Virginie MolinierFlorence , October 30th, 2014

IS MY COUNTRY ATTRACTIVE TO FOREIGN INVESTORS? - SPAIN

FOREIGN INVESTMENT COMMISSION AT THE 58th UIA

CONGRESS IN FLORENCE

Overview

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• Employment law:

- Employment legislation is contained in “Estatuto de los Trabajadores”: the Employee Rights regulation and Collective Bargaining agreements.

- An unusual feature of Spain’s employment legislation is the special Status of executive manager, “alto directivo”

• Different types of employment agreements:

- Fixed Term Contracts – possible only in specific cases and for a limited period of max. 24 months.

- Full-time/Part-time employment agreements: statutory working time of 40 hours per week.

- Paid vacation: minimum 30 calendar days.

Attractive points:1. Social Security Contributions

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• The main costs:

- Social security rates (employer):31.55%- Social security rates (employee): 6.35%- Monthly contribution basis:

Minimum : 753 € Maximum : 3.597 €

• Investment support measures:

- Since February 2014: an employer hiring someone on a permanent contract between 25 February and 31 December, is eligible for a reduced employer’s social security contribution of a lump sum of € 100 per month, per contract, for a period of two years from the date of hire.

Attractive Points:2. Flexible Hiring

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• Act of 2013 established a new type of employment contract: «contrato indefinido de apoyo a los emprendedores», or employment agreement for unlimited period of time to support entrepreneurs, which allows a probation period of one year.

• Increased possibilities in hiring apprentices and trainees: the age limit is raised to 30.

Attractive Points:3. Flexible Dismissal Provisions

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• Common characteristics:

- Notice period : 15 days.

- Severance payment:

Since 2012, decrease from 45 days’ salary per year of service to 33 days in case of dismissal without fair cause (up to a maximum of 24 months)

dismissal for economic, technical, organisational or productivity reasons: 20 days’ salary per year of service (up to a maximum of 12 months).

Attractive Points:3. Flexible Dismissal Provisions

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• Grounds for dismissal:

- Disciplinary: causes established by applicable Collective Bargaining agreement.

- Objective:

a) ineptitudeb) lack of flexibility/adaptabilityc) absenteeism (since 2012 opportunity to dismiss in cases

of absence of 20% of the working time in 2 consecutive months)

d) insufficient cash flowe) economic, technical, organisational or productivity

issues

Attractive Points:3. Flexible Dismissal Provisions

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• Dismissal for economic, technical, organizational or productivity issues:

Greater flexibility in the grounds for dismissal: for current or predicted losses or persistent decrease in incomes or sales.

Easier procedure: abolition of prior administrative authorization required for collective dismissal.

Attractive Points:3. Flexible Dismissal Provisions

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• Increase in employers’ bargaining strength over employees:

right to change some conditions of employment without employees’ prior consent:

- relocation;- change in function and responsibility;- salary (up to 10% in case of losses in income for 9

consecutive months);- working time (reduce working time up to 70%).

Attractive Points:3. Flexible Dismissal Provisions

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• Common characteristics:

- Notice period : 15 days.

- Severance payment:

Since 2012, decrease from 45 days’ salary per year of service to 33 days in case of dismissal without fair cause (up to a maximum of 24 months)

dismissal for economic, technical, organisational or productivity reasons: 20 days’ salary per year of service (up to a maximum of 12 months).

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ABOGADOS

7, rue Margueritte – 75017 ParisTelf.: + 33 1 44 40 12 90

8, rue Richer de Belleval – 34000 MontpellierTelf.: + 33 4 30 63 83 05

Avda. Diagonal 442 3º 2ª – 08037 BarcelonaTelf.: +34 93 238 62 00

Calle Serrano 63, 2º D. 28006 - Madrid Telf.: +34 91 083 18 84

v.molinier@mbabogados.eu

Thank you