Contents List of Contributors Foreword Map 1: Spain and its neighbours Map 2: Infrastructure of Spain vııı xii xiv xvi Part 1: Economic and Business Conditions 1.1 A Brief History ~3 Juan Jose Berbel, Inuestment Promotiorı Bureau, SEPi 1.2 The System of National Government and the Political Party Structure 7 Juarı Jose Berbel, Inoestment Promotiorı Bureau, SEPi 1.3 The System of Autonomous Regiorıs 12 Juarı Jose Berbel, Inuestmeni Promoıion Bureau, SEPi 1.4 Economic Performance 16 Maraariıa Lainez, Iruıestment . Promotioıı Bureau, SEPi; sıatistics cornpiled in collaborauotı unth. Maiıe Yusuı, Inuestmeni Promotion. Bureau, SEPi 1.5 The Internationalisation of the Spanish Economy 23 Marqarita Lainez, Inoestmeni Promotiorı Bureau; SEPi J .6 Competitiveness: The Corporate Perspective 2D Juarı Jose Berbel, Inuesırncnt Promoı.ion. Bureau, SEPi l. 7 The Impact of the Euro 4 l Margo:rila Lainez, Inoestrneıu. Promotum. Bureau, SEPi; staf; istics comşnled in collaborıu.ıoıı ıoülı Maiıe Yusia, Inuestment Promotion Bureııu, SEPi 1.8 Business Culture 46 Elena Liquete-Col.l.is arul Chris Breıosier; Crcır?fielri Sr:huol ofManagemenl Part 2: Business Practice and Development 2.1 The Structure of lndustry 5; 3 Professor Mikel. Nouarro, ESTE-Uniıwrsülarl de Deusı.o 2.2 State-Owned Enterprises and Privaıisation !58 Joaquim Verges, Department rd Business Er:onmnü:s, Urdvr, rsüo.t. Authnorruı rle Barc:elmuı. iv Contents 2.3 The Role of SMEs Bove Montero & Cia 2.4 The Labour Market Bove Montero & Cia 2.5 Personnel Recruitmcnt 77 Hay Consultinq 2.6 Investing in Spain 81 Calin P Blessley, Partner in charqe ofFiruınciai Advisory Services, Priceıoaterhousetloopers, Spain 2. 7 The Property Market 90 Jones Lang LaSaUe 2.8 The Retail Market 100 Elsie Fairbanks, Trade Partners UK, Business in Europe Section. cır: U..) 71 Part 3: Banking and Finance ; 3. 1 Thc l3anking Sector l 15 Carrnen Hernansame, HBVA, Research. Departrrıerü, Miulrut :3.2 The Role of the Banking Sector in Economic and 124 and Inclustrial Oevelopment Carrnen Hernansıuız, BBVA, Researclı Departrrıeni, Mrulrul. :3.~1 Raising Financc Ior Corporate Invcstnıcnt 128 Carrnen. Herncmsıuız, BBVA, Research. Deparl'ment, Moclrid. ; 3.4 Capital Markets 1 :M Carmen. J-Jernansruı, z, HBVA, Researclı Deprı, r/, 'm, ent, Maririd :3.5 Insurance 142 Carmen Hernansane, BBVA, Rasearctı Depar/, ment, Madrici Part 4: Legal lssues 4. l The Legal Systern 14D Ednarcio V Te, iero uru! Miriam, Ru:iz de /, a Pıu, rla, Estwiüı Leyal Aboqados y Asesores Fiscales - a mernberfirrrı qf Pr·icewaterhrıuseCoopers 4.2 Coınpany Fonnation 15D Ca.rlo« Ulecia and. Eduurclo V Tejero. Est'ıulüı Leyal, A/Jogados u Asesore« Fiscales - a 'rneuı.lıerfiı -rn of Pı"iceu; ater·houseCoopers 4.3 Disputes and Arbitration 1 72 Ju, an Anton'io Oueıms anrl Erl?, uırrlo V Tfdem, Est, urho Legal, Al>oqarlos :ıı Asesores Fisuı, /, es - rl 'll'W'rnlıer firrn rıI Prir:eııırıt, erlumseCıJ1ı7H-:rs ., L:_:~con_tents v - .. -~-, .. _J 4.4 Creating a Commercial Distribution Network 1 78 Mirıam Ruis: de la Prada. and Eduardo V Tejero, Estudio Legal Abogados y Asesores Fiscales - a member jirm. qfPricewat; erhonseCoopers 4.5 Compctition Law 183 Miriam Icuie de la Prada and Eduardo V Tejero, Estudio Legal Abogados y Asesores Fiscaies - a member jirm. ofPriceıvaterhmıseCoopers 4.6 Industrial and Intellcctual Property 190 Miriam. Ruie de la Prada and Eduardo V Tejero, Estudio Legal Abogados y Asesores Fiscales - a member firm. qfPriceıoaierhouseıloopers 4.7 Duties and Responsibilities of Company Directors 200 Arüonio J Padrô and Eduardo V Tejero, Estudio Legal Abogados y Asesores Fiscales - a memberjirm of PriceıvaterhmıseCoopers 4.8 Employment Law 210 Pilar Sierra and Eduardo V Tejero, Estudio Legal Abogados y Asesores Fiscales - a memberfirm qf PriceıvaterhouseCoopers Part 5: Accounting lssues 5.1 Accounting Principles and Requircments 227 Priceı, ıJalerhouseCooper·s 5.2 General Accounting 2'.32 PriceıvaterhmıseCoopers 5.3 Accounting Principles for Spccific Items - Balance Shcct 249 PriceıvaterhouseCoopers 5.4 Accountmg Principlcs for Specific Items - Incorne Staterncnt 267 PriceıvaterhonseCoopers 5.5 Compliancc with Intcrnational Accounting Standards 274 PriceıvaterhonseCoopers Part 6: Taxation 6.1 Corporatc Incomc Tax for Residents PriceıvaterhouseCoopers 6.2 Corporate Taxation for Non-Residents PriceıvaterhouseCoopers 6.3 Pcrsonal Incomc Tax Price'ıvaterhmıseCoopers 281 300 313 vi Contents 6.4 Miscellaneous Taxes PricewaterhouseCoopers 6.5 Local and Regional Taxes Priceıoaterhouseôoopers 6.6 Taxation: Infringernerıts and Penalties PricewaterhouseCoopers 320 328 334 Appendices l 2 3 4 5 6 7 Profiles of the Autonomous Regions Chambers of Commerce for Business, Industry and Shipping Spanish Chambers of Commerce and Industry Useful Addresses Sources of Economic and Business Information Retail Contacts Contributor Contact Details 336 352 355 384392 396 40ı Index Index of advertisers-414.