed by a private
government having recently enlarged the
runs 31 hospitals language. system with seven new hospitals. hospital.
50
[ 5 ] Transport Services
5.1 Airports terminals, including dining, shopping, The local train network comprises ten
Madrid Barajas International Airport is banking, as well as business and lines that stretch throughout the Madrid
located 13 kilometres north-east of the healthcare facilities. Region and extend to reach towns in the
city centre. Road access to and from all adjoining provinces of Guadalajara and
terminals has recently been improved, In addition, Madrid-Torrejón Airport, 22 Toledo. It allows commuters and local
allowing buses and taxis to get to the city kilometres away from the city centre, is travellers to move between the city of
centre quickly (less than 30 minutes, used by private and executive aviation Madrid and nearby towns such as
depending on traffic). There is also an and is the most important airfield for air Alcobendas, Tres Cantos, Alcalá de
“RENFE” underground line that allows users to taxi activity in Spain. Henares, Getafe, and Pozuelo de Alarcón.
The development of a high- reach any terminal of the airport in 25 In 2009, the price for a one-way trip
speed railway network is 5.2 Trains ranges between a1.20 and a5, depending
minutes from the city centre. These
centralized in Madrid.
alternatives make Barajas an airport with There are two main train stations in the on distance.
As of early 2008,
there are approximately 1,500 exceptional transport connections. city of Madrid: Atocha and Chamartín.
kilometres of high-speed Both provide services for intercity and In addition, the city of Madrid is the hub
lines in Spain. local (cercanías) trains. Atocha serves as for the entire train transportation system
Barajas airport was renovated and
By the year 2009, Madrid will
expanded with the addition of terminal the hub for the local train network as well in Spain. The railway network is arranged
be connected by high-speed
train to the French border and T-4 and two extra runways in early 2006 as for the high-speed (AVE) intercity radially, with the city of Madrid as the
by 2010 it will be connected to to double its capacity to 70 million network: High-speed trains to the east starting point, at the geographical centre
the Mediterranean coast. and south of Spain depart from here. of the country. Most of the high-speed
passengers a year. The airport handles
the majority of Spain's transatlantic Chamartín is the hub for a number of lines that already exist or are planned
flights and is the main European airport local and intercity trains, including high depart from Madrid.
for flights to Central and South America speed trains travelling out of the city
(30% of passengers and 40% of goods north and west. Tickets and timetables 5.3 Underground
that fly between Latin America and can be obtained at the train stations as Madrid’s underground system is
Europe go through Barajas) as well as a well as from RENFE (the Spanish national inexpensive, efficient and one of the
major hub for worldwide connections. It railway operating company). most extensive in the world. Twelve
provides all the usual services in its metro lines reach all parts of the city.
51
In addition to the city of Madrid, the most 5.4 Taxis

important towns in the metropolitan area In nearly all neighbourhoods reasonably
are also accessible by metro. A big priced taxis can be flagged down on the
expansion project, finished in the first street. They are not shared with
half of 2007, expanded the metro to the strangers. All taxis provide an official
northern, eastern and western receipt with information about the trip.
metropolitan areas (the underground in
the southern area was already As from 2009, the minimum fare
established). As a result, the underground for a taxi is a2.05 plus a price per
network serves the city of Madrid and 12 kilometre ranging from a0.98 to a1.17
municipalities around it, providing for a depending on the time, the area, and the
total population of almost four and a half day of the week. If traffic circulation is
million people. very slow, an hourly price of a18.10 may
be applied instead. There are other
A big expansion project, As from 2009, the price for a single trip surcharges for special situations, such as
finished in the first half of is one euro, while a ten trip ticket that trips to or from the airport, train station,
can also be used on buses costs a7.40. bus station or the Madrid Trade Fair site
2007, expanded the metro
Prices are higher if the underground as well as for night trips on Christmas Eve
to the northern, eastern passes the boundaries of the city of and New Year’s Eve. There is no
and western Madrid. The metro runs from 6 am to surcharge for a guide dog or for luggage
metropolitan areas 1:30 am. The entrance to a station is that does not exceed the capacity of the
recognisable by a red and blue rhombus- trunk and roof rack.
shaped sign and the word “Metro”.
52
Websites
PromoMadrid www.promomadrid.com
The Madrid Regional Government www.madrid.org
The City Council of Madrid www.munimadrid.es
Madrid Chamber of Commerce www.camaramadrid.es

Cámara de Madrid
Madrid Institute for Development www.imade.es

IMADE
Invest in Spain www.investinspain.org
National Statistics Institute www.ine.es

INE
Ministry for Industry, Tourism and Trade www.mityc.es

Ministerio de Industria, Turismo y Comercio
Mercantile Registry www.rmc.es

Registro Mercantil
Spanish Federation of Innovation and www.fedit.es

Technology Institutions
FEDIT
Ministry for Economy and Finance www.meh.es

Ministerio de Economía y Hacienda Social
Social Security Authority www.seg-social.es

Tesorería General de la Seguridad Social
54
Websites
Tax Authority www.agenciatributaria.es
Agencia Tributaria
Ministry for Labour and Immigration www.mtas.es

Ministerio de Trabajo e Inmigración
Secretary of State for Immigration extranjeros.mtas.es

and Emigration
Secretaría de Estado de Inmigración y Emigración
Ministry for Science and Innovation www.micinn.es

Ministerio de Ciencia e Innovación
Central Bank of Spain www.bde.es

Banco de España
National railway operator www.renfe.es

RENFE
National airport operator www.aena.es

AENA
Madrid Underground www.metromadrid.es

Metro de Madrid
Madrid Tourist Board www.turismomadrid.es

Turismo Madrid
55
About PromoMadrid
PromoMadrid, Desarrollo Internacional The main purpose of PromoMadrid is the For further information:
de Madrid, S.A., is a publicly-funded promotion and international development PromoMadrid,
company that is dependent on the Madrid of the Madrid Region. To achieve this Desarrollo Internacional de Madrid, S.A.
Regional Ministry for Economy and goal, it develops activities that encourage Suero de Quiñones, 34
Finance (Consejería de Economía y trade and outward investment of local 28002 Madrid (Spain)
Hacienda de la Comunidad de Madrid). companies in markets abroad as well as Tel: +34 91 745 01 27
It was created in 2004 and its main activities that attract and consolidate Fax: +34 91 411 09 13
shareholders are the Madrid Institute of foreign direct investment in the region. E-mail: info@promomadrid.com
Development (IMADE), Madrid Chamber To support its mission, PromoMadrid also
of Commerce and Industry (Cámara de develops activities that enhance the
Comercio e Industria de Madrid), the image of the Madrid Region
Madrid Business Federation (CEIM) and internationally.
the Madrid Savings Bank (Caja Madrid).
© PromoMadrid. February 2009
56
about business
PromoMadrid,
Desarrollo Internacional de Madrid, S.A.
Suero de Quiñones, 34
28002 Madrid (Spain)
Tel: +34 91 745 01 27
Fax: +34 91 411 0 9 13
E-mail: info@promomadrid.com

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about business

3. Economy 8 1.2. Work Permits 41

2. BUSINESS IN THE MADRID REGION 11 1.4. Foreigner Identification Card 42

3.2. Industrial and Technological Base 29 5.1. Airports 51

3.3. Business Parks and Business Centres 30 5.2. Trains 51

3.4. Telecommunications 31 5.3. Underground 51

2. Madrid Region in Brief 7

3. Composition of GDP in the Madrid Region 8

4. Differences between S.A. and S.L. 13

5. Differences between ‘Autonomous Entrepreneur’ and Single Shareholder Company 13

6. Differences between a Branch and a Subsidiary 14

7. Social Security Contribution Bases (Euro) 19

10. Main Motorway map of the Madrid Region 27

11. Main Railway Map of Spain 28

12. Map of Main Logistics Centres in the Madrid Region 29

13. Map of Science and Technology Parks in the Madrid Region 31

21. Business hours in Spain 37

22. Employee Work Permits 41

23. Self-Employed Work Permits 41

24. Special Work Permits 41

25. Map of Residential Areas in Metropolitan Madrid 45

26. Housing Market in the Madrid Region (Euro) 46

27. Rental Market in the Madrid Region (Euro) 48

[1] GENERAL PROFILE OF

the Madrid Region

[ 1 ] Geography and Population

million inhabitants towns and cities, make up the Tres Cantos

Five of the main smaller cities of the

the region. These are Móstoles, Getafe,

Madrid is recognized worldwide for its MADRID REGION IN BRIEF

Moreover, mountains are easily accessible

In addition, Madrid is one of the best

the Madrid Region

1.1. Types of Business Organization MOST COMMON TYPES OF BUSINESS ENTITIES

shop owners and some independent

Single shareholder companies have to DIFFERENCES BETWEEN A BRANCH AND A SUBSIDIARY

1.2 Procedure for Setting Up a An easy way to go through the process is

for businesses for radio, gambling, raw materials,

The procedural formalities necessary to

>> see chart on next page

STEPS FOR SETTING-UP A COMPANY IN THE MADRID REGION

The procedure to start working as an hours of time actually worked, calculated

• Stamp duty: 1% of capital. rate cannot be less than the normal

The social security contribution is SOCIAL SECURITY CONTRIBUTION RATES (PERCENTAGE)

• Assets below a2.85m. exceeds the average amount invested in

Corporate Income Tax (Impuesto de innovation in industrial design and

Sociedades) recently, and new legislation process engineering: 8%.

came into effect on 1 January 2007.

incentives and deductions, streamlining subsidies received to encourage such

the calculation of the tax. activities.

A new law was approved in July 2007

R&D: granting the patent rights.

Operations and FLOWS OF CAPITAL

SEGOVIA competitiveness, environmental and

of national air passenger traffic. platforms have been coordinated and

Map of Main Logistics Centres 3.2 Industrial and Technological

Science and Technology Park telephone lines and internet access,

All the principal global operators in

The minimum wages for

4.2 Utility Costs HALF-YEARLY ELECTRICITY PRICES FOR INDUSTRY IN SPAIN

GAS PRICES FOR INDUSTRIAL USE IN SPAIN

TELECOMMUNICATIONS AVERAGE PRICE OF TELEPHONE LANDLINES IN SPAIN

4.3 Real Estate OFFICE RENTAL PRICES IN THE MADRID REGION

5.5 Business Working hours BUSINESS HOURS IN SPAIN