SPAIN
Business Guide

Compiled by:

Swiss Business Hub Spain

Madrid, August 2009

Introduction

Spain is, at the beginning of the twenty-first century, one of the world’s most developed countries, with a very
important role in the international political and economic arenas. The country has well proved its capacity to
effectively translate consistent economic growth into significant investments, including communication networks
comprising thousands of kilometres of highways, high-speed train services and satellite facilities. This capacity
and the constant effort made to ensure the competitiveness of its economic structure have enabled Spain to be
placed among the world’s main economic players.

Arrival and departure

Swiss and European Community citizens need a valid national identity card or passport (if expired, for less than
five years) to enter Spain. Citizens from the rest of the world require a valid passport plus a temporary entrance
or residence visa issued by the appropriate Spanish Embassy or Consulate for their country of residence
unless they come from countries with which a visa exemption agreement has been reached. These persons are
exempt from an entrance visa for visits not exceeding 90 days and they must not have the intention of
undertaking any work in Spain.

The development of modern transportation and telecommunication infrastructures has been one of the priorities
of Spain's economic policy since the mid-1980s. Due to this effort, Spain enjoys today a modern network of
highways and is constantly establishing additional high speed railway connections between its most important
cities.

After the entrance in service of the Terminal 4 at Madrid Barajas International Airport on February 5, 2006 –
which doubled its capacity from 35 million passengers per year to 70 million –, two additional key hubs for
passenger traffic have been upgraded with modern state-of-the-art terminals. The inauguration of Barcelona
International Airport’s new Terminal 1 in June 16, 2009 increased its capacity to 50 million passengers, while
the new Terminal 1 at Málaga International Airport – expected to become operational in March 2010 – will be
able to handle up to 30 million passengers per year. Madrid ranks as the fourth most important airport in
Europe (after Paris, London and Frankfurt) and eleventh worldwide in terms of passenger traffic.

BY AIR :
Of the 39 airports in Spain, 33 have customs facilities. The main passenger airports are Madrid-Barajas,
Barcelona, Palma de Mallorca, Malaga, Gran Canaria, Tenerife and Alicante.

Several airlines offer daily flights to and from Spain :

Swiss :

Helvetic :

Iberia :

Easyjet

Clickair :

Air Berlin :

Spanair :

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BY SEA :

Spain's geographical position and the peninsular nature of its mainland with 3,933 km of coastline have led to
the development of 53 ports with sea links to all destinations. Regarding cargo traffic in 2008, the main ports
are Valencia (48.3 million tonnes) Algeciras (47.5), Barcelona (34.9), Las Palmas (17.9) and Bilbao (9.6).

BY LAND :

There are three frontier railway crossings into Portugal and two into the rest of Europe at Irún and Portbou.
There are numerous road border points leading into neighbouring countries, which handle a steady flow of
traffic.

Languages used for business

Spanish is the official national language for the entire country.
The six autonomous communities of Catalonia, the Basque Country, Galicia, Valencia, Navarre and the
Balearic Islands have declared regional languages official as well as Spanish. These are Catalan (in Catalonia
and the Balearic Islands), Basque (in the Basque Country and areas of Navarre), Galician and Valencian.

Although many large companies conduct business in English and Spanish, you cannot expect English (nor
French or German) to be widely spoken. Check ahead to determine if an interpreter is needed.

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Geographic features

The Kingdom of Spain stretches over an area of 505,990 square kilometres in South Western Europe, and is
the second largest country in the European Union after France. The territory of Spain covers the greatest part
of the Iberian Peninsula which it shares with Portugal, and includes the Balearic Islands in the Mediterranean
Sea, the Canary Islands in the Atlantic Ocean and the North African cities of Ceuta and Melilla.

Population

Total population in January 2009 was 46.62 million people, an 1.1% increase on January 2008. The
number of foreigners reached 5.6 million people (+6.3%), representing 12% of the total population.

The highest concentration of foreigners is located in the following autonomous regions : Balearics (21.7%),
Valencia Community (17.4%), Madrid (16.4%) and Murcia (16.3%).

The most numerous foreigners in Spain are the Romanian (796,576), followed by the Moroccan (710,401), the
Ecuadorians (413,715), the British (374,600) and the Colombian (292,971). There are over 20.000 Swiss
citizens registered with the Swiss representations in Spain. It is worth noting that the important inflow of
immigrants in recent years has helped Spain to offset the consequences of an aging population.

Spain is a markedly urban society as evidenced by the fact that more than 33% of the population lives in the
capitals of the Spanish provinces. The city of Madrid has a total population of 3.21 million inhabitants, while
Barcelona has a population of 1.61 million inhabitants.

Spain has a labour force of around 22.85 million people, representing 60% of the country’s population over 16
years old. The working population is generally middle-aged. The structure of the labour force by economic
sector has also changed significantly with a notable increase in the number of those employed in the services
sector and a decrease in the number of industrial and farm workers.

Economic indicators

After years of economic growth well above EU-level, Spain enters the second term of prime minister Rodríguez
Zapatero seriously affected by the global crisis stemming from the credit crunch and the subprime mortgages
crisis. This has led to the burst of the Spanish property bubble which accounted for much of the Spanish
economic growth during the last expansion cycle. Consequently the Spanish government official GDP growth
figures for 2008 (+1.2%) was recently reviewed downwards to +0.9%. In 2009, official figures for the second
quarter estimate that the GDP shrunk by 4.2% year-on-year.

Source : Instituto Nacional de Estadística (

www.ine.es

)

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Below you will find a table from the FMI showing the trends of key economic figures from 2005 to 2009
(estimates) :

Units

2005

2006

2007

2008

2009

GDP, constant prices

National currency
(EUR billions)

642.192 667.157 691.589 699.600 678.312

GDP, constant prices

Annual % change

3.615

3.887

3.662

1.158

-3.043

GDP, current prices

National currency
(EUR billions)

908.792 982.303

1,050.59

1,095.16

1,066.50

Inflation,
average consumer
prices

Index,

2000=100

117.002 121.171 124.616 129.762 129.735

Unemployment rate

% of total labor
force

9.160 8.513 8.263

11.325 17.700

Source: FMI, World Economic Outlook Database, April 2009 (

www.imf.org

)

Shaded cells indicate IMF staff estimates

Political scene

Spain is a parliamentary monarchy. The head of state is King Juan Carlos I. His primary mission is to
arbitrate and moderate the regular functioning of the country’s institutions in accordance with the Constitution of
1978.

The ruling party is the Spanish Socialist Workers’ Party (PSOE) which has 164 deputies in Congress and 81
senators. The main opposition party is the Popular Party (PP) with 148 deputies and 102 senators. Mr. José
Luis RODRIGUEZ ZAPATERO is the prime minister and head of the government. He replaced Mr. José María
AZNAR from the Popular Party on April 17

, 2004 and was reconfirmed by Parliament for another term on April

11th, 2008.

For the first time, women outnumber men in Spain’s cabinet (9 women & 8 men lead the country), including the
First Vice-President, María Teresa Fernández de la Vega. Spanish Socialist leader Rodriguez Zapatero, faces
a second term of economic challenges as well as continuing concerns over regional separatism.

Religion

Around 80% of the population is Roman Catholic.

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Public holidays

If a public holiday (and Spain has the highest number in Europe with at least fourteen, mostly national, but also
regional and local holidays) falls on a Tuesday or Thursday, many people take a four-day weekend (known as
hacer Puente).

Spain remains a formally Catholic country and many official holidays relate to religious festivals, particularly
days of obligation such as Corpus Christi (a movable feast celebrated in Cordoba, Seville and Toledo) and the
immovable Feasts of Epiphany (6 January), Saint James (25 July), the Assumption (15 August), All Saints (1
November) and the Immaculate Conception (8 December). The secular National Holiday is 12 October [Día de
la Hispanidad (Hispanic Day)] and 6 December is Día de la Constitución (Constitution Day).

In addition, all towns and villages have important annual fiestas and/or ferias that may last several days, mostly
during August and September. It is, therefore, imperative that you consult regional and local calendars as well
as the list of national holidays before making travel plans.

Annual vacations of 30 days (including Saturdays and Sundays) are compulsory. They are usually taken
around Easter [Semana Santa], or from July to September. August is the most popular month.

Health and inoculations

None

Time zone and the myth of the Spanish “siesta”

Spanish time is GMT+1 from the end of October to the end of March and GMT+2 the rest of the year. Canary
Islands' time is one hour behind the rest of Spain all year round.

If one were to identify a single feature that symbolises Spain's progress in recent decades, then it would have
to be the revision of attitudes towards the traditional siesta. Of course, there are many rural areas, particularly
in the south, where the long afternoon break remains the norm, but this is no longer the case in the main
centres of commerce. Whilst typical working hours in Spain may still be somewhat different from most of
Europe (longer mid-day break and working till late hours), they are no longer completely idiosyncratic.

Electricity supply

Electric current in Spain is 220 volts AC, 50 cycles.

Currency – the Euro €

The introduction of the single currency on January 1, 2001, in twelve countries of the EU, has further increased
Spain’s opportunities of growth and development.

Currency exchange in June 2009 (monthly average) was : 1 Euro = CHF 1.5145

Methods of payment

Credit cards are widely accepted in restaurants, shopping malls and major boutiques. Only small shops and
rural areas are less inclined to accept credit cards.

The Bank of Spain (Banco de España) is the country's central bank.

Swiss National Bank (

www.snb.ch

)

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For a list of Spain’s Financial Institutions, you can activate the following link :

http://www.bde.es/infoest/ifm/if_es.htm

Hotels & Restaurants

Information on hotels and restaurants is available at :

http://www.hoteles-restaurantes.com/diva.swf

Communication

The telephone country codes are :

-

from Switzerland to Spain : dial 0034 and then the number of your contact

from Spain to Switzerland : dial 0041 and then the area code (without “0”) followed by the contact number

Fax and E-mail connections are widely available -especially for business- in all major hotels.

Driving in Spain

If you are a citizen of Switzerland, Liechtenstein, the European Union, Norway or Iceland all you need is your
valid driver's licence. If you are from another country, you will need an International Driver's Licence.

To drive in Spain you must be at least 18 years old. To rent a vehicle, you must be at least 21.

Business hours

BANKS :

Generally, banks are open to the public Monday through Friday from 8.30 AM to 2.30 PM, and from 8.30 AM to
1 PM on Saturdays. From May 1 to September 30, banks are closed on Saturdays.

SHOPS :

Minimum shop openings for the whole country are: Monday to Saturday from 10 AM to 2 PM and from 5 PM to
8.30/9 PM.

Department stores, supermarkets and hypermarkets usually stay open throughout the day and for longer hours.
Shops can open a minimum of eight Sundays or holidays each year. Each autonomous community can decide
which of these days are applicable and whether they want to add more days to the minimum requirement.

PUBLIC OFFICE :

Open Monday through Friday from 8 AM to 3 PM

Swiss Diplomatic and Consular Representations in Spain

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EMBAJADA DE SUIZA
Calle Nuñez de Balboa 35A, 7° Piso
E - 28001 Madrid
Telephone

0034 91 436 39 60

Fax

0034 91 436 39 80

E-mail:

vertretung@mad.rep.admin.ch

Opening hours for the public are from Monday to Friday from 09.00 AM to 01.00 PM.
The Embassy can be contacted by phone from 08.00 AM to 01.30 PM and from 02.30 PM to 05.00 PM.

CONSULADO GENERAL DE SUIZA
Edificio Trade
Gran Via de Carlos III, 94,7°
E - 08028 Barcelona
Telephone

0034 93 409 06 50

Fax

0034 93 490 65 98

E-mail:

vertretung@bar.rep.admin.ch

Opening hours for the public are from Monday to Friday from 09.00 AM to 12.30 PM.
The Consulate General can be contacted by phone from 08.00 AM to 01.00 PM and 02.00 PM to 05.30 PM
from Monday to Thursday. Fridays, the Consulate can be reached from 08.00 PM to 02.00 PM.

Special features of the commercial distribution and retail industries

Commercial distribution has undergone far-reaching technological changes in the past few decades, with self-
service sales techniques taking the prominent position in this transformation. Specialisation and convenience
are today key retail factors, leading to retail segmentation by product.

The “one shop, all products” concept that led to the rapid development of hypermarkets in metropolitan areas
during the 80s and 90s is no longer the driving force in this industry. Department stores and hypermarkets (i.e.
El Corte Inglés, Carrefour, Alcampo “Auchan”, Eroski) still hold a prominent position, but the rising of new retail
concepts has weakened their lead.

Food retailing is now in the hands of supermarkets (Mercadona, Caprabo (now owned by Eroski), AhorraMás)
which have successfully combined convenience, “soft discount” techniques and “private labels”, while focusing
on food as their core segment.

Big-box stores are rapidly gaining ground to department stores and hypermarkets in the non-food products
market segment. Commercial parks are emerging as an amplified version of the old hypermarkets. Specialist
retail stores sell independently furniture (Ikea), home appliances (Media Markt), sportswear (Decathlon), Do-It-
Yourself (Leroy-Merlin) and many other products within these commercial parks.

Finally, shopping centres remain the driving force, mainly in fashion and clothing retail with global success
stories like Zara Group or Mango. Franchising is still a successful formula, standardizing “high streets” and
shopping centres all over Spain.

The combined effect of “soft discount” supermarkets, big –box specialist stores / commercial parks and fashion
specialists (Zara / franchises) is aiming directly at the hypermarkets and department stores (El Corte Inglés)
core business. Still at the top, and thanks to their financial strength, they attempt to adapt to these new models,
exploring at the same time new business options. Hypermarket chains, as well as El Corte Inglés, are
introducing services in their range of products as new sources of growth. Insurance, travel services, car
dealerships, petrol stations, etc. are the alternative solution for these distribution giants.

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Tax system

Three types of Value Added Tax (VAT) are imposed. The general rate of 16%, the reduced rate of 7% and the
super-reduced rate of 4%. Some transactions are exempt.

VAT is not applicable in the Canary Islands, Ceuta and Melilla. The standard Canary Islands Indirect General
Tax rate of 4,5% is levied in the Canary Islands. A similar Tax on Production, Services and Imports is
applicable in Ceuta and Melilla.

Spain’s current standard corporate income tax rate is 35% on net income (30% for SMEs). Special rates are
applicable to some real state investment funds (1%), certain cooperatives (20%) or entities engaging in oil and
gas research and exploitation activities.

For more detailed information, you may want to consult the document “Legal Provisions” which is available on
the webpage

www.osec.ch/sbhspain

or can be requested at

sbhspain@mad.rep.admin.ch

Canary Islands, Ceuta and Melilla

Although the Canary Islands form part of the Community's customs territory, the common custom tariff was
introduced progressively during a transitory adaptation period that was finally concluded on December 31,
2000. The Canary Islands have a specific supply system, which governs trade exchanges and entails a series
of intercommunity aids for certain farm products and exemption from import duties for the same products when
they come from third countries.

Ceuta and Melilla are not part of the EU's customs territory and have a different trade status from the rest of the
country, based on the respect for these areas' traditional free foreign trade.

Business practice

The People

Personal pride and individualism are highly valued, as are character and breeding. Modesty is valued over
assertiveness. People strive to project affluence and social position. Personal appearance, image and human
relationships are very important.

Keep in mind that during a first meeting, Spaniards may want to become acquainted with you before
proceeding with business, so be accommodating and answer any questions about your background and family
life. Personal qualities are valued just as much as technical ability, professionalism or competence.

Meeting and Greeting

Shake hands with everyone present -men, women- at a business or social meeting. Shake hands again when
leaving.

Men may embrace each other when meeting (friends and family only). Women may kiss each other on the
cheek and embrace.

Spain is one of the least punctual countries in Europe. Although you should always be punctual yourself, you
should not be surprised or alarmed if you are kept waiting for some 15-20 minutes. This is neither uncommon
nor intentionally rude but you may want to bring work or a book to fill the time while you wait. Perhaps the only
things that occur on time in Spain are bullfights, football matches and theatrical performances.

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You should be aware of the importance hierarchy and position play in Spanish business culture. For example, it
would be frowned upon if you spent a great deal of time and attention on someone who is of lesser rank than
you. It will be in your best interest to focus chiefly on those who would be considered your "equals".

It is difficult to cause real offence without being directly insulting - and you should not confuse a Spaniard's
innate animation with anger or any other deep-seated emotion - but you must avoid making disrespectful
remarks about Spanish traditions or practices (i.e. bullfights) that you may find alien. You must certainly not
allude to national or regional stereotypes.

Body Language

Never touch, hug or back slap a Spaniard you do not know well, unless a friendly Spaniard touches you first.
Generally, Spaniards stand very close when talking and speak a lot with their hands.

Dress

Spaniards are extremely dress-conscious and will perceive your appearance as an indication of your
professional achievement and relative social standing. It is therefore important to dress con elegancia, which
means top-quality, conservative clothing. Men should wear dark woollen or linen suits and silk ties with shirts
and women should wear well-cut suits (including trouser suits) or business dresses made of high-quality
fabrics. Shoes are also an important element of dress. Shabby looking shoes and colourful socks can ruin any
nice outfit.

Obviously the weather can be an important factor in determining what to wear. As the temperature approaches
40ºC in the shade at the height of summer, it becomes increasingly acceptable to wear lightweight suits and,
outside an air-conditioned office, to loosen one's tie and throw one's jacket over one's shoulder.

As always, it is best to follow the example of your Spanish counterpart and to remember that it is 'cool' to look
smart but also that it is smart to look literally cool.

Corporate Culture

You should always make appointments in advance and confirm them by fax or Email just before your arrival.
When you arrive at an appointment, the most appropriate way to announce yourself is to present your business
card to the receptionist, who in turn will let your Spanish contact know that you have arrived.

There is no substitute for face-to-face meetings with Spanish business representatives to break into this
market. Spaniards expect a personal relationship with suppliers. Initial communication by phone or fax is
far less effective than a personal meeting. Mail campaigns generally yield meagre results.

Decision-making can be slow and tedious: various levels of hierarchy will be consulted and all aspects of your
proposal will be analysed in painstaking detail; only the highest individual in authority makes the final decision.
Spaniards generally expect the people with whom they negotiate to have the authority to make the final
decision.

Dining and Entertainment

Lunch usually starts at 2:00 p.m. but 3:00 p.m. is equally possible. Depending on the circumstances it could
either be a quick, casual meal at a local café or last for several hours in a fine restaurant. After returning to the
office, workers stay as long as necessary, typically until 7:00 p.m. or 8:00 p.m. but often much later for profes-
sionals.

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Business can be conducted over meals but you should be aware that Spaniards regard eating as a primarily
sociable activity so, if you do want to discuss business, you should make this clear to your Spanish counterpart
in advance. Breakfast meetings are not very popular and should certainly not be scheduled before 8:30 a.m.

Because of the comparatively unusual structure of the Spanish working day, it is probably best to arrange an
initial meeting for the mid-morning until or unless you know your counterpart's particular practice.

Interesting tips from Directors of Swiss subsidiaries in Spain

It's important that you stay involved with your Spanish counterparts, helping to implement what has been
agreed to. This must be done with sensitivity toward the pride that Spaniards feel in being able to handle things
independently. So, never be intrusive, but always be available; express an interest in learning about their ways,
while providing them with the resources and information they need to reach their objectives.

Swiss manufacturing companies often start off their activities in Spain using a Spanish representative. Quite
soon however, they realise that the particular traits of Swiss goods (and their high price) makes it
indispensable to create a subsidiary in Spain and contract staff devoted entirely to the Swiss product. This is
the way to provide the necessary market proximity and win over client confidence in order to boost
sales.

Each individual company needs to bring awareness to the market regarding the Swiss products’ quality and its
capability for total flexibility over adapting to client needs. Consequently, the added value provided by Swiss
products (for instance involving medium- and long-term solutions on technical, safety and energy-saving levels,
etc.) and the flexibility demonstrated by the Swiss companies confronted by client demands are key factors to
set up successfully in the Spanish market.

To gain the trust of the different stakeholders involved in a sector, it is essential to offer a customised service
giving furthermore the impression of market proximity in spite of the fact that goods are produced in Switzerland
(apparently far away).

Success in this market comes with maximum constancy and consistency on all levels:
-

visiting clients on a day-to-day basis

developing a network of contacts

providing specialised training for collaborators and practical instruction for users and technicians

offering solutions in line with the specific client requirements through interdisciplinary collaboration from
specialists

Finally, the ability to carry out business in the language of the country – both spoken and written – is of
utmost importance together with the necessity to produce any propaganda literature or leaflet in Spanish.

Additional information on

www.osec.ch/sbhspain

You may want to consult above-mentioned webpage in order to access additional useful documents with
information ranging form basic addresses to reports on major business sectors, regional reports as well as
detailed fair reports, etc.

This information has been collected by the SBHSpain to assist Swiss SMEs in their efforts to develop business
relations with Spain and to generally promote Swiss exports to the Iberian Peninsula.

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