In the global investment landscape, Spain, with its unique advantages, has gradually become the focus of investors. In recent years, it has shown a good economic growth trend, an open policy environment, improved infrastructure, great potential for industrial development, and increasingly close trade and investment relations with China, providing abundant opportunities for investors, but at the same time, it is accompanied by certain risks.

Ⅰ.Strong Economic Growth

In recent years, Spain's economy has shown a strong growth momentum. In 2024, its economic growth rate reached 3.2%, which is an impressive figure, four times the average growth rate of the euro zone. The Organization for Economic Cooperation and Development (OECD) is also optimistic about Spain's economic prospects, predicting that its GDP will grow by 2.6% in 2025 and 2.2% in 2026. The vigorous development of tourism has injected strong impetus into its economic growth. In 2024, Spain received about 94 million international tourists, an increase of 10% compared with 2023. The strong domestic demand also contributed a lot. In 2024, domestic demand contributed as high as 2.8 percentage points to economic growth. In addition, the injection of EU recovery funds has provided financial support for Spain's economic development, and Spain has received 47.9 billion euros in grants.

II. Relaxed Policy Environment 

The Spanish government has an open attitude towards foreign policies and actively promotes economic development. In terms of immigration policy, its open and inclusive attitude has attracted a large number of non-EU nationals. According to relevant data, in 2024, the number of non-EU nationals in Spain reached 5.2 million, accounting for 11% of the total population, and these immigrants have provided sufficient labor for Spain's economic development. In terms of tax policies, many preferential measures are conducive to investment. For example, the "participation exemption" policy can exempt 95% of the taxes on dividends and equity gains of non-resident branches; in terms of research and development and innovation, the tax incentives are strong, and it is one of the countries with the most preferential tax systems in the Organization for Economic Cooperation and Development (OECD); under the "patent box system", the transfer of patents and other intangible assets can reduce taxes by up to 60%. The general corporate tax rate is 25%, but due to various tax incentives and exemptions, the effective tax rate is about 20%.

III. Complete Infrastructure

Spain has a developed transportation and logistics system. In terms of aviation, there are 50 airports in its territory, among which Madrid and Barcelona airports are major aviation hubs in Europe, with busy routes connecting all parts of the world. Road transportation is also excellent, with expressway mileage exceeding 17,000 kilometers, ranking among the top in the EU. In terms of railways, the high-speed railway line is 3,402 kilometers long, ranking third in the world, and efficient railway transportation facilitates the flow of people and goods. In terms of maritime transport, 46 ports are distributed along its coastline, with a cargo throughput of over 560 million tons. There are also 152 logistics parks, including the largest logistics platform in Europe. The perfect logistics facilities have promoted trade and commercial activities. According to the World Economic Forum's "Global Competitiveness Report", Spain ranks seventh in the world in terms of infrastructure quality.

IV. Great Industrial Potential

Aerospace Industry：Spain has made remarkable achievements in the aerospace field and holds a world-leading position in areas such as low-pressure turbine engines and air traffic management systems. Airbus has established a production base here, and Boeing has also set up its first R&D center outside the United States in Spain. In 2019, the export value of Spanish aerospace equipment reached as high as 6.79 billion US dollars, accounting for 2.0% of its total export volume.

Automotive Equipment and Parts Industry：As the second-largest automobile manufacturing country in the EU and the ninth-largest in the world, Spain boasts a strong automotive industry. It has 17 factories of 9 automobile brands, 1,000 auto parts companies, and 34 technical centers, creating 2 million jobs. In 2019, the automobile output reached 2.82 million units, with a turnover of 103 billion euros. There is a complete and competitive industrial supply chain system, efficient and flexible automobile manufacturing plants, and high-quality human resources here. Additionally, an automobile export platform and logistics infrastructure oriented to EU, Latin American, and North African countries have been established. Many well-known automobile manufacturers such as Mercedes-Benz and Volkswagen have invested here, with an average annual investment of 4 billion euros. Moreover, the Spanish automobile manufacturing industry is actively carrying out R&D and innovation activities in multiple fields including natural gas engines, lithium-ion batteries, and metal-air batteries.

Logistics and Transportation Industry：In the composition of Spain's logistics industry output value, road and railway transportation as well as warehousing account for a relatively high proportion. Its expressway mileage reaches 14,701 kilometers, ranking first among EU countries; the railway network mileage is 15,500 kilometers. There are 29 container terminals in 46 state-owned seaports, with an annual handling capacity of 22 million TEUs and an area of 7.73 million square meters.

Life Sciences：In 2019, the annual output value of Spain's biotechnology sector accounted for 4% of the gross domestic product. Relevant companies are actively investing in biotechnology R&D, with an annual growth rate of 8% and a total investment of 578 million euros. There are approximately 3,000 companies engaged in biotechnology activities, employing 180,000 people, including over 10,000 R&D personnel. The number of pharmaceutical companies is 425, most of which are multinational corporations. The sales volume in the pharmaceutical industry reaches 15.6 billion euros, growing at a rate of 4.5% annually.

Agriculture：There are a large number of companies in Spain's agricultural product industry, amounting to 29,000. In the agricultural field, Spain can be regarded as an outstanding performer. It is the world's largest producer of olive oil and table olives, the world's third-largest and the EU's largest exporter of fruits and vegetables, as well as the world's fourth-largest and the EU's second-largest producer of pork. Its olive oil output ranks among the top in the world, and the planting area and number of olive trees are the largest in the world. Meanwhile, Spain is also the world's third-largest wine producer, with the largest planting area of grapevines in the world.

V. Active Trade and Investment

The economic and trade relations between China and Spain have become increasingly close. At present, China is Spain's 6th largest trading partner in the world and the largest trading partner outside the EU. In 2024, the import and export trade volume between the two countries exceeded 53 billion euros. In terms of investment, by 2018, Spain had 2,508 investment projects in China, with an actual investment of 3.8 billion US dollars; China's various investments in all industries in Spain reached 3.3 billion US dollars. In recent years, Chinese enterprises have been active in investment in Spain. In 2024, Chery Automobile reached a cooperation with Spain's Ebro Company to jointly develop electric vehicles, planning to launch a number of electric models in the Spanish and European markets. Envision AESC also announced the investment in the construction of a lithium iron phosphate battery gigafactory in Spain, with an estimated investment of up to 2 billion euros. After completion, the factory will become one of the largest lithium iron phosphate battery production bases in Europe.

VI. Co-existing Investment Risks and Challenges

While seeing many investment opportunities, we must also face up to the risks and challenges in Spain's investment environment. Politically, as an important member of the EU, Spain's laws and policies are largely subject to EU decisions, and the EU's attitude towards China in political and economic aspects will directly affect the operation of Chinese-funded enterprises in Spain. In terms of exchange rate, the risk of fluctuation cannot be ignored. Spain uses the euro, and the euro exchange rate is affected by many complex factors, such as the global economic situation and the monetary policy of the European Central Bank, which may bring exchange losses to investors. Legally, investors must not only abide by Spain's domestic laws and regulations, but also comply with relevant EU laws and regulations. The complexity of the legal system increases the legal risks of investment. Culturally, there are great cultural differences between Spain and China, which may cause problems in enterprise management and market promotion. In addition, Spain's economy also faces challenges such as increasing public debt and high unemployment rate. The uncertainty of the global economy may also impact its exports and supply chain, thereby affecting investors' returns.

In general, Spain's investment environment has both opportunities and challenges. Before entering the Spanish market, investors need to fully conduct market research and risk assessment, and formulate scientific and reasonable investment strategies to better grasp opportunities, cope with challenges and achieve investment goals.