• investing in the community of Madrid

    A favourable socioeconomic environment

    The Community of Madrid (CM) enjoys one of the most favorable tax systems in Spain. Among its main tax benefits are a one point reduction in the regional personal income tax rate (IRPF), the fact that the inheritance and gift tax (impuesto de sucesiones y donaciones) is practically eliminated, a lower rate for the wealth transfer tax (impuesto sobre transmisiones patrimoniales) for large families when acquiring their primary residence, and a higher minimum exempt amount for the wealth tax (impuesto sobre el patrimonio).

    The most common company types in Spain are corporations (Sociedad Anónima, S.A.) and limited liability companies (Sociedad de Responsabilidad Limitada, S.L.). In addition, the “new” limited liability company (Sociedad Limitada Nueva Empresa, S.L.N.E.) allows for establishing a company in less than 48 hours through simplified paperwork. For creating holdings in other EU member states, there is an option to establish a European Corporation (Sociedad Anónima Europea).

    The CM is the region of Spain that receives the most foreign direct investment (FDI). From 2005 to 2009 it recorded an influx of 62.158 billion euros in capital, which is equivalent to 65.9% of the total foreign direct investment received in Spain. Companies investing in the CM are primarily companies from Europe and the United States.

    In addition, within the context of the increasing internationalization of Latin American companies, the CM has become the natural place for these companies to take the next step by investing in Europe, for reasons such as the common language and the experience acquired by our professionals in developing businesses in Latin America. During the 2005-2009 period, the CM received over 1.777 billion euros in foreign direct investment from Latin America, primarily from Mexico.

    The CM also has excellent human capital. Annual compensation is generally divided into 12 monthly payments and 2 additional payments. Contributions to Social Security are split between the company and the employee. The minimum wage is established each year, and for the year 2010 it was an annual salary of 8,979.60 euros.

    Madrid is ranked number 3 worldwide as a center for business according to Standard & Poors.

    << back