Invest in Madrid

Madrid, the capital city of Spain is also the largest city in the country. With more than 3.3 million inhabitants residing in the metropolis (as per 2009 census), it is one of the most populated cities in the European Union, the majority of the population lives in the urban and sub-urban areas. The Monocle Magazine, a popular magazine in it 2010 index rated Madrid as the 10th most livable city in the world.

Facts:

Madrid, the Spanish capital is one of the fastest growing economies not only European Union but also in the world. The city is one of the key driving forces of the Spanish economy.

The economy of Madrid is spearheaded by the service sector which is strongly supported by the vast industrial base of the city. One of the key factors that contribute to make Madrid one of the leading economies in the European Union is the city’s unique adaptability trait and its ability to respond aptly to the necessities of foreign investors and cater to them.

Additionally, the people living in this capital city enjoy a high standard of living as compared to other cities in the European Union. The local inhabitants enjoy myriad opportunities and facilities for leisure and sports that the city offers. The city is not just the financial and administrative capital; it is also regarded as the cultural capital of Spain. There are several cultural activities taking place in the city round the year, which reflects the vibrancy of the Spanish cultural heritage. The city boasts of top class restaurants and bars that make it a perfect destination for foreigners to live in and invest in business.

Trends:

Madrid is the Business center of Spain and also the headquarters of the country’s Public administration. Several MNC’s have selected Madrid as the Spain’s Headquarters for operations. A division of the Regional Ministry of Employment and Economy, PromoMadrid, Madrid is one of the most important regions in Spain for setting-up business. Over the fast few decades the FDI scores recorded in Madrid consistently exceeds 60% of the total Spanish FDI inflow.

The Madrid Chamber of Commerce has set forth several investment friendly plans to attract foreign companies in the city. The MCC has set-up free I.T consultancy which helps small and medium sized companies to establish their firm in the city and provide them the essential I.T infrastructure. With such amazing initiatives in place, the foreign investment in Madrid has a bright prospect.

Market Size:

According to the official reports (released by the Government of Spain body) in the year 2008, Madrid alone accounted for pulling 82% of the foreign investment in the country. The strategic geographic location of Madrid in the center of Europe has greatly attracted the eyes of the foreign investors. The city allows the foreign investors investing in the country to operate at a global level. The city is an easy gateway for foreign companies to have access and cater to the lucrative markets in Africa, South America and rest of the countries in European Continent.

Other important factor that attracts a large volume of foreign investment in Madrid is the existence of world class transport infrastructure facilities (air, road and rail), it connects every nook and corner of the city and also it is connected well to other important cities of Spain. This helps the foreign companies to easily transport raw materials and finished products from the manufacturing unit to the market.
Key Investment Area:

Aeronautics and Aerospace:

Spain has a huge Aeronautics and Aerospace industry, the industry has an annual turnover of about 5.6 billion Euros and it provides employment opportunities to a large number of people  in the country. The Spanish Aerospace industry is the fifth largest in the Europe and bulk of this is concentrated in Madrid. Madrid alone contributes to 63% of the sector turnover. According to government reports, in the year 2008, the Aerospace industry in Madrid showcased a growth rate of about 20%, which is a way above the growth rate of the same sector in other Cities in Europe.
 

In the current economic situation where the world economies have survived the market downfall, foreign investors better chances of success in their investment in the sector. The business-friendly policies of the government and the availability of the top class working personnel makes Madrid one of the most competitive destinations in Europe to invest in the aerospace sector.

Life Science:

Madrid is the center of the largest number of Spanish companies in the life science sector including medical technology, biotech and pharmaceuticals. The city is also one of the most important biomedical research centers in the country. Over the past 10 years the Life Science sector in Madrid has been growing steadily at a considerable rate. This has attracted a lot of foreign investment in the sector. Spain constitutes the 5th largest market volume in terms of volume of sales and creation of employment in the pharmacy industry. The Madrid city is home to more than 600 business entities having business establishments in the health care sector.

Foreign companies investing in the sector can avail the following benefits:

•    Foreign companies have plenty of scope for research and development and develop new medicines for treatment of life threatening diseases like Cancer, Alzheimer and several others diseases like Parkinson’s disease and allergies.
•    Foreign investors investing in the sector can avail the services of the top quality work personnel to help them in their business endeavors. There are more than 5000 researchers working at various public universities and research centers doing research in related sectors of life science. Besides, more than 600 new PhD graduates pass out every year from diverse fields related to life science.

Besides these industries, foreign investors can also consider investing in the following sectors that has the potential to provide valuable returns on their investment.
•    Real Estate
•    Tourism
•    Service Industry

FDI / Investment Policy:

It is no doubt that Madrid is a magnet for foreign investors. One of the main reasons for foreign companies investing in the city is its attractive FDI policies set in place by the Spanish government.
The government provides several financial grants to the foreign investors. The grants are in terms of tax exemptions on their capital gains. The government of Spain does not discriminate between local and foreign investors in terms of tax reduction and loan and reduced rates of interest.
Madrid is truly an amazing city that has all the elements to make it a financial hub and attract foreign investment in the city.

Resources:

PromoMadrid is agency that is specifically setup for assisting investors that are keen in investing in   Madrid or expanding their activity in Madrid. The agency also acts as mediators between public institutions and firms. It also plays a role in change in policies especially in autonomous region in order to attract new foreign investments.

  

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