As a result of the growth of the Spanish economy, distribution has become a key factor insupplying the consumer market. Differentiated sales channels to consumers have developedsignificantly in the last few years. These range from traditional distribution methods, in whichwholesalers sell to traditional shops and these to the public, to more sophisticated methods, characterised by an increased presence of large multinational hypermarkets, retail-stores and central purchasing units. Spanish procedures are in alignment with the rest of Western Europe, where price remainsparamount. However, credit terms, marketing assistance and after-sales service are key factorsin local purchase decisions. The Spanish market is a series of regional markets joined by twomajor hubs, Madrid and Barcelona. The vast majority of agents, distributors, foreign subsidiaries and government-controlled entitiesthat make up the economic power block of the country, operate in these two hubs. Dealers, branch offices and government offices located outside these two hubs will almost invariably obtain their supplies from their Madrid and Barcelona contacts rather than engage in directimportation. The key to a foreign firm’s sales success is either to appoint a competent agent ordistributor, or to establish an effective subsidiary in the Madrid or Barcelona area. Payments are usually based on 30, 60 or 90-day terms. Large corporations negotiate or imposelonger payment terms that can last up to six months. Letters of credit are the most secure meanof payments. International transactions are made in Euro or US dollars. Market entry requires a wide range of information. You have to make decisions on all kinds ofissues that will ultimately affect your approach to the market. New Zealand Trade and Enterprisecan provide you with hard data, factual, complete and comprehensive, ranging from trends andsegments in the market to distribution/competition and market demographics. For further information, please contact your New Zealand Trade and Enterprise client manager or call NZTEon 0800 555 888. regulatory issues An outline of some of the regulatory issues New Zealand exporters to Spain need to be aware offollow.Anti-Dumping As a signatory to the Anti-dumping and Countervailing Duty Codes of the GATT, Spain (throughthe EU Anti-dumping Committee) penalises products imported at less than their normal value,
which cause injury to domestic industry. The duration of the countervailing duty imposition variesfrom case to case. Currency Restrictions No Australasian banks operate in Spain. Banco Santander has an office in Sydney. Citibank, Barclays, and Natwest have major Spanish operations. Trade is normally in Euro or US dollars. Spanish importers will have difficulty paying in New Zealand dollars. E-Business Electronic commerce is booming in Spain, although the country still requires some time to get used to this technology (67% of users are still reluctant to use the Internet to make purchases).Although 72% of Spanish firms have a web page, on-line sales are not yet available in themajority of cases. The Spanish Association of e-commerce is optimistic in their forecasts andbelieve that e-commerce will experience a very fast growth rate in the current year when over 10% of transactions in Spain are expected to be made through the Internet. Health Regulations All phytosanitary certificates are harmonised within the EU system. New Zealand’s MAF has full details on phytosanitary certificates required for companies exporting to the EU. Import Barriers Spanish customs values shipments at CIF prices. All shipments must be cleared throughCustoms by a registered customs agent. Usually, total costs to clear customs are at least 20% of the shipment’s CIF value. This includes tariffs, value added tax (16%), custom agent andhandling fees. Import Quotas and Licences The EU allocates annual import quotas for a number of food products from third countries(seafood, meat, dairy products). In this context, the allowable import quotas for New Zealandgoods are determined every year by the EU Commission. Duties for New Zealand goodsentering Spain vary considerably depending on the nature of the product. Several different forms of documentation are required for shipments into Spain. Exporters arerequired to present a commercial invoice, a bill of lading, certificate of origin of all shipments andsanitary certificate in the case of food and beverage products. Marking and Bar Codes, Packing and Labelling Some imported goods, regardless of origin, have to comply with certain technical regulationsregarding qualification approval. EU directives and regulations are also obligatory. As in othercountries, there are a number of technical voluntary requirements imposed by the market andcompetition in that market for which there are several certification systems. The ISO 9000 seriesquality standards are increasingly being accepted as a factor of competitiveness through acompany quality certificate. The ISO 14000 series is also acquiring growing importance for the environment. Tariffs Spain does not charge tariffs to goods imported from another EU member country, while third-country goods are charged the EU common external tariff. Since 1988, Spain has used theharmonised system of tariff nomenclature for applying duties (TARIC).
Depending on the specific product, New Zealand Trade and Enterprise may be able to providefree basic information on tariffs at an indicative level to assist companies to assess viability ofmarket entry. taxation Three types of Value Added Tax (VAT) are imposed, the: General rate of 16% Reduced rate of 7% Super-reduced rate of 4% The general Corporate Income Tax rate is 35% on net income. freight Air Freight Commercial air traffic is handled by 40 airports in mainland Spain and the islands, 27 of whichhave customs facilities. Transcontinental air links are centered through Madrid and Barcelona. Air New Zealand to London or Frankfurt with a regional connection is a quick option. There is adaily service. Singapore Airlines service Spain three times a week and connect with NewZealand via Singapore. Aerolineas Argentinas fly to Madrid via Buenos Aires. A number of otherairlines also offer connections to Spain. Sea Freight Spain’s geographical position and the peninsular nature of its mainland with 4000kms of coastline, has led to the development of an extensive port system with sea links to all majordestinations. There are 28 international ports, plus 200 minor ports in Spain. Barcelona andValencia are the main hubs for sea freight traffic in the Mediterranean, and Vigo in the Atlantic.The Canary Islands* still have a large trade with the countries of West Africa. The New Zealand Mediterranean service stops in Barcelona after rather a long journey viaGreece, Italy and France. A faster service is provided by P&O to Lisbon. Adequate road haulageexists in Lisbon to connect with all Spanish cities. The Canary Islands are served by variousconnections, including London, Singapore, Rotterdam or Barcelona. *The Canary Islands The Canary Islands are one of the 17 Spanish regions, similar in its legal system andgovernment to any other Spanish province. The only difference compared with the rest of Spainis that they benefited for a number of years from a special reduced tax, which was removed afew years ago to be consistent with the rest of Spain.
Doing business with Spain Cultural and Business TipsAs a modern European country, New Zealand business visitors will not find Spain very different from other western countries. However, some cultural peculiarities are worth noting. Spanish people prefer one-on-one personal contact, so at least one visit to Spain willprobably be necessary to secure business. Business meetings are usually followed by a meal (lunch or dinner) to cement therelationship. Make sure itineraries allow adequate time for relationship building. The Spanish are poor written communicators. Written correspondence should be in Spanish, as communication in foreign languages tends to sit around until it can be translated. The Spanish “siesta” is long gone but has been replaced by the business lunch. Most businesses are closed from 2pm to 4pm. Business dress is formal. A jacket and tie are absolutely essential even in summer. Womenshould wear smart conservative clothes. The Spanish see a person’s outward appearanceas a sign of their credibility. Give attention to your overall appearance, beard, nails, hair, shoes and briefcase. Spanish business meetings are less hasty than in New Zealand. Try not to be in a hurry toget to the point. Business people in Spain like to negotiate. Plan your negotiation strategy carefully and cover variables such as specifications, add on features, packaging, shipping, delivery time, advertising, and support prior to setting the price. Spanish importing is quite fragmented. Beware of giving exclusive national distributionwithout first establishing whether your distributor has a solid national network. You may needmore than one importer, plus a separate agent for the Canary Islands. Likewise, beware of assigning rights to Portugal to a Spanish company. It is unlikely that a European-widedistributor, based in England or Germany will do your product justice in Spain. visa requirements European Community citizens need a national identity card or passport. Citizens from the rest ofthe world require a valid passport plus a temporary entrance or residence visa issued by theappropriate Spanish Embassy or Consulate for their country of residence. New Zealand citizensvisiting Spain are exempt from a temporary entrance visa for visits not exceeding 90 days and they must not have the intention of undertaking any work in Spain. At the time of writing, Spain does not maintain an Embassy in New Zealand, with the Canberra based Ambassador accredited to New Zealand. The Consulate-General of Spain in Sydney hasjurisdiction for the issuing of visas to people resident in New Zealand (see www.embaspain.comfor details). The Economic and Commercial Office of the Embassy of Spain is also located in Sydney.
Time difference Spain is ten to twelve hours behind New Zealand, depending on the time of year. During Spain’sdaylight savings (March-October), Spain is ten hours behind. During New Zealand's daylightsavings (October-March), Spain is twelve hours behind. For the brief period of transition between the countries' daylight savings starting and finishing, Spain is eleven hours behind. For 2006To March 19: twelve hours behind March 19 – March 26:eleven hours behind March 26 – October 1ten hours behind October 1 – October 29eleven hours behind From October 29twelve hours behind To find out the current time in Spain, go to www.timeanddate.com. contacts New Zealand Trade and Enterprise Enterprise Hotline Phone 0800 555 888 Website www.nzte.govt.nzNew Zealand Trade and Enterprise Spain Address New Zealand Trade and Enterprise Madrid c/o New Zealand EmbassyPlaza de La Lealtad 2, 3rdFloor 28014 Madrid Spain Phone +34 91 531 5182 Fax +34 91 523 0171 Email info@nzte.govt.nzNew Zealand Embassy Madrid Address Plaza de La Lealtad 2, 3rdFloor 28014 Madrid Spain Phone +34 915 230 226 Fax +34 915 230 171 Email nzembmad@embnzelanda.comtenidos.comWebsite www.nzembassy.com/home.cfm?c=27
New Zealand Consulate Address 4thFloor, Travessera de Gracia 64 – 2º 08006 Barcelona Spain Phone +34 93 209 0399 Fax +34 93 202 0890 useful websites Organisation Web Address European Unionwww.europa.eu.intSpanish Government directory www.la-moncloa.es (Spanish only) Spanish Ministry of Trade www.mcx.es (Spanish only) Spanish Institute of Foreign Trade www.icex.es (Spanish only) El Mundo newspaper www.elmundo.com (Spanish only) Invest in Spain (Ministry of Economy) www.investinspain.orgNational Statistical Institute www.ine.esBank of Spain (Banco de España) www.bde.esCentral Companies Register www.rmc.esSpanish Tourism www.spain.infoDisclaimer: While New Zealand Trade and Enterprise has verified the information in this document, we make no representation as to the completeness, correctness, currency, accuracy or fitness for any purpose of the information. New Zealand Trade and Enterprise will not be responsible for any damage or loss suffered by any person arising from the information contained in this document, whether that damage or loss arises from negligence or otherwise.