Successfully investing in Spain

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​​​​​​​last updated on 6 October 2025 | reading time approx. 6 minutes

 

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How would you assess the current economic situation in Spain?

The coronavirus pandemic led to one of the biggest slumps in the Spanish economy in 2020. Although Spain recovered much later than other countries after the coronavirus crisis, surprisingly it has rebounded all the more strongly. 

Spain is currently the fastest-growing country in Europe, with GDP growth of an impressive 3.2 percent in 2024 (Source: INE, Instituto Nacional de Estadísticas), which exceeded all expectations. For 2025, the Organisation for Economic Cooperation and Development (OECD) forecasts growth of 2.3 percent for Spain and maintains for 2026 growth of 2 percent. The Autonomous Communities with the highest growth within Spain in 2024 were the Balearic Islands (4.2 percent) and Murcia (4.1 percent). However, the Autonomous Community of Madrid (Comunidad de Madrid) remains at the top of the list, accounting for 19.6 percent of national GDP.

Against this backdrop, the current economic situation in Spain is considered robust and growth orientated. This is based on a stable labour market, investment in renewable energies and infrastructure, and a growing service sector, especially tourism. Not to be forgotten is the aid provided to Spain under the EU's Next Generation programme. The country has been very good at deploying and utilising these funds.
   

How would you describe the investment climate in Spain? Which sectors offer greatest potential?

The tourism and hotel industry is certainly the sector that will continue to drive Spain's growth. This mainly concerns international tourism, but domestic tourism has also gained in importance. However, Spain's dependence on tourism, which accounted for 13.2 percentof national GDP in 2024, does pose certain risks. There is no end in sight to the boom in tourism. In the long term, drought and water shortages will cause problems for tourism, but also for agriculture. 

Other sectors that continue to offer interesting potential include: 

  • Renewable energies: The current government is heavily promoting the expansion of green energy sources.
  • Digitalisation and IT: This industry is particularly supported by numerous projects in the areas of smart cities, e-government and digital infrastructure, which are funded by the EU. 
  • Healthcare and biotechnology: Spain's ageing population and investment in research are making this sector increasingly attractive.
  • Logistics: Investment in rail and port infrastructure in Spain is growing. This positions Spain as a logistics hub for the future between Europe, Africa and Latin America.​
   

What challenges do German companies face during their business ventures into Spain?

The decisive factor for success or failure is above all the careful selection of employees and, more specifically, the managers of Spanish branches. If you are focusing on Spain as a sales market, it is advisable to bring local expertise into your teams. Business relationships in Spain tend to be personal and social, and negotiation styles and decision-making processes are different. Even though many Spaniards speak English or perhaps even German, Spanish is recommended for everyday business.

Despite digitalisation, bureaucracy and administrative processes in Spain are sometimes complex and therefore quite slow in some areas. Permits, registrations and tax procedures can be time consuming. Some of the autonomous Communities have their own regulations, which can lead to regional differences in business practices. 

It is advisable to be informed about the labour regulations for the various industries. In many companies either it is generally required, or once a certain number of employees is reached, an equal treatment plan (Plan de Igualdad), a protocol for the prevention of risks in the workplace (Prevención de Riesgos laborales), a protocol for the prevention of bullying/sexual harassment in the workplace and a remuneration register must be drafted. In addition, working hours must be recorded and a whistleblowing channel must be introduced.

In February 2025, the Spanish government under Prime Minister Pedro Sánchez decided to reduce the statutory working week from 40 to 37.5 hours with full pay compensation. However, the law has not yet come into force. The draft law has been passed by the cabinet and released for public consultation but still needs to be confirmed by parliament. According to the current government, which is made up of a coalition of socialists (PSOE), the left-wing alliance SUMAR, the Catalan parties ERC and JUNTS, as well as PNV, the Basque nationalist party, and BILDU a Basque socialist electoral alliance, this new law should be fully implemented by the end of 2025 at the latest in order to increase productivity and improve quality of life, as desired by the current Ministry of Labour.

The current statutory minimum wage in Spain has been set at 1148 Euro gross per month for 2025, payable in 14 instalments per year.
   

Are there any new developments in the Spanish legal system that are also relevant for German companies?​

On 3 April 2025, the new law Ley Orgánica 1/2025, de 2 de enero came into force in Spain, introducing comprehensive reforms to improve the efficiency of the public justice service. These reforms aim to modernise the Spanish justice system and reduce the workload of the courts.

Key points of the law:

  1. Alternative dispute resolution (MASC): The law obliges parties to use alternative dispute resolution methods such as mediation, conciliation and expert opinions before initiating civil and commercial proceedings. This is intended to relieve the burden on the courts and make access to justice more efficient.
  2. Accelerated eviction proceedings: In cases of squatting by so-called ‘ocupas’ (= squatters), evictions will be accelerated in order to protect property rights and shorten the duration of illegal occupation.
  3. New courts of first instance: The reform provides for the creation of new courts of first instance to replace the existing single-judge and first-instance courts. This is intended to increase the efficiency and speed of the administration of justice.
  4. Abolition of the ”Golden Visa”: The possibility of obtaining a visa through the purchase of real estate or investments will be abolished. This is intended to stabilise the real estate market and reduce speculative investments.

Impact on German companies: 

The new law brings a number of changes for German companies and citizens who do business or wish to invest in Spain. The obligation to use alternative dispute resolution methods could lead to faster and more economical solutions in legal disputes. In addition, the abolition of the “Golden Visa” could make the real estate market less attractive for foreign investors. Overall, the reform aims to modernise the Spanish judicial system and make it more efficient, which could also have a positive impact on international business relations in the long term.

How do you see spain developing?​

Spain's economic development is expected to remain stable and growth orientated in the coming years, with a slight downward trend. 

According to the OECD, GDP growth in Spain will be around 2.3 percent in 2025 and 2.0 percent in 2026. Growth will be driven mainly by private consumption, supported by a strong labour market, rising real incomes and accumulated savings by private households. In our view, investment will continue to increase due to low financing costs and the implementation of the EU recovery plan. 

Tourism and other services will continue to be the main contributors to export growth. The main long-term challenges are high unemployment (10.9 percent in March 2025) and youth unemployment (26.6 percent in March 2025), which point to fundamental problems in the labour market for young people, as well as existing regional imbalances.

Further challenges will arise from political developments in the country. The current coalition and minority government described above is facing growing allegations of corruption, which are undermining confidence in the government. Around 20 percent of the current government's legislative initiatives failed in 2024, and the budget for 2025 has not yet been presented or adopted. Political polarisation is increasing. Regional tensions have improved but remain a sensitive issue. Despite growing political tensions, the economy is resilient and above the EU average.

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