Abstract
Spain is located in southwestern Europe and its capital city is Madrid. The main religion is Spain is Christianity. The country uses Euros as its currency for transactions. The country has a rich culture that has made the country be the leading tourist destination globally. In doing business, the Spaniards prefer to engage in business with people they know and trust. They adhere strictly to time and businesses are contacted formally. Spain has a parliamentary monarchy system, which is embedded in the constitution that was enacted in 1978. The government and political system is stable and provides an ample business environment for both foreign and home investors. The economic status of the country is established which has attracted many people to invest in the country. Service industry is the major business activity in the country. Some improvements need to be made to enhance the employment situation. Additionally, the cost of renting offices should be reduced. Other needed changes are improvement legal security and labor flexibility.
Introduction
Spain is located in southwestern Europe. The greater part of this country is a country standing at the Atlantic crossroad and the Mediterranean Sea, Africa and Europe. Spain also borders the Biscay Bay, France, The Mountains of Pyrenees, Andorra and Portugal. It also borders the semi-autonomous overseas British territory known as Gibraltar . Spain’s population stands at 470,150,819. The country uses Euros as its currency for transactions. The capital city of Spain is Madrid. The language commonly used is Spanish though many businesspersons speak English. The main religion is Spain is Christianity. Life expectancy for men is 79 years while for women it is 85years. The current head of state is King Juan Carlos I and the prime minister is Mariano Rajoy. Through conquest and exploration turned to be the most powerful country in Europe in the 16th Century. This resulted from the huge amounts of wealth, which came by virtue of being in America. The powerful world empire of Spain then, yielded command on England seas. The country however failed to embrace industrial revolution and mercantile, and this made it to fall behind Germany, France, and England both politically and economically. Spain joined the European Union, then known as the European Community, in January 1986. The service sector dominates the Spain economy, with the tourist sector being the most significant as Spain is the most popular destination for tourists globally. This paper will highlight various aspects of Spain like culture, Political and Legal Environment and Evolution of the Political System, Economic Environment and country attractiveness (Hinkelman 21).
Culture
The basis of social culture is the family in Spain, and it comprises of both the extended and the nuclear family. Currently, it is less common than previously when family members worked in businesses, since personal preferences are important and college education was perceived to be general. Currently, networks within families are less tight. The word used for male dominance is machismo, and the old men culture that created it has spectacularly changed. Spain has been a significantly equalitarian with the birth rate being among the lowest in Britain, women have been engaged in building the nation and in academic work. Most of the Spaniards are mostly Roman Catholics, though various religious beliefs have been accepted. Various religious groups have coexisted like Christians, Jews, and Muslims. It is worth noting that some traditions resemble cultural events as opposed to religious events. There is a holy week during which many procession participants put on black peaked hats as a penitent sign and walk barefooted carrying a form of burden.
After establishing a relationship men usually embrace and pat each other on shoulders, with female friends kissing each other on cheeks. When visiting a Spanish family one should come with wine, cakes, pastries, chocolates, brandy or flowers; in the event that the family has children, one should go with a small gift. Spanish would wish doing business with people, they trust and know. Face to face contact is most appreciated that telephone or written communication. Spaniards engage in formal communication following the laid down procedures. To meet some, there should be an appointment which ought to be confirmed a week before the meeting. The business dress is stylish but still conservative. The Spaniards attach value to time in whatever they do and value personal space and privacy. The popular musical form and dance in Spain is Flamenco with the Cervantes' novel Don Quixote being the commonest ever written material from Spain. Spaniards love cinema and films directed by prominent directors like Pedro Almodovar draw significant crowds.
Political and Legal Environment and Evolution of the Political System
Spain had a transformation from a totalitarian, rigid and highly centralized administration into liberal and pluralistic parliamentary democracy that had a considerable regional autonomy. This was achieved without a revolution or civil war and at the time when there was an unfavorable economic condition. The institutions put in place under the novel democratic administration, were based on the decentralization and modernization principles. The Constitution enacted in 1978, which was enjoying a considerable support established Spain as a democratic state under the rule of law. Spain has a parliamentary monarchy government, which has political power centered on Spanish Parliament. Among the striking features of the new government system of Spain is power devolution and regions responsibility. The changes in administration solved the concern of long standing tensions between the periphery and the center in Spain. These changes in the administration have caused significant improvements in the economy. The devolved government system has engaged in policymaking practices, which affect the businesses in the regions. The constitution enacted in 1978 has addressed conflicts experienced previously. The legal system is dependable as it is independent from the executive.
Economic Environment
The GDP of Spain was in 2012 estimated at $1.407 trillion, while in 2011 it was $1.429 trillion and $1.423 trillion in 2010. The GDP par capital of Spain in 2012 was $30,400, while in 2011, it was $31,000, and in 2010, it was $30,900. The GDP real growth rate was -1.5% in 2012 while in 2011, it was 2011 and in 2010, it was at -0.3%. Considering different sectors, the agriculture sector contributed 3.3% to the GPD, while the industry sector contributed to 24.2% and the service industry contributing to 72.6% of the GDP (Economic Intelligence Unit, 6).
The household income or consumption by percentage share has the lowest ratio as being 10%:2.6% and the highest being 10%:26.6%. The budget revenues are at $485.1 billion while the expenditures are at $584.3 billion. The exports of the country in 2012 were $303.8 billion while in 2011 were $309.6 billion. The main export commodities are motor vehicles, machinery, foodstuffs, medicines, pharmaceuticals and other consumer goods. On the other hand, the imports were $322.7 billion in 2012 while in 2011 they were $364.9 billion. The main imports are fuels, machinery and equipment, chemicals, foodstuffs and semi-finished goods, medical control and measuring instruments and consumer goods. The exchange rates of Euros per US dollar was at 0.7838 in 2012, 0.7185 in 2011, 0.755 in 2010, 0.7198 in 2009, and 0.6827 in 2008 approximately. The current account balance stood at -$18.8 billion in 2012 and -$52.28 billion in 2011. In 2012 the inflation rate was 2.5% while in 2011 it was 3.1%. The stock of direct foreign investment at home was $663.1 billion as at 31 December 2012. The stock of direct foreign investment abroad was $739.2 billion as at 31 December 2012 (Factbook).
Spain Attractiveness Analysis
Spain is a sound commercial environment to conduct business. Spain is an attractive country for foreign investors due to its generally favorable environment to conduct business. The infrastructure is sound, the labor force is high skilled and professional, it has dynamic domestic market and has conditions which attract research and development activities and talent. Nonetheless, there are areas that need to be improved. These are costs of renting offices, legal security, flexibility in labor and unemployment. Spain is home a large number of multinational companies, and this implies that it is high up the FDI stock rankings (Economic Intelligence Unit 4). It has been ranked in fifth position in comparative analysis. Additionally Spain has been ranked number six in attraction of FDI projects with high value added activities. The fiscal situation is favorable as the rate of inflation is significantly low.
Conclusions/Recommendations
Spain is a country with various aspects, which would attract investors to conduct business. The country is politically stable with firm institutions, which can help to resolve any disputes. The country is the top tourist attraction destination, which implies it is a rich culture. These aspects make the country a promising destination to export or invest. Irrespective of the many positive aspects of this country, other aspects need rectification to enhance business environment conditions (Invest in Spain). The unemployment rates should be improved; other factors requiring improvement are legal security, labor flexibility and cost of renting business premises.
Works cited
Hinkelman, E. G. ‘Passport Spain.; Novato, California: World Trade Press. (2001).
Invest in Spain, ‘Doing Business in Spain’ 2010. Web. Web. April 16, 2013.
Invest in Spain, ‘Spain, Seventh in the Foreign Investment Attractiveness Ranking for Developed and Emerging Countries’. March 2, 2011. Web. April 16, 2013.
Factbook, Web. April 16, 2013,
Economic Intelligence Unit, ‘Country Report Spain Resource’ London: 20 Cabot Square, (2013)
