Foreign Subsidiaries Account For 10% Of Employment In Spain

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The number of companies with foreign parent companies in Spain amounts to 19,675, according to the study carried out by Informa D&B (a subsidiary company of Cesce), leader in the provision of Commercial, Financial, Sectorial and Marketing Information. This figure represents only 1.38% of the country’s business network as a whole, but they sell more than 215,000 million euros, 17% of the total turnover.

In terms of the number of jobs, companies with foreign shareholders employ 602,806 people, more than 10% of the total. It is also true that they have a higher proportion of large companies*, 8% of the total, compared with 2% for this size amongst Spanish companies. Ten percent are medium-sized companies, 17 percent are small companies and 65 percent are microenterprises.

Nathalie Gianese, Director of Research at Informa D&B, points out that “the number of foreign subsidiaries in Spain has grown since before the pandemic. At the end of 2019 there were 18,698, 1.2% of the total, while in October 2021 there were 19,675, representing 1.4%”.

The countries with the highest number of subsidiaries in Spain are European: Germany, 13 %, the Netherlands, 12 %, and the United Kingdom, with almost 12 %. However, French subsidiaries have the highest turnover, 19%, followed by Luxembourg with 15% and the Netherlands with almost 13%.

Foreign subsidiaries have a lower credit risk than Spanish subsidiaries, 72% have a low or medium-low risk, compared to 65.5% of Spanish subsidiaries. In a high risk situation we find 7% of companies with foreign capital and 11% of Spanish companies.

They are mainly located in Madrid and Catalonia

Madrid and Catalonia are the preferred autonomous regions for companies with foreign shareholders to locate in, with 40% and 28% each. The next is Andalusia with 9 %.

In terms of sales, Madrid and Catalonia again account for the largest share, 51% and 21% of the total turnover of foreign companies, respectively. In this case, Aragon comes third. Foreign subsidiaries located in the Aragonese region account for almost 6% of the turnover of these companies as a whole.

Trade and construction and real estate activities account for the largest number of foreign subsidiaries

By sector, 24.5% of foreign affiliates are engaged in commerce, and almost 19% in construction and real estate activities. Trade has a greater weight amongst companies with foreign shareholders than among Spanish companies, as do Industry, Mining, Energy, Communications, Financial and Business services.

The companies dedicated to commercial activities account for the highest sales, 39% of the total. These are followed by industrial activities, which account for 36%, and those dedicated to financial intermediation, which account for 6%.

*The size of the companies is calculated from a Data Insight exclusive to Informa D&B that takes into account the recommendations of the European Commission that define the size of companies based on the number of employees and financial limits.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.