Spain is home to about 47 million people, around one million of which are British nationals, making it on of the biggest consumer markets in the EU, and a great opportunity for any British businesses looking to widen their net.
The country also has a growing economy, with householders experiencing an increased household disposable income after recent tax reform and record employment growth. This healthy outlook has led to the return of foreign investment – if you want to be part of it, here’s everything you need to know about exporting to Spain.
Where is Spain?
Bordered by France and Andorra to the north east, and separated from western Europe by the Pyrenees and from Africa by the Strait of Gibraltar, Spain makes up the Iberian Peninsula along with Portugal, which borders it to the west.
Madrid is the capital city, and is just over 1,000 miles from London, with regular flights available from all over the UK.
The national language is Spanish, the currency is the euro, the dialling code is +34, and the top level domain for websites is .es
The pros and cons of exporting to Spain
Around £13.5 billion worth of goods and services are exported from the UK to Spain each year, with the main exports including:
- automotive and auto parts
- aircraft and associated equipment
- medical and pharmaceutical products
- inorganic chemicals
- alcoholic beverages
- vegetables and fruit
If you’re exporting to Spain, it’s worth knowing the strengths of the Spanish market include…
- competitive cost of transport of goods
- highly efficient transportation systems
- quality and availability of qualified suppliers
- advanced ICT network
And the benefits of exporting to Spain include…
- entry route to Latin America
- size of the market
- English accepted as a business language
- familiarity with British products and openness to them
- proximity and availability of flights, including low cost airlines
And because Spain is a similar market to the UK, there aren’t really any major challenges to UK companies and there are no specific restrictions place on overseas companies doing business out there.
You should be mindful of the following complications though…
- long payment terms with many organisations working on 90 to 120 payment days
- some inflexibility remaining in the labour market
- high degree of devolution of powers to Spain’s 17 autonomous regions
And remember, you can now screen share and video conference, using Crankwheel.
How does tax work in Spain?
The main tax rates in the Spain are:
- VAT – known as IVA and charged at a standard rate of 21%, with a reduced rate of 10% and 4% on some goods, including food, drinks, educational material and medical aid.
- Corporation tax – charged at 30%, with reduced rates for some smaller businesses.:
- Income tax – if you’re resident in Spain for more than 183 days a year, or have business and economic interests there, you’ll be charged income tax at the following rates:
- Up to €12,450 – 19%
- €12,450–20,200 – 24%
- €20,200–35,200 – 30%
- €35,200–60,000 – 37%
- More than €60,000 – 45%
How will I be affected by customs in Spain?
The internal EU single market allows for the free movement of goods and services without any import duties being applied, and testing is mandatory for some imported goods, especially technical and electrical equipment.