www.circulodeempresarios.org

Foreign companies in Spain According to the most recent report Foreign Multinationals in Spain, in 2013 the number of foreign affiliates was 10,722 (34.4% of Spanish large-sized companies).

Taxes A Spanish worker dedicates an average of 180 days of salary each year to pay direct and indirect taxes, principally through Social Security contributions*(102 days) and IRPF (personal income tax) (37 days).

In constant terms, workers dedicate 18 years of their working life paying taxes

Competitiveness rankings According to the Global Manufacturing Compe-titiveness Index (Deloitte), the three leading countries in manufacturing competitive-ness are China, the USA and Germany. Of 40 countries analyzed, Spain was ranked number 25 (down two positions since 2013).

By Autonomous Communities, the three with the greatest tax burden are:

• Catalonia• Castilla –La Mancha• Cantabria

For its part, in the 2016 IMD World Competi-tiveness Scoreboard, of 61 countries ranked, Spain is in position 34 (it was 37th in 2015). The list is headed by Hong Kong, Switzer-land and the USA. This year there is a nota-ble rise in Ireland and The Netherlands to reach the top 10: they rose 9 and 7 positions respectively.

186

37

102

25 11

5Days of salary dedicated to pay taxes

Free taxes

Personal taxes

Social Security contributions

VAT

Especial taxes

OthersSource: Civismo, 2016

Ranking 2016 2020

1º China US2º US China3º Germany Germany4º Japan Japan5º South Korea India6º UK South korea7º Taiwan Mexico8º Mexico UK9º Canada Taiwan

10º Singapore Canada...25º Spain ...27º Spain

Global Manufacturing

27-jun.28-jun.28-jun.28-jun.

29-jun.29-jun.29-jun.29-jun.29-jun.29-jun.29-jun.

30-jun.01-jul.01-jul.

02-jul.02-jul.

04-jul.

La RiojaCanarias

AragónMurcia

País …AsturiasBalearesCyLeónExtrem…Galicia

MadridNavarra

ValenciaAndalu…Cantab…

CLMCataluña

Date of ending tax payments

Source: Civismo, 2016

Ranking 2015 2016

1º US Hong-Kong 12º Hong-Kong Switzerland 23º Singapore US 24º Switzerland Singapore 15º Canada Sweden 46º Luxembourg Denmark 27º Norway Ireland 98º Denmark Netherlands 79º Sweeden Norway 2

10º Germany Canada 5..37º Spain ..34º Spain 3

World Competitiveness Scoreboard

Así está… June 2016

The company

Top 4 with the greatest number of companies in Spain

Regional manufacturing clusters

1st 2nd 3rd 4th

Source: Círculo de Empresarios based on Multinacionales Marca España ,2016

* ForecastSource: Deloitte, 2016

Source: World Competitiveness Scoreboard, 2016

8 in the top 10

FOREIGN COMPANIES

PERSONNEL COSTS

22,4%

NATIONAL TURNOVER

28%

GROSS INVESTMENT

25,2%

EMPLOYMENT 2,7 millon

EXPORTS

40%

SOCIAL SECURITY INCOME

19,5%

Foreign companies contribution

Top 3 with the greatest contribution to employment

1st 2nd 3rd

23.7% 14.3% 13.5%

16,9 % 14,2% 11.3% 9.6%

*

‘Así está…The company’, a publication of the Círculo de Empresarios produced by its Department of the Economy, contains information and opinion from reliable sources. However the Círculo de Empresarios does not guarantee its accuracy and does not take responsibility for any errors or omissions. This document is merely informative. As a result, the Círculo de Empresarios is not responsible for any uses that may be made of the publication. The opinions and estimates of the Department can be modified without any warning.

www.circulodeempresarios.org

Quantitative Easing (QE) ECB

Following the announcement in March of the program by the European Central Bank for corporate bonds, the issuance of this kind of debt by the companies has grown 80% with respect to the same period of the previous year. In addition, the profitability of investment grade debt has dropped by 100 basic points.

Financial Markets The uncertainty over the Brexit matter has generated some strong volatility and made “safe” investments (gold, German bonds...) more attractive. For the first time ever, the profitability of 10-year German debt is negative and joins the more than 6.4 trillion euros of European debt in circulation with negative interest rates (Bloomberg).

Energy investment and supply The U. S. Energy Information Administra-tion (EIA) estimates that in May the offer of crude oil fell by 3.6 million barrels with regard to the previous month, principally because of the fires in the oil sands in Al-berta (Canada) and the attacks on petro-leum infrastructures in Nigeria.**

Labour absenteeism According to Adecco, in 2015 absenteeism from work rose in Spain for the second consecutive year to 4.7% (4.4% the pre-vious year). The direct cost for the compa-nies was 3,857 million euros, and 5,132 mi-llion euros for Social Security. Finally, op-portunity costs in terms of goods and servi-ces production rose to 52,387 million euros.

According to Bloomberg, capital expendture in the energy and industrial sectors in the US will drop by 30% and 24% respectively, because of the decline in profits caused by low petroleum prices. Nevertheless, the price of crude oil has risen 80% since the minimums registered in February.

-400 -200 0 200 400 600 800

Kuwait

Brazil

Ghana

Argentina

Colombia

Libia

Iraq

Nigeria

Canada

Month- over- month change in global oil supply disruptionsThousand barrels per day (Apr-May)

9,6

35,255,2

ECB corporate sector securities eligibility%

AAA-AA

A

BBB

Source:Caixabank Research, 2016

1000

1050

1100

1150

1200

1250

1300

1350

-0,1

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

Haven assets 1 Jan-17 Jun 2016

Germany 10 years debt (left axis) Gold (right axis)%$

20

25

30

35

40

45

50

55

WTI prices $

4,9

4,1

4,7

3,5

3,7

3,9

4,1

4,3

4,5

4,7

4,9

5,1

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Spanish Labour Absenteeism%

Tendency change

By grade... By sector...

Source: Círculo de Empresarios based on Investing, 2016

Source: Círculo de Empresarios based on EIA, 2016

Increased disruptions

Reduced disruptions

Source: Círculo de Empresarios based on EIA, 2016 * Disputes or conflicts accounted 90% of unplanned disruptions for the first 5 months in 2016

* Spanish 10y government yield: 1.5 % (22/06/2016)

44

12

23

11

10Consumption

Industry

Utilities

Financial

Energy