Doing Business in Spain

1. Doing Business in Spain Toronto, 20th May 2008

2. Invest in Spain: Economy, Business and Advantages for Canadian companies May, 2008 Marian Scheifler Phd. Chief Operations Manager

3. Political Structure. • Spain in Figures (I-II). • Canada-Spain: Some things we share. • Main Agreements Spain-Canada. • Main Reasons to Invest in Spain (I-III). • About INTERES.

4. 1. POLITICAL STRUCTURE

5. 2. SPAIN IN FIGURES (I)

6. 2. SPAIN IN FIGURES (II) • The world’s 8th largest economy (market exchange rate); 11th (purchasing power parity). • (IMF-2008) • The 3rd largest investor in the world and the 2nd largest in Latin America. • (World Investment Report 2007 (UNCTAD) • 3. The 8th largest FDI stock worldwide (6th in the EU). • (World Investment Report 2007 (UNCTAD) • 4. The 10th best place to live and the preferred work destination for Europeans. • Worldwide Quality-of-life Index, Economist Intelligence Unit • 5. The world’s 2nd tourist destination. • (Tourism Organization (WTO))

7. 3. CANADA – SPAIN: SOME THINGS WE SHARE • Multilingual and multicultural societies. • Highly decentralized administrations: important role played by Provinces and Autonomous Communities. • Economic performance. • Great potential to strengthen trade and investment ties: current trade and investment flows belie the similarities in economic performance and complementarities in our economies.

8. CANADIAN COMPANIES IN SPAIN

9. 4. MAIN AGREEMENTS SPAIN - CANADA • S&T: (Science and Technology) • Spain’s R&D Plan for 2008-2011 identifies Canada as one of the three non-EU strategic countries for cooperation. • Canadeka: Bilateral program for technological cooperaton, CDTI –NRC. Support to joint projects of Spanish-Canadian companies. • CSIC-NRC: Development of research and innovation projects. • Genoma España – Genome Canada: Joint research projects. • CESCE-EDC: Reinsurance agreement for joint operations of Canadian and Spanish companies. • Double taxation: Agreement to avoid double taxation on income and capital.

10. 5. MAIN REASONS TO INVEST IN SPAIN (I) • Geostrategic location: • Privileged position for southern Europe's key markets, Latin America and North Africa. • Potential access to over 1.2 billion consumers: • 45 million consumers in Spain. • 443 million consumers in Europe. • Entry point for non-EU Mediterranean countries with 264 million consumers. (privileged relations with Morocco and Algeria). • Hub for South and Central America, with 560 million consumers. • Financial protocols with North Africa and Latin America.

11. 5. MAIN REASONS TO INVEST IN SPAIN (I) • Ultra Modern Transport Infrastructure • 47 airports. • 53 ports on both the Atlantic and the Mediterranean coasts. • 3rd largest EU highway network. • Ambitious plans for high speed trains (Spain will be the world leader with 2,230 km in 2010). • State-of-the-Art metro system in major cities.

12. 5. MAIN REASONS TO INVEST IN SPAIN (II) Economic criteria: Competitive operating costs Source: Eurostat 2007 Source: Eurostat 2008 Source: Cost of Living Survey 2007, Mercer Human Research Consulting Source: Eurostat 2008

13. 5. MAIN REASONS TO INVEST IN SPAIN (III) Fiscal incentives framework map

14. 6. About INTERES • INTERES Invest in Spain is the leading government organization that supports foreign companies seeking toset up or expandtheir business in Spain. • We provide comprehensive, efficient and confidential consultation at no cost during all stages of the investment process. • THE ONE-STOP SHOP FOR INVESTORS IN SPAIN.

15. Investor Services Pre-Installation Installation Operation Expansion Relocation Benchmarking & Attraction Support to new invertors strengthening of loyalty Growth Retention

17. Thank you very much!

18. Doing Business in Spain Toronto, 20th May 2008

19. Spain High added value in ICT Andrés García ICT Investor Services Manager TORONTO, May 20th, 2008

20. Why ICT? • Infrastructure Facts • ICT Market • Higher Education • ICT Industry • Business Opportunities

21. I. Why ICT? • Spain has one of Europe’s most liberalized ICT markets. Full telecom. market liberalization in 1998: • Increased the number of players (operators) • Improved the quality of services • Telecoms Infrastructure Facts 2006: • 39 landline service operators • 15 mobile service operators • 172 Internet Service Providers • 37 local cable operators • More than 1,800,000 km of transmission network • 99.9% of Spain’s telecom. network is digital • 20,09 million landlines in operation in Spain • 110% mobile telephone penetration (Q1.2008) • 90% broadband penetration in business (2007) Source: CMT- Telecom Market Commission (Annual Report 2006) www.cmt.es

22. I. Why ICT? ICT represents a market of more than €101 billion... Other Telecom. Services Electronic comp. & equip. Information Technologies …and a 9.6% of Spain’s GDP Source: AETIC – Spain’s ICT & Electronics Association (2007)

23. I. Why ICT? Spain’s ICT’s market growth rate is well above EU average: Source: EITO –European IT Observatory. Update 2006 in Cooperation with IDC. Market Value 2006: 644 billion € *excl. Cyprus & Malta

24. I. Why ICT? • More than 13 500 engineers graduate in ICT-related studies every year • 96 000 vocational further education students taking ICT courses Source: INE and Ministry of Education and Science

25. I. Why ICT? Over 37 500 ICT companies already operating in Spain Source: INE – Spanish National Statistics Institute

26. I. Why ICT? • Spanish companies are present and recognized in major international markets: Telefónica, Indra, Panda Software, Telvent, HISPASAT, ITP, CIRSA, AEQ, RYMSA, Ampo, ONA, GMV…… • Spain is a leader in advanced technologies: • 3 out of 5 flights in the world use Spanish software for landing. • 13 of the 15 major North American oil and gas companies have Spanish management, control and information systems installed. • ICT’s investment in R&D accounts for 40% of the total amount invested by the private sector in Spain

27. I. Why ICT? Leading ICT multinationals are already located in Spain taking advantage of Spain’s benefits:

28. I. Why ICT? Stability Cost Maturity Capacity Excellence

29. II. Business Opportunities • Spain offers specific opportunities in • Nearshore Platforms • Digital Terrestrial Television • Auxiliary Mobile Services • WiMAX • VoIP services • Electronic ID Support Services • Intelligent Home • Digital Cinema • Commercial B2B Interchange Systems • Free Software Activities

30. Nearshore The unique combination of a major EU country with a stable, healthy economy and a history of technological and business innovation, coupled with relatively low costs, staff rotation and inflation rates creates a permanent source of highly qualified business and ICT professionals enabling Spain to sustainably deliver services to other European countries. A focus upon higher value services, provided by demonstrably experienced professionals, from a European location to provide an outstanding Value-Risk-Cost relationship

31. Nearshore • Competitive advantages: • Maturity in technology- and commercial practices • Inner IT demand mature and with high growth expectancy • Availability of experienced human resources and Higher Education Centres • Telecom. Infrastructures & transport costs • Outstanding Value-Cost-Risk relationship

32. Mobile Auxiliary Services • Potential market: • Large number of users (51 million lines) with a high penetration rate (110,1%) • Mobile turnover in 2006 of €19.5 billion (+8%) • Legislation open to free competition and entry of new companies • Prices of data services dropping, getting closer to those of cable • Existence of collaboration forums between the various players in the market

33. Mobile Auxiliary Services • Development, establishment and commercialization of new services: • Instant Messaging and Multimedia • Video on Demand • Localization Based Services • Mobile TV • Video Streaming • Voice-controlled access to contents • Alternative payment systems

34. Thank you very much! Andrés García Investor Services Manager - ICT agarciam@interes.org

35. Doing Business in Spain Toronto, 20th May 2008

36. What makesSpain a winning location for the Life Sciences & Biotech industry? Ana Arias Biotech & Life Sciences Investor Services Manager

37. INDEX • Why Spain? • Why biotechnology? • Why you can bet on Spanish biotech • A piece of history • Business opportunities

38. Why Spain? • Highly qualified and competitive human resources • Quality and standard of living • Geo-strategic location • Cultural and educational levels • Weather • Natural resources • Logistics... Spain has solid scientific and technological capabilities that have enabled a competitive bio industry to emerge

39. Why Biotechnology? • Employment: around 80,000 people • Over 500 enterprises involved in biotech activities • Turnover: over €19,000 million and investment of over €200 million in research and development (R&D). • Annual growth of around 30% in total revenue. ………making Spain the most dynamic European country in this area after Ireland. Source: ASEBIO – Spanish Association of Bioenterprises (2004)

40. Why Biotechnology? (cont.) • Bio-economy heads Spain’s strategic agenda. • The Spanish pharmaceutical market is the fifth largest in the EU-15 and the seventh in the world. • Favourable financial environment: increase in the volume of venture capital operations in biotechnology. • New venture capital funds specialized in biotechnology and national networks of business angels are being created

41. Why you can bet on Spanish biotech • Solid Science • -Good scientific output • Groups and Centers of Excellence • -R&D Integrated System • Efficient WorkFlow • Excellent conditions for Translational Research • Modern Science Parks and state of the art facilities • Good partnership opportunities • -“Value for Science” • Every euro in the lab is put to good use • Great potential -Huge body of knowledge yet to be exploited • -Human Capital, very well trained

42. Why you can bet on Spanishbiotech(cont.) • Emerging bio-economy • -Increasing support from Governments for R&D and • bio-enterprise creation • -Competition among local Governments for talent and capital • -Good balance between being competitive on cost and competitive • in differentiation • Good personal attitudes • -Creativity • -Sense of community and focus on colective objectives and challenges • -Positive spirit and commitment

43. Why you can bet on Spanish biotech(cont.) • Solid Science: Scientific and Technological Facilities and • Capabilities • The Genomics, Proteomics and Bioinformatics platformsboost the • national participation in biotechnological advances: • -National DNA Bank • -Spanish National Genotyping Centre • -National Proteomics Institute ProteoRed • -National Bioinformatics Institute INB • A new framework for co-operative biomedical research is being created: • -The Biomedical Research Thematic Networks (RETICs) • -The Biomedical Research Centers Network (CIBER)

44. 6% 5% 18% 26% 7% 18% <5% 5-15% 15-25% >25% Why you can bet on Spanish biotech (cont.) • Solid Science:Principal Bio-clusters Geographic distribution of Spanish biotech companies • Catalonia and Madrid, followed by the Valencia Region, Andalusia, Basque Country and Galicia have the highest concentration of biotech companies. • The rest of the Spanish regions are also designing and implementing strategies. Source: ASEBIO Report – Spanish Association of Bioenterprises (2006)

45. Why you can bet on Spanish biotech(cont.) • Great potential to unlock: Workforce • 7,000 researchers in biotechnology and biomedicine: 11th position in the world. • 4th position in Europe in scientific output in biotechnology. • 1995-2003: number of scientific research papers published in Spain grew by over 12%. • 66% of biotechnology researchers working within the public Spanish R&D System were cited by U.S. patents.

46. Why you can bet on Spanish biotech (cont.) • Emerging bio-economy: Legal framework • The new Spanish Law on Biomedical Research: creation of a National Biobank Register • Favourable legal framework: Cultivation of Genetically Modified Organisms (GMO) and a unique Traceability and Labelling Law • Full Tax exemption on biofuels until Dec 2012. • Other Spanish instruments and laws.

47. Why you can bet on Spanish biotech (cont.) • Emerging bio-economy:Government support • The Ingenio 2010 Programme: to meet the Research, Development and Innovation convergence objectives of the Lisbon Strategy. • Sustained annual growth rates of the government’s budgets in recent years. • The Spanish Tax System is one of the most advanced in the world, especially in the Research, Development and Innovation field. • The adoption of the Young Innovative Company Status will no doubt help biotechnology firms.

48. A piece of history • 2001:The Spanish National Cancer Centre (CNIO) launches its first Oncochip. • 2002:Abengoa signs a $35.5 M R&D project with the U.S Department of Energy (DOE). • 2003:Serono concentrates global production of its growth hormone in Spain. • 2005:Genetrix receives the first Orphan Status designation by the EMEA in Europe for a medicinal product based on the use of stem cells of adult origin. • 2005:GSK opens its Molecular Screening and Tropical diseases research facilities in Spain. • 2005:Natraceutical buys Braes Group (€80 M). In 2006 it acquires Forté Pharma (€82M). • 2006:Spain continues to be the European leader in the cultivation of genetically modified crop varieties with a total of 53,667 hectares under cultivation. • 2007:The EMEA approves Zeltia's drug Yondelis for the treatment of soft tissue sarcomas. • 2008:The OMS designated the ONT (Organización Nacional de Transplantes) as a WHO Collaborating Center on Donation and Transplants

49. Business Opportunities

50. BIO Business Opportunities Spain offers specific opportunities in……………………. • Biochips: towards a personalized medicine • Food quality and security • Private Equity • Functional foods • Organic farming