Spain, an exciting destination country for British companies
- Pilar Bazan
- Dec 17, 2024
- 5 min read
Projects and opportunities for 2025 :
“Spain is located in Southwestern Europe and borders France and Portugal. It is one of the biggest consumer markets in the EU and with a population of 46.4 million it provides a large consumer base for UK exporters to sell to. Spain is one of the top 10 largest trading partners of the UK. There is a demand for UK goods and services which UK businesses looking to export could benefit from.” (Source: www.great.gov.uk).
Spain was at the top of economic growth in the Euro zone in 2023 (2.7% annual growth) and has grown consistently during 2024. The fact that EU interest rates continue to come down and the labour market seems to be recovering present a favourable horizon for investment in Spain during 2025.
In addition to the interest in generating business within the country itself foreign companies have:
Spain’s borders with France and Portugal make the country a strategic geographical location for access to those two countries.
Spain’s traditional links and trade agreements with Latin America make the country an attractive base to look for reciprocal opportunities in neighbouring and overseas countries.
Spain also has access to the agreements in the EMEA markets (Europe, Middle East, North Africa), making it an interesting platform for inter-continental trading.
If you are a British company already doing business with Spain you will probably be familiar with the multiple reasons why the country is a good place to invest and look for suppliers. If, however, you are thinking about Spain as a destination country for the first time, you will need to discover the benefits and opportunities the country offers and why you should explore them.
In this article, we aim to explore the relevance of Spain as a target destination country and what opportunities it offers in all aspects of international business in 2025.
British investment in Spain, some figures
Trade between the United Kingdom and Spain has traditionally been fluent both in goods and services. The United Kingdom ranks among the ten main origin and destination countries for goods and services for Spain. Semi-finished goods, capital goods and vehicle components that are later transformed in finished goods with an added value are still essential for British companies present in Spain.
Spain was the UK’s 7th largest trading partner in the four quarters to the end of the second quarter of 2024 accounting for 3.6% of total UK trade. The UK is, in turn, the first country for Spanish foreign investment.
Like that of the United Kingdom, the Spanish economy is made of a large percentage of SMEs (mainly family companies).
According to the British Government fact sheet published 22 November 2024 on the latest statistics on trade and investment between the UK and Spain:
Prospects and opportunities
British companies with FDI (Foreign Direct Investment) in Spain remark the potential for economic growth and investment opportunities of the Spanish market in addition to the pool of talent offered by the country.
British investment in Spain is marked by constant flows with a great diversity in sectors. Between 1993 and 2024, Wholesale Trade and Telecommunications have gathered 40% of the FID flows while another 40% is represented by the next 14 sectors. Out of the 88 economic sectors listed in Spain, 86 have had some degree of British FDI.
Geographically, British FDI has been concentrated in four main Spanish regions: Madrid (Region), Catalonia, Basque Country and Valencia (Region). In recent years, British investment has also reached other regions such as Andalusia the Balearics, Asturias and Castilla-La Mancha.
Madrid represents a 44% of the total British FDI during the first semester of 2024, comprising a variety of sectors that include Telecommunications, Wholesale Trade, Financial Services, Air Transport and Real Estate.
Andalusia represents a good example of regions with increasing British investment. The main sectors in this case are activities auxiliary to Financial Services, Building construction, Retail trade, Real Estate and Accommodation services.
British FDI accumulated flows per Spanish Region*
(% for the total period)
Source: Afi, Secretaría de Estado de Comercio. (*) For 2024 it includes up to July.
Projects for 2025
A large majority of British companies with FDI in Spain interviewed for a report made for the British Chamber of Commerce in Spain have a very positive outlook on the current business and economic climate, considering that prospects for the Spanish economy in 2025 will either improve or remain stable and that there will be an increase (5-10%) in British investment in Spain with regard to 2024.
This perception is justified since opportunities are abundant both in the regions where British investment has traditionally taken place as in less explored and regions that offer less obvious but very real options for growth and expansion.
As examples, Madrid has become a success phenomenon with ongoing opportunities to enter the market or increase market share and regions like Castilla-La Mancha, Aragon or Extremadura, not too populated but with great potential to do business with are worthwhile exploring in 2025.
Having insider’s knowledge about how to access these opportunities and how to close deals is more important than ever. The assistance of an expert in Spain is invaluable to be successful in your pursuits. And this is where Spain-UK Business Desk can assist.
We will help you navigate every aspect of your business venture in Spain: in addition to providing assistance in identifying the right projects and the right leads for you, we will guide you through the differences and idiosyncrasies of each of the Spanish region and will find the right professional or institution to advise on legal or economic matters when necessary.
Whether you already have a Spanish base or are looking to establish a business in Spain, we can support you through our comprehensive services and the projects that we’ll be pursuing in 2025, based on our clients’ requirements and the sectors our research shows present the most opportunities for establishing or expanding business.
Our business projects for 2025 include prominent sectors suitable for British investment or sourcing products or services in Spain such as: Tourism & HORECA, Food & Drink, Building & Architecture, Manufacturing Industries, Medical, Pharmaceutical, Digital & Information Technology, Finance and Education.
Besides the Region of Madrid and those where our clients have existing ventures, we will be actively promoting business projects in Aragon, Valencia (Region), Castilla-La Mancha, Andalusia and Extremadura.
Excited? We certainly are!
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