- 1Spain: An attractive country for investment
- 2Setting up a business in Spain
- 3 Tax System
- 4 Investment aid and incentives in Spain
- 5 Labor and social security regulations
- 6 Intellectual property law
- 7Legal framework and tax implications of e-commerce in Spain
- AI Annex I Company and Commercial Law
- AIIAnnex II The Spanish financial system
- AIIIAnnex IIIAccounting and audit issues
- State incentives for training and employment
- State incentives for specific industries
- Incentives for investments in certain regions
- Aid for innovative SMEs
- Preferred financing of the Official Credit Institute (Instituto de Crédito Oficial or ICO)
- Internationalization incentives
- EU aid and incentives
- European Investment Bank (EIB)
- European Investment Fund (EIF)
- European Structural and Investment Funds
- The funding policy of the Common Agricultural Policy (CAP)
- European Maritime and Fisheries Fund (EMFF)
- European Union Research and Innovation Programs
- Community initiatives in favor of corporate finance
3. State incentives for specific industries
3.4. Other specific industries
184.108.40.206. Aid for risk prevention and mining safety
Regulations governing the mining sector are established in Order IET/227/2015, of October 28, 2015, which sets forth the specifications for the grant, by competitive procedure, of aid for risk prevention and mining safety in the area of sustainable mining, for non-energy mining activities.
The aim of the subsidies regulated in this Order is to encourage the development of projects related to mining safety (from the standpoint of investment and training) carried out by non-profit enterprises and entities, for the purpose of helping to reduce mining accidents in Spain and, by extension, to attain sustainable growth in the industry.
The call for aid applications for projects and actions under the aforesaid Order for the year 2020 was made in the Decision of October 28, 2019 of the Secretariat of State for Energy.
Accordingly, and without limitation, suffice to say that this most recent call for aid applications deems projects carried out in Spain in the area of non-energy mining and targeted at the areas of (i) significant investments in safety at benefit mines and establishments and (ii) training programs, to be eligible for financing.
Potential beneficiaries of this aid could be private enterprises and groupings of such enterprises, provided that they hold the title to the mining public domain covered in the project and do not pursue their activity in the coal-mining industry (and are therefore not affected by the regime related to state aid aimed at facilitating the closing of uncompetitive mines). Non-profit institutions can also be beneficiaries of this aid, in which case they will not have to hold the title to the mining public domain, it being sufficient for them to provide evidence that they have a lawful interest relating to the mining activity.
The amount of this aid will consist of a percentage of the approved eligible investment and varies according to the following scheme:
- Aid for significant investments in mining safety: The minimum amount of the aid granted will be €12,000, while the maximum amount cannot exceed 20% of the eligible costs. Nonetheless, this maximum amount is envisaged only if applicants are SMEs and micro-enterprises, and is reduced to 10% of the eligible costs in the case of medium-sized enterprises. In the case of large enterprises, the maximum aid cannot exceed 5% of the eligible costs.
- Mining safety training projects: The intensity of the aid will be at least €4,000 and may equal (i) up to 100% of the cost of the accepted eligible investment, where the applicant is a non-profit institution; (ii) up to 50% of the cost of the eligible investment in the case of large enterprises; (iii) 60% in the case of medium-sized enterprises; and (iv) 70% in the case of SMEs and micro-enterprises. The eligible investment cost is calculated, in this type of aid, having regard to approved classroom hours approved and attendance of the complete courses described in the project. The respective calls for aid applications will stipulate not only the maximum hourly unit cost per worker and per hour and the maximum and minimum number of students per course, but also the maximum eligible cost per student and per project.
In the specific case of aid for training activities projects, the following restrictions will be imposed:
- If the projects are submitted by mining enterprises or groupings of mining enterprises, the amount cannot be higher than €100,000 per enterprise or grouping and project.
- A single enterprise cannot receive more that €200,000 of aid for training in this area within a period of three consecutive fiscal years (de minimis aid).
Lastly, please note that the beneficiary of the aid granted under either of the two lines explained above must make the investments between the date of the aid application and a date not later than four months after the notification date of the decision granting the aid.
220.127.116.11. Action Framework for Coal Mining
The series of measures in support of coal mining and mining areas is set out in the Framework Agreement for a Fair Transition in Coal Mining and the Sustainable Development of Mining Areas for 2019-2027, executed with the Ministry of Ecological Transition. This Framework Agreement, which has been in force since December 31, 2018, bears in mind the current situation in the industry following the end of the aid granted to cover losses in the mines pursuant to EU requirements and in line with the current energy transition process.
Thus, the main objectives of this Framework Agreement would be the following:
- To reactivate economic growth and encourage alternative development in mining areas in order to achieve their structural transformation, economic recovery and social welfare.
- To increase the flexibility of the conditions laid down for businesses that wish to continue to extract coal as from 2019 and that have to return the aid received in accordance with Council Decision 2010/787/EU, of 10 December, 2019 on State aid aimed at facilitating the closure of uncompetitive coal mines.
- To maintain lines of aid to encourage the creation of business projects aimed at generating employment and providing support for the creation of related infrastructures that enable workers that have become unemployed due to the closure of the mine to regain employment.
- To design specific measures to train workers in the coal mining industry and maintain aid that helps to cover the exceptional costs linked to closure set forth in EU legislation.
Although in some cases the bases and the related regulatory implementation required for application have not yet been approved, the Framework Agreement instruments the following principal lines:
- Aid for exceptional costs incurred by coal businesses:
This line of aid, envisaged for the period 2019-2025, is directed at mining companies included in the Plan for the Closure of Uncompetitive Coal Mines in the Kingdom of Spain in accordance with the aforesaid Decision 2010/787/EU.
It includes two types of aid:
- Social aid for workers in coal production units.
This aid have already been specifically implemented by Royal Decree-Law 25/2018, of December 21, 2018 on urgent measures for a fair transition of the coal mining industry and the sustainable development of coal mining areas and, where not expressly regulated in this law, by Royal Decree 676/2014, of August 1, 2014 establishing rules on aid due to employment costs aimed at covering exceptional costs related to plans for the closure of production units in coal mining businesses.
In particular, Royal Decree 676/2014 sets forth the direct grant of aid to companies that are pursuing or have pursued an activity related to coal production, to enable them to cover certain costs incurred on termination of their workers’ employment contracts as a result of the closure of coal production units used for the generation of electricity included under the aforesaid Closure Plan.
The purpose of this aid is to alleviate the social and regional consequences of the closure of mines and is projected to cover labor costs for older workers and compensated resignation.
In addition, the Framework Agreement provides for other social aid aimed at workers affected who do not meet the requirements to access the above-mentioned aid.
- Aid of an exceptional nature aimed at covering the costs of closure of the production units and offsetting the environmental impact.
The Framework Agreement implements this aid in order to cover the work/measures included in the restoration plans that have been authorized in advance by the competent mining authority. Eligible for this aid are mining companies that have requested authorization from the competent mining authority for: (i) the Project to Definitively Abandon the Facilities; (ii) the Project for the definitive Closure of the Facilities, and which meet all other statutory requirements to be able to qualify for this aid.
The Framework Agreement also includes the possibility of adopting measures in support of workers in the industry that continue mining after December 31, 2018 in the production units of the companies included in the Closure Plan of the Kingdom of Spain and which intend to close between 2019-2025.
Other measures are also established for workers in the industry such as (i) restoration activities; (ii) job vacancy services; (iii) social aid for workers in processes of reviewable total disability.
- Social aid for workers in coal production units.
- Measures to revive mining areas:
In accordance with the Framework Agreement, the following measures can be implemented under this line of aid:
- Measures to revive coal-mining areas aimed at financing new business facilities and extending existing ones.
Individuals who must pursue the activities on which the grant of this aid is based, who must live in the areas affected by the restructuring and modernization of the coal mining industry qualify for this aid.
Specifically, investment projects which generate employment in the area of economic activity that may receive aid, are eligible for finance, provided the following conditions are met:
- Business projects with an investment in excess of €100,000, which undertake to create 3 or more job positions and which also meet the other requirements of the Framework Agreement.
- Aid to small investment projects under the following conditions:
- Minimum amount of €30,000 and a maximum of €500,000, with minimum undertakings to create employment.
- Fall within any of the economic activities that are eligible for finance, provided that they are carried out in any of the municipalities included in the territory covered by the Plan.
- Aid for alternative development in mining areas.
The development of infrastructures located in the municipalities affected by closures of the coal mining industry are eligible for this aid.
At present, aid aimed at boosting the development of mining areas is regulated by Royal Decree 675/2014, of August 1, 2014, regulating the direct grant of aid aimed at fostering the alternative development of coal mining areas, through the development of infrastructure projects and restoration projects in areas that have been degraded as a result of mining activities.
Autonomous communities, municipal councils and other local entities included in the geographic area of the Royal Decree, in accordance with Annex I of same, are eligible for this aid.
The timeframe envisaged for this aid is until 2023, although in accordance with the regulation of the Framework Agreement, the material execution of the actions that can be financed may be extended until 2027.
The Framework Agreement establishes, in addition to the aid to revive mining areas referred to above, that mining areas may qualify for other additional measures defined in the Plan for Urgent Action in Fair Transition, which must be agreed upon between the autonomous communities, local entities and social players.
- Measures to revive coal-mining areas aimed at financing new business facilities and extending existing ones.
3.4.2 Industrial Investment
The process of adapting certain traditional industrial sectors to new forms of production, against a backdrop of processes to rationalize and modernize the business segment, has caused severe losses in the productive fabric and a significant elimination of jobs.
In an effort to mitigate and, to the greatest extent possible, avoid such noxious effects on the industrial fabric as a whole and, in particular, on the areas most affected by the aforesaid adaptation process, the Ministry of Industry, Trade and Tourism has been launching support initiatives with a view to promoting, regenerating or creating the industrial fabric.
The current initiative is Order ICT/1100/2018 of October 18, 2018, setting forth the specifications for the grant of financial aid for industrial investment in the context of the public policy on reindustrialization and strengthening industrial competitiveness, which regulates the grant of aid for initiatives in strategic industrial sectors under the aforesaid policy (REINDUS Program), which was amended by Order ICT/768/2019, of July 11, 2019, with respect to, inter alia, the requirements imposed on applicants, assessment criteria and grounds for repayment.
The specifications bring the criteria of former Reindustrialization Programs into line with that of Programs for the Development of Strategic Industrial Sectors, placing special interest in enterprises which incorporate advanced technologies in their processes and products, create qualified jobs with the greatest possible contribution of added value and, in short, contribute to increasing the country’s export base.
The last call for applications for this type of aid, for the entire national territory, was published in 2019 in the Order of September 19, 2019 of the Secretariat-General of Industry and of SMEs, without it having been possible to confirm, having regard to the information furnished by the Ministry of Industry, Trade and Tourism, when the new call for aid for 2020 will take place.
Although the aforesaid Order containing the call is focused on aid for projects and actions targeted at reindustrialization and boosting competitiveness, carried out throughout Spain, it includes, following the resolutions adopted by the Industry and SME Sectorial Conference on March 25, 2019, a group of municipalities classed as “priority areas” and, accordingly, the execution of projects in one of those areas will give the project more points. The financial support that these projects could receive, in general, is instrumented through long-term loans, with the following types of actions eligible for financing:
- Creation of industrial establishments: Considered as the start-up of a new production activity anywhere in Spain.
- Relocation: Understood as changing the location of a prior production activity to anywhere else in Spain.
- Improvements and/or modifications of production lines: Understood as investing in equipment that enables the modernization of existing production lines or which generates the implementation of new production lines, in industrial establishments that are already in production at the time of the application.
- Productive implementation of Connected Industry 4.0 technologies: Understood as investing in the acquisition of fixed tangible assets in industrial establishments that are already in production at the time of the application, in order to:
- Implement hybrid solutions of the physical and digital world (intelligent systems, low-end and embedded systems, sensors, wearables, e-tags, virtual reality and 3D printing, robotics and unmanned vehicles in the industrial establishment) in production processes that generate at least one full production line.
- Manufacture the systems defined in the above point.
- Implement physical network infrastructures for digital connectivity of production processes that move towards the «Internet of Things».
Merely replacing the machinery and/or part of the components or auxiliary production elements, as well as repairs and maintenance are excluded from these definitions.
In this regard, the Order setting forth the Specifications clarifies that industrial investments arising from any of the above typologies have to be technically viable according to current state or situation of the technology at industrial scale.
Potential beneficiaries of the aid will be any company with its own legal personality, duly incorporated in Spain (provided that it does not form part of the public sector), which pursues or is planning to pursue a productive industrial activity (specifically, referring to activities under Section C Divisions 10 to 32 of the National Classification of Economic Activities), to be selected by competitive procedure.
The following are eligible expenses:
- Investments for the creation and relocation of industrial establishments:
- Expenses incurred on civil works: Tangible investments in development and piping, expressly excluding land.
- Building expenses: Tangible investments for the acquisition, construction, expansion or fitting out of industrial premises, as well as installations and equipment not directly related to production).
- Production apparatus and equipment: Acquisition of fixed tangible assets directly linked to production, excluding external transport elements.
The sum of the civil works and building items may not exceed 70% of the total eligible budget.
- Investments in relation to improvements and/or modifications of production lines:
- Civil works expenses (tangible investments in development and piping, expressly excluding land).
- Building expenses (tangible investments for the acquisition, construction, expansion and fitting out of industrial premises, as well as installations and equipment not directly related to the production process).
- Production device and equipment expenses: acquisition of fixed assets directly related to production, excluding external transportation elements.
- Production process engineering expenses: expenses of own staff and external collaborations required to design and/or redesign processes directly linked to the above-mentioned devices and equipment. Any form of civil engineering or consultancy associated with the management and processing of the financing requested is expressly excluded.
The sum of the civil works and building items may not exceed the budget of devices and equipment linked to production. In addition, production process engineering expenses may not exceed 30% of the acquisition cost of the production devices and equipment. Own staff costs within this item will be limited to 5% of the budget for the acquisition of production devices and equipment.
- Investments regarding the productive implementation of «Connected Industry 4.0»:
- Civil works expenses: Tangible investments in development and piping, expressly excluding land.
- Building expenses: Tangible investments for the acquisition, construction, expansion and fitting out of industrial premises, as well as installations and equipment not directly related to the production process.
- Production device and equipment expenses: Acquisition of fixed tangible assets directly related to production, excluding external transportation elements; and acquisition of specific software for hybrid or digital connectivity solutions in production processes.
- Production process engineering expenses: Expenses of own staff and external collaborations required to design and/or redesign processes directly linked to the above-mentioned devices and equipment. Any form of civil engineering or consultancy associated with the management and processing of the financing requested is expressly excluded.
The sum of the civil works and building items may not exceed the budget of devices and equipment linked to production. In addition, production process engineering expenses may not exceed the acquisition cost of the production devices and equipment. Own staff costs within this item will be limited to 15% of the budget for the acquisition of production devices and equipment.
- The financed actions must be executed from January 1 of the year of the related call, up to the maximum time limit of 18 months from the date of the grant decision.
- The minimum eligible budget for the investments is set in each call for aid applications (in 2019 it continued to be €100,000), the maximum amount of the funding to be granted will be 75% of the budget considered eligible.
Additionally, for enterprises without significant historic accounts (according to the definition given for such purpose in Schedule I of the Order), the loan in which the aid is materialized cannot exceed three times their demonstrable equity. In all other cases, the limit is set at five times the applicant’s equity (as shown in the accounts submitted for assessment), notwithstanding the fact that each call for aid applications can stipulate proportions lower than those indicated in both cases.
The maximum amount of the loan to be granted is subject to the risk exposure accumulated at the company with the Directorate-General of Industry and of the SME. In the case of companies without significant historic accounts, the maximum risk exposure may not exceed three times its last equity, and five time for all others.
- The interest rate applicable to the loan granted was established for the 2019 call at 1%.
- The repayment period of the loan will be, in general, 10 years, with a 3-year grace period, over which the loan is to be repaid in equal annual installments once the grace period ends.
- Investments for the creation and relocation of industrial establishments:
Finally, the grant of the loan will require the creation of a guarantee, the amount of which will be equivalent to the loan percentage granted plus the same percentage of the total financial interest accrued and will be determined according to the classification obtained by the applicant according to the methodology described in Annex II of Order ICT/1100/2018, in accordance with the following table:
Classification category Percentage guarantee to be given on the loan granted plus the financial interest accrued Excellent (AAA-A)10% Good (BBB)41% Satisfactory (BB)70%
Although the provision of guarantees is a prerequisite for the grant of the loan, on an exceptional basis and in response to the situation caused by the COVID-19 public health crisis, in connection with loan applications submitted in answer to the 2019 call, the guarantees required from applicants can be provided, pursuant to Royal Decree-Law 11/2020, of March 31, 2020, after the concession decision and before the payment of the loan. The period in which to provide guarantees will end on November 3, 2020 but, should they not be provided in the period granted, the beneficiary will forfeit the right to collect the loan.
Similarly, with respect to projects that were being executed when the state of emergency was declared (in Royal Decree 464/2020, of March 14, 2020), special methods have been established for scaling cases of breach (pursuant to Additional Provision 17 of Royal Decree-Law 11/2020 referred to above). Along the same lines, all beneficiaries of reindustrialization loans already granted will be allowed to request the modification of the approved repayment tables over a period of two and a half years after Royal Decree 463/2020, of March 14, 2020, entered into force, provided that the COVID-19 public health crisis has given rise to periods of inactivity at the beneficiary, to a reduction in the volume of its sales or to interruptions in the supply of the value chain. Modifications of the repayment table, which must be expressly authorized by the body that issued the concession decision, could consist of an extension of the maximum repayment deadline or the maximum grace period (if no amount of the principal has yet fallen due) or other analogous modifications, provided that the maximum level of aid intensity and the risk level existing when the loan was granted are maintained.
3.4.3 Pharmaceutical Industry
In a Decision of May 11, 2017, the Government Delegate Committee for Economic Affairs approved the initiative to Boost Competitiveness in the Pharmaceutical Industry or PROFARMA (2017-2020). This is a joint initiative with what were the Ministry of Industry, Trade and Tourism, Ministry of Science and Innovation and the Ministry of Health and Consumer, with the goal of boosting the competitiveness of the pharmaceutical industry in Spain by modernizing the industry and fostering activities that contribute more added value (such as investments in new industrial plants and in new technologies for production as well as through fostering research, development and innovation).
PROFARMA’s commitment to modernizing the industry entails:
- For national enterprises, seeking wider markets through internationalization, incorporating the use of new technologies in their production processes and in research, development and innovation processes, and improving the focus of their lines of research.
- For multinational enterprises, increasing their commitment to developing the industrial structure, boosting their investment effort not only in infrastructures and production activities, but also in R&D&I in Spain, and significantly improving the commercial balance.
The achievement of the general goal of PROFARMA is visible in the attainment of the following specific objectives:
- Increasing the total investments made in Spain by enterprises participating in PROFARMA, placing special emphasis on increased investments in the assets used in production and in research and development.
- Increasing R&D&I expenses.
- Increasing jobs in activities related to R&D&I, as well as in production and quality control.
- Investing the deficit of the commercial balance of enterprises included in PROFARMA.
- Increasing current R&D expenses over sales to the National Health System.
It is in this context, that the Decision of July 6, 2017 by the Secretariat-General of Industry and the SME was issued, which carries out a multi-year call for aid applications for 2017, 2018, 2019 and 2020. Applications may be submitted for the 2020 call from April 1 through May 291.
Eligible for inclusion in PROFARMA are enterprises in the pharmaceutical industry, located in Spain, which manufacture or market medicinal products for human use and which pursue pharmaceutical R&D&I activities in Spain. Participation in PROFARMA requires the enterprise to submit to an assessment aimed at its subsequent classification and qualification by the Coordination Committee in charge of the program’s management, having regard to the enterprise’s efforts to achieve the program’s general goal and specific objectives, and in view of its industrial, economic, R&D&I and other resources and results.
Accordingly, enterprises will be classified in three Groups (A, B and C) depending on (i) whether or not they have their own pharmaceutical production plant and (ii) on the significance (or lack thereof) of the research activity they pursue. Equally, the Coordination Committee will assign them a qualification (excellent, very good, good and acceptable) depending on the assessment and points obtained in accordance with the criteria stipulated in the regulations.
The classification and qualification proposal of each of the pharmaceutical enterprises that participate in the PROFARMA program will be forwarded to the Secretariat-General of Industry and the SME of the Ministry of Industry, Trade and Tourism, for the final decision to be adopted.
At the end of each year of the PROFARMA (2017-2020) program, the progress made on the aforesaid goals and objectives will be measured using the following indicators:2017-2020 Goals
|Indicators||2017 Call||2018 Call||2019 Call||2020 Call|
|Investment in R&D||€46 million||€48 million||€50 million||€52 million|
|Investment in production||€260 million||€265 million||€270 million||€275 million|
|R&D&I expenses||€1,100 million||€1,125 million||€1,150 million||€1,175 million|
|R&D&I related jobs||4,250||4,300||4,350||4,400|
|Production related jobs||13,000||13,100||13,200||13,300|
|Commercial balance||€-3,500 million||€-3,350 million||€-3,200 million||€-3,050 million|
|% current expenses in R&D / NHS sales||15%||15.5%||15.6%||15.9%|
1 Nonetheless, please note that this time period has been suspended for the duration of the state of emergency declared by Royal Decree 463/2020, of March 14, 2020 (pursuant to Additional Provision Three of said royal decree), and will be resumed at the time it is declared to have ended.