Marketing Economic Paper

12 Pages 2998 Words

MKP: Economic Paper on Spain

Executive Summary

When looking to Spain’s economic activities for information about entering the market to do business in the country a few major points arise that may not be common knowledge or different from your self-reference criterion.

Spain has the 30th largest population in the world, with a majority of this population being between 15 and 64 years old. The largest population is found in the captial city of Madrid followed by Barcelona. Spain is a highly developed country.

Tax burdens to Spanish citizens and companies are lower than those found in the United States, and also have a lower federal tax burden. A majority of the goods and services sold there is a value added tax rate of 16%, but also a reduced rate of 7% on sales and imports of food items, water, pharmaceutical products, and private homes.

Working conditions in Spain are good, and most workers have fixed contracts. This may cause issue if the company does not wish to employ based on a contract system. If a contract system is adopted then it should be noted that it becomes more difficult to fire employees under this system. The typical pay schedule for Spanish employees is 14 times a year, 12 monthly and two bonus payments. There is also a serious unemployment rate in Spain which is creating new labor laws and economic policies that may affect hiring and firing of new local employees.

Primary industries in Spain currently are services and tourism. Spain allows for many foreign investment opportunities, but if seeking to employ a foreign citizen there may be difficulty receiving a work permit unless the company is registered in Spain or has a sponsor on the application. Spain also allows for 100% foreign ownership in most sectors.

Spain currently has a balance of payment surplus exporting more than they import. There are no bilateral trade agreements between Spain and any other developed nation. Th...