Madrid is not only the capital of Spain, or the seat of the main governmental, legislative and judicial institutions, or the essential nucleus of infrastructures and connections between Spain and Europe, Asia, North America and South America. Madrid is also the most important Spanish business hub, and one of the most important European business hubs, after London, Paris and Frankfurt, although about to surpass the latter and move to third place, according to the thirty-first edition of the Global Financial Centres Index (GFCI), the world’s most authoritative comparison of future competitiveness and rankings of the world’s leading financial centres, published by Z/Yen Partners last March, 24, 2022, in collaboration with the China Development Institute.
This set of circumstances explains in part -but only in part, as we will see later- the reason why Madrid received 20,944 million euros of foreign investments in 2021, equivalent to 72.8% of the total foreign investments received in Spain, with an increase of 14.6% compared to the previous year. Among these foreign investments, it is worth mentioning, even if only by way of example, the landing or expansion of numerous multinationals, such as IBM, Oracle, Tencent, J. Safra Sarasin, Lab126, Liberty Mutual Group, JP Morgan, BlueBay, American Express or Moderna. All of them are direct or indirect part of the group of 16,000 new companies established in Madrid last year, the largest in the last decade, consolidating Madrid as a very atractive financial hub for all kind of businesses.
In addition to the general circumstances that I have just mentioned, and which have undoubtedly contributed to making Madrid an international financial centre of the first order, there are other particular elements that have also contributed to doing the same. In particular, all those related to regulatory frameworks, fiscal politics or administrative burdens, which have been subjected to a broad liberalizing process in recent years. A liberalizing process that is being promoted, as recently indicated by the Counselor of Economy, Finance and Employment of the Autonomous Community of Madrid, Mr. Javier Fernánder-Lasquetty, under the policy “Less taxes and fewer laws”, in order to encourage investment, generate employment and reactivate the economy.
For instance, as far as regulatory frameworks are concerned, according to an open market bill aproved by the regional government, but still to be discussed by the regional parliament, if a company from the rest of Spain wants to operate in Madrid it will not need an additional permit to that it already owns. In the field of fiscal politics, it should be noted that Madrid is the Spanish region where the least taxes are paid, either in personal income tax, estate tax or succession and donation taxes. And with regard to administrative burdens, a bill for urgent measures to promote economic activity and modernize the administration foresees action on 31 laws, 3 legislative decrees and 2 decrees, to reduce those administrative burdens and save taxpayers more than 1,000,000 euros.
Having said that, which sectors present the greatest business opportunities and can be attractive to a foreign investor?. If we go to the Madrid Recovery and Resilience Strategy, we observe that it contemplates 214 investments and 28 reforms for the development of projects related to sustainable mobility, ecological energy and health strengthening. Other investments cover projects oriented to education and employment, business digitization, communication 5G, logistics and airport services, biotecnology and robotics. And last but not least, there are two other sectors that must also be taken into account, such as tourism -a large number of hotels are for sale right now, both on the coast and inland- and real estate -linked or not to the request for a Golden Visa-.