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Legal Advice & Company Internationalisation Albia Capital Bilbao 12 de diciembre 2012 FLORENCE (ITALY) 58th Congress October 29 – November 2, 2014 Foreign Investment Commission ASECOEX Colon de Larreategui, 35 STATE SUBSIDIES 48009 Bilbao (SPAIN) “The EuroVegas case” Tel. +(34) 944 23 75 42 “Withdrawl of Solar Plant Subisidies” [email protected] www.asecoex.com Mr. Txaber Fernandez Beldarrain INDEX 1. FDI in Spain 2. Ease-of-doing Business Index 3. State aid: EU Regulations 4. Spanish Regional Aid Map 2014-2020 5. Case 1; EUROVEGAS, or “Welcome Mr. Marshall” 6. Case 2; Withdrawal of Solar Plants Subsidies www.asecoex.com 1. FDI in Spain Spain is the 9th largest recipient of FDI worldwide (FDI Regulatory Restrictiveness Index) Gross FDI up 8.8% in 2013 to €15.8 billion 25 20 Greenfield 15 Acquisitions 10 TOTAL 5 0 2009 2010 2011 2012 2013 One of the leading global economic powers. Domestic market: 47 million population plus additional demands of 57.7 million tourists. Geostrategic position. Interesting business opportunities. Rapid growth in international trade and foreign investments in recent years has made Spain the sixth most open economy to FDI. www.asecoex.com 2. Ease-of-doing Business Index Spain dropped to 52nd in the 2014 Index from 46th position on the 2013 index. Source Doing Business Reports. Word Bank 2014 Index Ranking 2013 Index Ranking Procedures Days Doing business (overall) 52 46 Starting a business 142 136 10 23 Dealing with construction permits 98 91 9 230 Registering property 60 56 5 13 Getting credit 55 52 Protecting Investors 98 95 Enforcing contracts 59 58 Paying taxes 67 33 SPAIN OECD Average Payments per year 8 12 Time (hours per year) 167 175 Total tax rate (% profit) 58,6 41,3 www.asecoex.com 3. State aid: EU Regulations In accordance with Art. 107 Article 107 Treaty on the Functioning of the European Union (TFEU , the following States Aids are compatible with the internal market: a) aid to promote the economic development of areas where the standard of living is abnormally low; SPAIN; 26 % unemployment GDP per capita 93 % below EU General Average (Sweden 123 %) b) aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State; c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest. www.asecoex.com 4. Spanish Regional Aid Map 20142020 The designated areas have: 1. A GDP per capita below 75% of the EU average. 2. A total population of 32.25 M (68.59 % of the population of Spain). Levels of aid that can be granted to regional investment projects carried out 1. By large enterprises; between 10% and 35% of total investment costs. 2. By medium sized companies; the percentages can be increased 10%. 3. By small enterprises; the percentage can be increased 20%. www.asecoex.com 5. Case 1; EUROVEGAS 2013 “Welcome Mr. Marshall” Authorized entry for minors under 18 years and Gambling Addicts FORBIDDEN Against Spanish & EU law www.asecoex.com THE MORE YOU ASK FOR, THE LESS YOU GET 6. Case 2; Withdrawl of Solar Plant Subisidies Implemt,Solar Plants Subsidy Scheme Modification of the Subsidy Scheme Investors: • National • Foreign Invest. 2004 Supreme Court Decisions •Reasonable return rate (7,5%) •Retroactive effect 2010 World Bank ICSID Ratifying the legality of the new scheme and efects. 2012/13 International Funds: • Hasdar (Abu Dhabi) • RREEF Infraestructure 2014 Direct Effects Spanish solar PV plants have suffered an average 30 to 40 per cent cut in income. More than half of Spain’s solar “photovoltaic” companies have gone bankrupt. Discrimination due to nationality could occur if the award rendered by ICSID is in favor of international funds. If that were the case, what could Spanish investors do? www.asecoex.com Txaber Fernandez Beldarrain Tel.: + 34 944 23 75 42 www.asecoex.com