Competitive advantages for new international projects May 2008 BARCELONA, A GOOD INVESTMENT Ajuntament de BarcelonaPromoció Econòmica Internacional

Competitive advantages for new international projects

May 2008

BARCELONA, A GOOD INVESTMENT

Ajuntament de Barcelona Promoció Econòmica Internacional

- Barcelona, open and integrating city

- Economic motor of Spain and Europe

- Why Barcelona? 10 reasons for investing

- Promoció Econòmica offers you


- INDEX -

Barcelona, with its own personality:

• Long business and commercial tradition

• Multiple cultures and civilisations: cosmopolitism and identity

• Open, integrating character

More than 2000 years of history:

• Centre of international trade in the Mediterranean in the 13th-14th centuries

• Pioneering in the Industrial Revolution in Spain in the 19th century

• Motor of economic development in the 20th century


- BARCELONA, OPEN AND INTEGRATING CITY -

Population and surface area

Inhabitants (%) Area (km2) Density (inhab./km2)

Barcelona 1,605,602 100% 101 15,897

Metropolitan region 4,841,365 33.2% 3,236 1,496

Catalonia 7,134,697 22.5% 31,895 224

Spain 44,708,964 3.6% 505,988 88

Source: Barcelona City Hall and INE, January 2007

Foreign population (data January 2007):

250,789 people 15.6% of the inhabitants residing in the city

+50% with medium or higher studies

Average age: 32

In Barcelona there are communities of 150 nationalities, and particularly: 49% America: Ecuadorian, Peruvian, Bolivian, Colombian, Argentine 29% Europe: Italian, French, German, British 16% Asia: Chinese, Philippine, Japanese 7% Africa: Moroccan

Life expectancy, among the highest in the world (women: 84 / men: 77 )Births: 9.8 per thousand inhab. / Mortality: 10.1 per thousand inhab.


- BARCELONA, OPEN AND INTEGRATING CITY -

GDP data for Catalonia 2006: €195,280 million 3.9 % annual real, (forecast 2007: 3.4%)

Per capital GDP: €25,541 (EU-25: €21,741)

Total companies in Barcelona: 469,432 (+13% of the total for Spain)

Mercantile companies in Barcelona: 27,736 (19% of the total for Spain)

5th industrial concentration and 6th metropolitan concentration in Europe.

Economic capital of a territory with a highly diversified industrial and service fabric,

responsible for 19% of the Spanish GDP.

Barcelona exports (demarcation):

2006: €37,683 million, 13% annual (22.2% of the total of Spain)

1st quarter 2007: €20,083 million, 7.5% same period

26,500 Catalan companies internationalised, 12,000 of which export habitually (35%

of the total for Spain)


- ECONOMIC MOTOR OF SPAIN AND EUROPE-

GDP data for Barcelona (estimated 2005): +€55,000 million

Per capita GDP city of Barcelona (estimated 2005): €36,300

10 reasons for choosing Barcelona:

1 - PRIVILEGED GEOGRAPHICAL LOCATION AND ACCESS TO MARKETS

2 - DIVERSIFIED, DYNAMIC ECONOMY

3 - SUCCESSFUL FOREIGN INVESTMENT

4 - GOOD INFRASTRUCTURES

5 - GREAT FUTURE PROJECTS

6 - TALENTED HUMAN RESOURCES

7 - REGULATORY FRAMEWORK: FINANCIAL AID AND TAXATION

8 - RENEWED REAL ESTATE OFFER

9 - FIRST IN QUALITY OF LIFE

10- INTERNATIONAL POSITIONING AND WITNESSES


- WHY BARCELONA? 10 REASONS FOR INVESTING -

1.- PRIVILEGED GEOGRAPHICAL LOCATION AND ACCESS TO MARKETS


1.- PRIVILEGED GEOGRAPHICAL LOCATION AND ACCESS TO MARKETS

Access to markets from Barcelona:

- Metropolitan region: 4.7 million spread between 166 municipalities

- Euro region: 17 million consumers in Catalonia, Aragon, Valencia, Balearic Islands, Midi Pyrénées, Languedoc-Rousillon.

- Iberian peninsula: 55 million citizens

Door to Europe from the south

- Logistic point of exchanges in the Mediterranean, with preferential connections to Asia

- Preferential sea connections with Asia, on the route crossing the Suez canal

- Privileged link with Latin America due to the historical, cultural and economic bonds


2. – A DIVERSIFIED, DYNAMIC ECONOMY

The Barcelona area has a diversity of productive activities.It has a very powerful service sector in the city (76% of the Gross Added Value) and a considerable industrial base surrounding it (19% of the GAV).

Sectors of traditional industrial activities, present in Barcelona and important in Europe, responsible for more than 70% of the total industrial activity in Catalonia:

agri-foodstuff, chemical and pharmaceutical, cars, textile and publishing, amongst others

Advanced services, the service sector in Barcelona generates 75.7 % of the Gross Added Value of the city (only services to companies account for 21.7 % of the GAV of the total for Barcelona). Some examples of strategic activities and services for Barcelona:

services to companieslogistics and transport; medicine and health; design and fashion.

New strategic sectors, industries of the future with cluster dynamics in Barcelona aeronautics and space, information and communication technologies, media, life sciences, energy and environment.


2. – A DIVERSIFIED, DYNAMIC ECONOMY


Activity indicators Annual variations

1. Port 2.6 million containers (2007)3.0 million passengers (2007)

+12% (07/06)

2. Airport More than 33 million passengers (2007 +12% (07/06)

3. Tourism More than 7.2 million visitors (2007) +8% (07/06)

4. Real estate market Almost 400,000 m2 of contracted office space (2007) +7.5% (07/06)

5. Stock market 414,000 million euros contracted +35% (07/06)

6. Occupation /Unemployment

More than a million employment occupancies in the city;an employment rate below 7% (2007)

Stable unempl.Rate

7. Foreign investment More than 972 million euros (1st half 2007) +5.7% (same period07/06)

8. Exports More than 20,000 million euros (1st half 2007) +7.5% (same period07/06)

9. Company creation Almost 26,000 companies created (2006) +5.8% (06/05)

10. Fair activity More than 40,500 exhibitors and 3.5 million visitors(2007)

+20% with respectto 2005 *

10 indicators of economic dynamism in Barcelona

* Many important fairs are every two years so it is compared with the previous year with a similar calendar

3. – SUCCESSFUL FOREIGN INVESTMENT IN BARCELONA

Direct foreign investment in Catalonia:

2006: €2,521 million, 26.5 % of the total for Spain

1st quarter 2007: €972 million, 25.4% of the total for Spain

10 OECD countries responsible for 98% of all investment.

Main investors: Holland, Great Britain and France.

Barcelona, the most numerous, consolidated base of foreign companies in Spain

3,000 foreign companies have a productive presence in the Barcelona area.

Nearly 34% of foreign companies registered in the whole state have their head offices or

main activity in Catalonia and the Barcelona area concentrates 90% of this.

More than half of the Japanese, French, German, American, Italian and Dutch

companies of the whole of Spain are concentrated in Catalonia and 80% of these foreign

companies have been in the area for more than 10 years.

In Barcelona there are 400 North American companies, 705 French and 519 German,

amongst others


Results of the study 2007:

The foreign companies established in the Barcelona area are satisfied (97%) and continue to invest considerably.

60% of the companies in the Barcelona area for more than the last 10 years

From the foreign companies present in Barcelona more and more decisions are taken that affect group subsidiaries in Europe or Latin America.

Factors best evaluated in the Barcelona area for attracting direct foreign investment: the geographic location, the trained human resources at a reasonable price, the city with a high quality of life and powerful productive fabric.

3. – FOREIGN INVESTMENT: BAROMETER OF THE BARCELONA AREA


4. – INFRASTRUCTURES: THE AIRPORT


The extension in 2012:

- New satellite terminal

- Capacity for 70 million travellers / year

- Future cargo: 300,000 tons / year- High speed train connection

The current airport offers 900 flights a day with 90 companies covering 33 national, 32 internationals and 72 European destinations.

1st in Europe and 5th in the world in growth. 8th airport in Europe by volume of passengers

More than 30 million passengers in 2006, 33 million in 2007 (growth of over 12% a year)

The future airport: investment of 3,000 million euros in infrastructures and technology

The extension in 2008:

- New passenger terminal

-Capacity for 55 million travellers/year

- New intermodal cargo area.

- Airport city (offices + warehouses)

4.– INFRASTRUCTURES: THE CURRENT PORT

The first port in the peninsula in turnover volume and value of goods

Manages 23% of Spain’s foreign trade

Connected with 850 ports in the world, on 450 regular consolidated sea lines.

3 interior maritime-railway terminals to Toulouse, Zaragoza and Madrid

Being consolidated as a Short Sea Shipping platform (privileged transfer centre for direct

ocean lines).

Figures Barcelona Port 2006:

48 million tons of goods,

2.4 million containers,

2.54 million passengers,

723,016 vehicles transported


Structure and services:

20 km of quays with 4 container and multi-purpose terminals for international transit; plus 3 coastal

terminals, 2 car terminals, 1 fruit terminal, 2 specialised (coffee and non-iron metals), 1 refrigerated

terminal, 9 bulk liquids and 6 bulk solids.

Figures Barcelona Port 2007:

51 million tons of goods,

2.6 million containers,

3 million passengers,

760,000 vehicles transported

07/06

8%

12%

15%

5%

10 million5 million2.4 millionContainers (TEU )

130 million85 million48 millionTons

End of work20102006Capacity / year


4.– INFRASTRUCTURES: THE FUTURE PORT

Future increases

Land area: 400 ha

Quay line: 5.3 km

Annual capacity: 8 M TEU

Logistics area: 160 ha

New international operator:

Hutchinson Port Holding. Expected increase in exchanges with Asia: +50%

4.– INFRASTRUCTURES: THE RAILWAYS, GOODS AND HIGH SPEED

Barcelona, a strategic nexus for the North-South and East-West corridors of Europe- Rotterdam- Paris- Barcelona // - Munich- Stuttgart- Lyons- Barcelona- Madrid

Some data of combined cargo transport in Barcelona: - 4.5 million tons managed from Barcelona in 2005

- Goods volume equivalent to 20% of all Spain

- Daily services day and night


Future axes of European high speed (2012)

4. – INFRASTRUCTURES: THE ROAD NETWORK

Ring roads: fast roads A-2, N-II, and E-15, with direct access to the international road network.

Logistic triangle: industrial estates located around the three main converging motorways. A-2, N-II and E-15 (AP7). The western part of this triangle is formed by the C-58, C-33 and E-15 roads and the rest by the towns of Mollet del Vallès, Parets del Vallès, Montmeló and Granollers, parallel to the E-15 motorway, and connects directly to the international road network.

Future actions: in the Mediterranean corridor (3rd lane E15 south and north and conversion of A2 north and the N-340 into freeways), and the transversal corridor (widening of axis and 4th by-pass)


Barcelona has knowledge-intensive networks and infrastructures:

Mare Nostrum supercomputer: in the National Supercomputing Centre, linked to the Universitat Politècnica de Catalunya (UPC). It is one of the most powerful in Europe and allows studies and simulations to be made in a large variety of areas. Managed by an independent scientific council

Alba synchrotron: This is one of the few 3rd generation in Europe. The synchrotron is a particle accelerator with speeds approaching the speed of light. It is primarily used in basic and industrial research. Its construction is expected to be completed in the Parc Tecnològic del Vallès in 2008

Barcelona Biomedical Research Park (PRBB): scientific equipment in biomedicine that gathers different institutions and independent research centres, such as the Research Centre in Regenerative Medicine, the Centre for Genomic Regulation and the Laboratory High Technology Institute (IAT) which has a Cyclotron, equipment used for biomedical research with molecular image techniques

Barcelona Scientific Park, La Salle Innovation Park, UPC Research and Innovation Park, Barcelona North Technological Park: they have research groups from the public and private sectors and a wide range of technological installations

Barcelona Media-UPF Park, with the Barcelona Media Innovation Centre (CIBM), the Casa de les TIC, the Centre Tecnològic TIC and other incubation complexes

La Salle-URL Centre for Audio-Visual Technologies, UPC Virtual Reality Centre.

Etc.


4.– INFRASTRUCTURES: HI-TECH INFRASTRUCTURES

5.– LARGE FUTURE PROJECTS: BARCELONA

1- 22@, district of technology and innovation, the preferential destination for knowledge-intensive activities.

2- Expansion of the port and the airport, improving the transport offer and intermodal connection for passengers and goods.

3 - Sagrera- Sant Andreu, great renovation around the central high speed railway station.

4 - b_tec, Interuniversity campus of the Besòs, an area for the generation and transmission of knowledge and innovation bringing together science and technology, public administration and business.

5 - Plaça de les Glòries and surrounding area, renovation of the square and creation of an intermodal transport centre with railway, underground, tram and bus.

6 - La Marina district a new area of mixed use, residential and economic activity in the traditional industrial area of the Zona Franca.

7 - Verneda-Estadella district, replacement of former factories, industrial warehouses and stores with office and housing blocks).

8- Gran Via and Fira de Barcelona economic district; the new economic motor of the Metropolitan Area that includes the expansion of the current exhibition area.


6.– TALENTED HUMAN RESOURCES: STATISTICS

Jobs market indicators (2nd quarter 2007)

Rates ACTIVITY OCCUPATIONS UNEMPLOYMENT Barcelona city 77.2 71.8 6.8Catalonia 76.5 71.3 6.7Spain 72.2 66.0 8.5European U. (UE-25)* 70.7 65.0 7.9

Notes: Specific labour rates, on the population from 16 to 64. *4th Quarter 2006. Source: Generalitat, Government of Catalonia, Barcelona City Hall, INE and EUROSTAT

Jobs market with: 20% active population in the period 2001-2007

+45% active population <35

+30% population with university studies

+12% foreign active population (300,845 people, April 2007)

Social Security members (general and self-employed schemes, 4th quarter 2006)

Totals % SpainBarcelona city 1,058,149 6.1%Metropolitan region 2,279,991 13.1%Catalonia 3,233,049 18.6%Spain 17,391,645 100.0%

Source: Ministry of Employment and Industry of the Generalitat Government of Catalonia



Source: Barcelona Centre Univwww.bcu.cesca.es

Barcelona, preferential destination for higher study programmes in Europe.

In 2007, the city received 24,000 first and second grade international students.

More than 66,000 students attended 350 masters, postgraduate and third grade specialisation courses.

6. – TALENTED HUMAN RESOURCES: TRAINING OFFER

8 Universities, with 16% of the university students in Spain, a total of 206,000 students enrolled on one of the 405 qualifications available in the city (academic year 2005-06).

Prestigious Business Schools, recognised and well placed on the international rankings (Wall Street Journal, Financial Times, Business week) assuring the attraction and retention of talent.

High quality professional and technical training, both in public, private and subsidised centres

Barcelona has:

Main lines of financial aid available in Barcelona

R&D+i : From 10% to 70% of the project,

Outsourcing projects: 50% of the research cost

25% of the cost of technological development

Training, discount up to 100% of the training costs of new and contracted personnel.

Creating employment: reduction of up to 20% of the annual salary cost (minimum requirement: 25 new workers)

Special lines: strategic projects, investment in assets, installation of company head office or activity expansion, incentives up to 70% of the total cost (minimum requirements: 10 new workers) Source: CIDEM 2007


7.– REGULATORY FRAMEWORK: INCENTIVES

General tax obligations for professionals and companies

Progressive scale of the personal income tax (IRPF), from 24% to 43%.

The tax obligations of expatriates compute a general tax of 24% for a maximum of six years (work done in Spain for non-residents)

the capital gains of physical persons and legal entities compute a fixed tax of 15% of the profit / wealth increase.

The profits of large companies are taxed at a general rate of 32.5% (30% from 2008)

Small companies are taxed at 25% up to an annual salary base of €120,240, and the surplus of this amount is taxed at 30%.

Reinvested company profits are taxed at 15%.

Exemption from paying the municipal economic activity tax (IAE) for smes invoicing under 1 million euros a year.

Special tax reductions for investments intended for research, development of projects and innovation.

Indirect taxes: Value added tax (IVA-VAT at 4%, 7% and 16% depending on the activity) and the succession tax and stamp duty.


7.– REGULATORY FRAMEWORK: TAXATION

8.– REAL ESTATE OFFER: OFFICES

New office offer

2007 +188,000 m2

2008 +383,000 m2

2009 +475,000 m2

Barcelona offices (data: 3rd quarter 2007) Total office stock: 5,129,295 m2

Surface area contracted in 2007: 286,000 m2

Offer available: 257,200 m2

Business district vacancy rate: 5.02 %Average rental traditional business district (+50% total offer): €21.75 m2/month


8.– REAL ESTATE OFFER: INDUSTRIAL

1ª Corona

2ª Corona

3ª Corona

Industrial offer among the largest in the Mediterranean arc, with 12 million m2 Market evolution: conversion of the industrial land closest to the centre into mixed land of offices and stores, and residential land. Relative relocation of industry in the 1st crown, to the more specialised areas away from the urban centre

Demand: the large part comes from transport, distribution and storage of medium sized companies

New promotion: small – medium warehouse (3,000 m2 maximum)

Stable prices and availability: 5%, distributed in logistic spaces (1st and 2nd crowns) and new projects (3rd crown)

Source: Jordà Guasch, Forcadell

INDUSTRIAL SPACE BARCELONA

Prices Rental Sale(€/m2/month) (€/m2)Man / Max Min / Max

1st Crown 6.00 / 8.75 1,200 /1,8502nd Crown 4.50 / 6.75 850 / 1,5003rd Crown 3.00 / 4.50 450 / 900


9. – FIRST IN QUALITY OF LIFE

Mediterranean climate with moderate temperatures and many hours of sun all year, enhancing street

activities (trade, leisure, business and fairs)

Life and leisure in the open air:

4.5 km of EU blue flag urban beaches

5.5 million m2 of green areas with 6.5 m2 of urban greenery per inhabitant

150 km of cycle paths 50% of citizens travel on foot or by bicycle

Large cultural offer:

16 million visitors a year to the cultural centres (Picasso, Miró, Gaudí, MNAC, MACBA …)

Calendar of concerts throughout the year, more than 49 theatre halls, network of 29 public libraries

9 buildings declared Unesco heritage of mankind

15 Michelin stars in the city’s restaurants

Sports equipment: 1,500 sports areas with 21% of residents enrolled.

Main factor of associationism 1st city in the world in the number of subscriptions/inhabitant.

Prestigious international schools: 26 centres of education: Japanese, Italian, German, French,

English

ESADE and IESE business schools, among the best in the world.

Universal quality medical cover: Hospitals and clinics of international prestige

1st European city in quality of life (Cushman & Wakefield 2007) 4th region in the world in life expectancy (WHO 2006) Citizen satisfaction 90% (Baròmetre Ciutadà 2006)


"The Anholt City Brands Index" (2007)

1st brand of city without being a state capital 9th global city brand, 4th in Europe

"European Cities Monitor" (2007) 1st city in Europe of greatest progress1st city in Europe for worker’s quality of life4th city in Europe preferred for settling

”FDi’s Top 20 Expat Cities" (2006)

1st European city as a preferred destinations for expatriates

“Fdi’s Western European City of the Future 2006”

"European Investment Monitor" (2006)

3rd European destination for international investments

“European Cities Entrepreneurship Ranking (ECER)” (2007)

1st city in the south of Europe of the study

"World-wide cost of living survey" (2007)

Out of the group of the 30 most expensive cities in the world

10. – INTERNATIONAL POSITIONING


"Branding Communication Strategies" (May 2006)

1st city in Europe with a prestige brand

“Europe’s Coolest Cities” (August 2007)

One of the most fashionable cities in Europe

“Emerging Trends” (June 2006)

7th city in Europe with most real estate business potential

“Top overseas commuter belt destinations” (June 2006)

1st city in Europe preferred by professional visitors “World Country & City Rankings 2006” (April 2007)

4th city in the world for organising international meetings

“International Meeting Statistics” (August 2006)

7th city in the world for organising international congresses

“European Fairground Ranking” (August 2007)

4th city in Europe with available fairground (280,000 m2)

10. – INTERNATIONAL POSITIONING


Union of Int. Associations

Advice and assistance for investors: - Detection of business opportunities and key investment factors - Support for getting to know the territory. - Representation before the local and regional administration.- Project accompaniment- Investor support publications

Support in finding offices and spaces for relocation

Organisation of business agendas: institutional and private contacts that improve the project’s chances of success

Seminars and presentations: introduction to the most competitive and promising sectors and new projects developed in the city

Advice and support in the expansion of foreign companies’ projects

Actions abroad: - Institutional support for improving the position of Barcelona and its strategic sectors- Internationalisation support of Barcelona’s business community

Free, quality confidential services: www.bcn.cat/barcelonanegocis


- PROMOCIÓ ECONÒMICA OFFERS YOU -

Please contact us for further information:

Promoció Econòmica Internacional

AJUNTAMENT DE BARCELONA

Llacuna, 162 1ª planta

08018 Barcelona

Tel: + 34 93 256 39 19

Fax: + 34 93 309 42 48

e-mail: [email protected]

web: www.bcn.cat/barcelonanegocis

Document prepared by the technical services of:

Promoció Econòmica Internacional de l’Ajuntament de Barcelona


Documents

Competitive advantages for new international projects May 2008 BARCELONA, A GOOD INVESTMENT Ajuntament de BarcelonaPromoció Econòmica Internacional