Catalonia: first region in mainland Europe to continuously attract foreign investment

BUSINESS

The Catalan Government denies the political process is causing companies to leave Catalonia, citing a 281% rise in foreign investment

During the first half of 2015, Catalonia attracted over 1.9 billion euros in foreign investment

event_note Press Release

BUSINESS

The Catalan Government denies the political process is causing companies to leave Catalonia, citing a 281% rise in foreign investment

During the first half of 2015, Catalonia attracted over 1.9 billion euros in foreign investment

The Minister for Business and Labour notes that the push for national sovereignty has no more bearing on companies choosing to move their tax base outside of Catalonia, than other factors endogenous to the economic context. In this regard, there are more companies exiting Madrid than firms leaving Catalonia.
Relocations from Madrid (red) and Catalonia (blue)
Source: Axesor
The Minister of Business and Employment, Felip Puig, has denied that companies are withdrawing from Catalonia or that they are moving their tax base to other parts of the Spanish state as a result of the Catalan political process. In this regard, Puig assured that the causes of relocation are multiple, noting that many of the companies that have moved their financial headquarters have maintained their productive units, which are those that create the most jobs, in Catalonia.
 
Minister Puig recalled that in 2014 a total of 987 companies moved their tax base away from Catalonia; however, during the same period the Community of Madrid had almost 1,400 firms being forced to relocate their financial headquarters as a result of the economic turmoil. Moreover, in 2014, companies leaving Catalonia accounted for only 0.38 per cent of all Catalan firms, while in Madrid this figure almost doubled (0.66%). Given these figures, the Minister questioned the reasons for more than a thousand companies abandoning the Spanish capital region where, incidentally, “there is no political process for sovereignty underway”, Puig noted. “Why is the focus on the companies that have moved their financial headquarters from Catalonia and not on those that do so in Madrid?" he asked.
 
Consequently, Puig considered that the claims that some Catalan companies are leaving the region because of the Catalan political process respond only to an “orchestrated campaign to induce fear as a result of an important political debate” among companies, investors and the citizens of Catalonia. According to the Minister, this campaign is part of a broader and more comprehensive strategy, and that “these distorted reports are easily rebutted with objective data”.
 
In this regard, Puig affirmed that the vast majority of firms, especially multinational companies, ignore this type of biased information. In fact, Catalonia is performing very well in attracting foreign investment. During the first half of 2015, Catalonia attracted 1.959 billion euros, which represents a remarkable increase of 281.2 per cent in comparison to the same period of last year, when investment amounted to 515 million euros. Catalonia is therefore an increasingly attractive market for investors, as shown by the prestigious database FDI Markets, which states that since 2011 Catalonia is the first region in mainland Europe to continuously attract investment. Given this evidence, the Minister affirmed that “the number of new companies being created in Catalonia is increasing, foreign investment is rising and we are winning the battle against unemployment”.
 
Minister Felip Puig also admitted that differences in taxation can make some autonomous territories more attractive than others, leading to firms establishing themselves in other regions. For this reason, Puig supports the idea of a “more favourable tax policy” in Catalonia to make the Catalan economy more attractive. However, he noted that the “financial suffocation” which the central government submits Catalonia to is making it very difficult for the Catalan Government to make changes in this area.

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Attached files

Fiscal residence data (CAT)

Fiscal residence data (CAT)
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