INTERES Invest in Spain

FDI in Spain rose to 43,349 million euros in 2007 according to the “2008 Report: Foreign Direct Investment in Spain” drawn up by the Government Agency INTERES Invest in Spain, from Bank of Spain balance of payments data.

The investment figure taken from the Register of Foreign Investments of the Secretary of State for Commerce grew by 164% compared with 2006, and reached 36,031 million euros. This figure does not include loans made to associated companies, investments made in buildings without company mediation and reinvestment of profits.

Despite the fact that a major part of the increase in FDI was the result of the purchase of part of Endesa’s share capital by Italian company Enel, when this operation is taken out of the equation, the trend remains equally positive: total FDI would have grown by 32.7% in gross terms and 153.4% in net terms.

In short, the figures show the excellent behavior of the Spain’s share of FDI capture in the world, which has grown significantly from 1.5% in 2006 to 3.9% in 2007.

In 2007, gross productive FDI in the country also grew substantially to reach 28,849 million euros, 196% more than in 2006, and a positive 12.4% more if the above-mentioned operation in the energy sector is excluded.

Similarly, excluding the Enel operation, the enlargements of companies already set up in the country continue to be the predominant type of operation, 76% of the total, which is a clear expression of the high degree of satisfaction enjoyed by foreign investors in Spain.

As for disinvestments, 94% correspond to sales to residents. The impact of disinvestments is therefore minimal in terms of employment and economic activity, since the business activities nearly always remain in the country.

Investing countries and sectors most attractive to FDI
The European Union is the main source of FDI in the country, 84.5% of total investments registered last year.

In 2007, the importance of Italy stands out because of the Endesa operation, as does the increase in FDI coming from emerging economies such as Mexico, India and Saudi Arabia.

Production and Distribution of Electricity, Real Estate Activities and Services, Financial Intermediation, Other Manufacturing and Chemical Industry were the sectors that received the most investment in 2007.

Furthermore, there are interesting investment opportunities in high added value and technological sectors as is manifest in the Ocomonitor figures for greenfield projects in 2007, mainly in software and CIT, financial services, renewable energy and distribution and logistics sectors.

This fact is also confirmed by data from the latest report of the UNCTAD on direct investment, which shows a 57% increase in the number of greenfields attracted to Spain between 2005 and 2006.

The impact of FDI on Spain
The consequences of the increase in foreign direct investment on the country are very beneficial with the latest data on stock, 2005, FDI amounts to 32.6% of Gross Domestic Product. It also generates nearly 1.3 million jobs, 6.6% of the total registered in Spain and covers 43% of financing needs.