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Albia Capital
Bilbao12 de diciembre 2012
Foreign Investment Commission
STATE SUBSIDIES
“The EuroVegas case”
“Withdrawl of Solar Plant Subisidies”
Legal Advice
&Company Internationalisation
ASECOEX
Colon de Larreategui, 35
48009 Bilbao (SPAIN)
Tel. +(34) 944 23 75 42
www.asecoex.com Mr. Txaber Fernandez Beldarrain
FLORENCE (ITALY)58th Congress
October 29 – November 2, 2014
www.asecoex.com
INDEX
1. FDI in Spain
2. Ease-of-doing Business Index
3. State aid: EU Regulations
4. Spanish Regional Aid Map 2014-2020
5. Case 1; EUROVEGAS, or “Welcome Mr. Marshall”
6. Case 2; Withdrawal of Solar Plants Subsidies
www.asecoex.com
2009 2010 2011 2012 20130
5
10
15
20
25
GreenfieldAcquisitionsTOTAL
Spain is the 9th largest recipient of FDI worldwide (FDI Regulatory Restrictiveness Index)
Gross FDI up 8.8% in 2013 to €15.8 billion
1. FDI in Spain
One of the leading global economic powers.
Domestic market: 47 million population plus additional demands of 57.7 million tourists.
Geostrategic position.
Interesting business opportunities.
Rapid growth in international trade and foreign investments in recent years has made Spain the sixth most open economy to FDI.
www.asecoex.com
Spain dropped to 52nd in the 2014 Index from 46th position on the 2013 index. Source Doing Business Reports. Word Bank
2014 IndexRanking
2013 Index Ranking Procedures Days
Doing business (overall) 52 46
Starting a business 142 136 10 23
Dealing with construction permits 98 91 9 230
Registering property 60 56 5 13
Getting credit 55 52
Protecting Investors 98 95
Enforcing contracts 59 58
Paying taxes 67 33 SPAIN OECD Average
Payments per year 8 12
Time (hours per year) 167 175
Total tax rate (% profit) 58,6 41,3
2. Ease-of-doing Business Index
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In accordance with Art. 107 Article 107 Treaty on the Functioning of the European Union (TFEU , the following States Aids are compatible with the internal market:
a) aid to promote the economic development of areas where the standard of living is abnormally low; SPAIN; 26 % unemploymentGDP per capita 93 % below EU General Average (Sweden 123 %)
b) aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State;
c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest.
3. State aid: EU Regulations
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The designated areas have:
1. A GDP per capita below 75% of the EU average.
2. A total population of 32.25 M (68.59 % of the population of Spain).
Levels of aid that can be granted to regional investment projects carried out
1. By large enterprises; between 10% and 35% of total investment costs.
2. By medium sized companies; the percentages can be increased 10%.
3. By small enterprises; the percentage can be increased 20%.
4. Spanish Regional Aid Map 2014-2020
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Project´s name: EuroVegas Promoter: Las Vegas Sand. Co –US- (Sheldon Adelson) Object: Casino, hotels and convention complex Location: Alcorcon (Madrid) Investment: €16 Billions Employment: 250.000 (direct & indirect)
Las Vegas Sand requirements;
Two years exemption of Social Security contributions. Two years of tax exemptions Guarantee of the Kingdom of Spain to get a € 25M credit facility from European Investment Bk. Free assignment of all required public land. Amendments of Spanish Labor Law (Estatutos de los Trabajadores) Amendment of smoking ban law. Special privilege for hiring foreign employees (speeding working permits). Authorized entry for minors under 18 years and Gambling Addicts.
State guarantee against any change in the law that could negatively affect its investment.
FORBIDDEN Against Spanish & EU law
THE MORE YOU ASK FOR, THE LESS YOU GET
5. Case 1; EUROVEGAS 2013 “Welcome Mr. Marshall”
www.asecoex.com
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Supreme Court Decisions
Implemt,Solar PlantsSubsidy Scheme
Modification of the Subsidy Scheme
Investors:• National• Foreign Invest.
•Reasonable return rate (7,5%)•Retroactive effect
International Funds:• Hasdar (Abu Dhabi)• RREEF Infraestructure
2004 2010
World Bank ICSID
Ratifying the legality of the new scheme and efects.
2012/13 2014
6. Case 2; Withdrawl of Solar Plant Subisidies
Direct Effects
Spanish solar PV plants have suffered an average 30 to 40 per cent cut in income. More than half of Spain’s solar “photovoltaic” companies have gone bankrupt.
Discrimination due to nationality could occur if the award rendered by ICSID is in favor of international funds.
If that were the case, what could Spanish investors do?
