Is buy-to-let a good investment in Spain?

Financial crisis increases renting over buying

SPAIN -- (by Fuster & Associates) Buy-to-let is an incredibly popular investment method in the UK but it has still not fully caught on in Spain. This has been due largely to the Spanish rental laws which have historically been extremely rigid as well as the propensity for the Spanish to purchase their homes rather than rent which has held back demand. However, this could be set to change with the Spanish press revealing that the government is considering further changes to rental laws in order to provide flexibility. There are also currently very attractive rental yields with residential property offering 5.3% annual yields, well above returns available on government bonds and savings accounts. On top of this the current economic situation in Spain with low wages and a relatively high earnings to property price ratio mean that more Spaniards are being forced to consider the rental option. This rise in demand coupled with further changes in the law which would provide security against defaulting tenants could be the catalysts for a buy-to-let boom.

Tax inspectors checking on Spanish football stars

Ramos, Casillas, Alonso, Iniesta, Xavi and Piqué, among the watched

'Gerard Piqué for H.E. by Mango'

MADRID -- According to El Mundo, several of Spain's most international footballers are being investigated because it is believed that many of the companies they have created to exploit their image register very little or no trading activity. However, as the result of a so-called 'political pact', since 1996 footballers can receive 15% of their club salaries via companies controlling their image rights. Nevertheless, the tax authorities are of the opinion that most of these companies have no real commercial activity of any kind. The remaining 85% of the remuneration is taxed at the tyop rate (56% in Catalonia and 52% in most of the rest of the country), while the exceptions (the 15%) are taxed at company rates, which was at 30% in 2014. Hacienda (the Treasury) is not seeking to charge anyone with tax evasion or anything similar as there is no indication of intentional fraud, but is demanding that the players pay the difference between one tax rate and the other for the last four years. Experts consulted by El Mundo think that Hacienda's change of mind is nothing more than an 'excess of zeal' on its part.

Santana Books ceases trading at the end of this year

Fantastic discounts on the best books about Spain

SPAIN -- The reason this piece is datelined 'Spain' instead of Mijas-Pueblo, where they're based, is that the news that Santana Books is closing at the end of the year will affect English-speakers all over the country. Self-described as Publishers of Essential Books on Spain, they (and the authors) have given us some of the best books on the country anywhere. Titles include You and the Law in Spain (by David Searle), now in its 16th updated edition, I believe, and a veritable bible on the convoluted laws of hereabouts. Other titles: A Guide to Wild Spain, Portugal and Gibraltar (by John Butler),  Apartment Gardening Mediterranean Style (by Clodagh and Dick Handscombe) ... you can check them out here; they're offering fantastic discounts on most of them, so get moving!

Sotogrande reduces losses by 12%

Sotogrande S.A. agrees to joint venture

SOTOGRANDE (San Roque, Cádiz) -- Sotogrande S.A., the real estate branch of the NH Hotels chain, registered losses of €9.01 million up to September 30, 2014, which is 12% less than the €10.2M losses for the same period last year. According to documents registered with the Comisión Nacional del Mercado de Valores (CNMV, National Stock Exchange Commission), group income was €14.3M, compared to that of 2013, which amounted to €20M, 28% less. Other significant news about Sotogrande SA is that it informed the CNMV that Sociedad 3 and its majority shareholder, NH Hotel Group SA, had agreed to a joint venture with the Cerberus and Orion groups, with the objective of transmitting 96.997% of Sotogrande SA's share capital and of the intragroup financing rights.

New store for British products opens in Pueblo Nuevo

(europasur.es)

PUEBLO NUEVO (San Roque, Cádiz) -- British expats will be delighted to know (if they don't already) that the much-awaited Overseas shop opened its doors to the public last week. Behind the official name, is a Spanish chain that has 15 establishments throughout the country. Overseas, is a franchise belonging to a locally resident British couple that will be employing some 15 people. The opening ceremony last week was presided by the Mayor of San Roque, Juan Carlos Ruiz Boix, and the Councillor for the Guadiaro Valley, Juan Roca. Located on Avenida Sierra Bermeja, the main street in Pueblo Nuevo, it is aimed at catering to the 10,000 foreigners living in the area. The shop will be offering products from the Iceland and Waitrose stores available in Britain. We are told that they are looking for a large storage facility in the area.

Competition authorities to fine car dealers for price fixing

MADRID -- The National Commission for Markets and Competition (CNMC, Comisión Nacional de los Mercados y la Competencia) has recently advised car dealers (Audi, Seat, Volkswagen, Skoda, Nissan, Toyota, Land Rover, Hyundai and Opel, so far) that it intends to fine them for alleged anti-competition practices in the retail market. An investigation that began in June 2013 revealed that they had all agreed not to discount their vehicles for more than 4%, in what the report says was a 'sort of non-aggression pact' that is against competition legislation. The organization considers it proven that the manufacturers' distribution network took part in an organised system whereby concurrent prices were avoided within

Ferrovial is on a shopping spree, starting with the UK and Australia

MADRID -- One of Spain's largest companies, Ferrovial, is a big player on the international business scene, specialising in construction, operations and airport management. Having bought -- not without difficulties from the competition authorities -- the remaining shares in three important British airports (Glasgow, Aberdeen and Southampton, the 8th, 14th and 18th busiest in the UK, respectively) in a 50-50 partnership with the Macquarie Fund earlier this week, it put in a non-binding bid to acquire Transfield Services, an Australian firm. Transfield is in the operation and maintenance services businesses in a list of markets that range from natural resources, transport infrastructure and defence to many others. Ferrovial already had a participation in the three airports and still holds

Spain: worst drop in exports in five years

MADRID – Spain’s exports dropped 5.2% in August, the worst since October 2009. The reasons behind it are multiple, but the main cause is the problems the European economies, especially France and Germany, have undergone. Sales to emergent nations have also dropped, a contributing factor. While presenting these figures at a press conference last week, the Minister for the Economy, Luis de Guindos, pointed out that in real terms and having discounted the price of exports, the downward drift is only 1%. Nevertheless, the general trend of the Spanish economy is toward negative inflation. German exports fell by 1% in the same period, and the French, 5.7%; in both countries this is the sixth consecutive downturn. Exports from the UK were also down, which accumulated a 20% descent in eight consecutive months. Bad news, too, from outside the EU, where exports dropped by 7.1%, particularly in emergent Latin American nations such as Venezuela (-73.5%), Brazil (-22.3%) and Mexico (-16.5%). (Source: El Economista)

How could the new capital gains tax law affect you?

MADRID -- A new capital gains tax comes into effect on January 1, 2015. Not every property seller is impacted, though. According to Fuster & Associates, the government is eliminating two coefficients when calculating the tax due on a property sale. It does mean, however, that some vendors will see a large increase in the amount of capital gains they are liable for. There are three tax groups that will be exempted from paying, however:

Sperm: the new white gold?

MADRID – Spain has become a major exporter of human semen. It has to do with a number of things, not least of which are that it is not illegal in this country to donate sperm. This is why, for instance, Spain recently began exporting it to Portugal, where donations are not allowed, and nor are artificial insemination of lesbian couples or single mothers. People flock to Spain for artificial insemination, principally, from other less progressive European countries and from around the world. //The fact is, too, that the quality of sperm, in the developed world at least, has been decreasing over the years.  The reasons behind this are diverse: alcohol and drug abuse, smoking, fast foods in terms of nutrition, stress, fashion dictates in tight clothing, some sports such as cycling (which puts pressure on the testicles) and an increase in obesity in developed nations. There are more but these are the most common.

According to research carried out by the Department of Growth and Reproduction at the University of Copenhagen in Denmark, using scientific studies of those years, the average sperm count descended alarmingly between 1940 and 1990. From 113 million spermatozoa per millilitre to 66 million, almost half.

Another study, published in HumanReproduction magazine, confirms the downward spiral. Between 1989 and 2005, the sperm count per millilitre is now a mere 49 million. However, the World Health Organization (WHO) does not see this count as alarming, as the established minimum is 15 million, as it asserts in a manual they publish on the subject.

Single mothers and homosexual couples are 60% of the business

In the meantime, sperm banks have arisen like mushrooms. Ole Schou, who founded the world’s largest, Cryos, based in Denmark, agrees that tendencies and attitudes are changing rapidly. He adds that only 40% of his clientele is heterosexual couples; the rest are single mothers and homosexual couples. Cryos exports to 70 countries, which they can do in 24 hours. “Since our foundation in 1991, we have helped in the conception of some 30,000 babies, about 2,000 a year.” This, he says, is due to the company’s strict quality controls and in part to Danish law.

Having begun with university students as donors, and having expanded exponentially, Cryos exploits the international market with profits at the 80% mark. The number of donors is a “state secret” according to Schou. He is at present studying the possibility of opening offices in other countries, including Spain, in order to offer different kinds of donors – different specifications.

The law in this country forbids payment for donations but allows compensation ‘for the trouble’. Men in Spain can make an extra €1200 in six months, according to local sources. Many sperm banks, not just here, have an open clause in their donor contracts that says that at age 18, the children resulting from a donation, are allowed to contact the donor.

(Source: www.quo.es)

Former head of Spanish business confederation declared guilty of forcing bankruptcy

MADRID – The former president of the Spanish equivalent of the CBI, the CEOE (Confederación Española de Organizaciones Empresariales), Gerardo Díaz Ferrán was last week found guilty of forcing the bankruptcy of Viajes Crisol, a subsidiary of Viajes Marsans, travel agencies which he owned among many other businesses and properties. The sentence includes his preclusion from administering the assets of any person or company, as well as representing another person in any capacity. He, and the estate of his former business partner Gonzalo Pascual, must cover the deficit that created the bankruptcy as well as all court costs. He is at present serving a jail term on other business deals at the Soto del Real prison in Madrid. (Editor’s note: an article on the downfall of Gerardo Díaz Ferrán is in preparation. An extraordinary tale about greed.) (Original Source: 20 minutos)

Only one third of Ibex companies sets age limit on directors

MADRID – IBEX, the Spanish stock exchange, consists of 35 of the country’s biggest companies, including the likes of Telefónica, Abengoa, Banco Popular Español, Banco de Sabadell, Banco Santander, CaixaBank, Fomento de Construcciones y Contratas (FCC), Ferrovial, International Airlines Group (incl.. Iberia and BA), Iberdrola, Jazztel, MAPFRE and Repsol, among others, yet only 11 of them sripulate age limits on their directors in their statutes. This according to the annual report on Corporate Governance for 2013, prepared and presented by the Comisión Nacional del Mercado de Valores) the Stock Exchange’s governing body. The 11 entities that have regulations to this effect, set the average age limit of their boards at 70, and at which the maximum age they can sit on a board is 80.

Google Spain makes profits after three years of losses

MADRID – The Spanish branch of Google is finally in the black, after three years of red numbers. The USA company has set aside €1.75 million for corporate taxes, so net profits are €4mm. It’s not that the Spanish market is unprofitable – quite the contrary, as we report below – but their accounting practices, in common with other national branches by billing in Europe through Ireland, where the taxes are considerably lower than elsewhere on the continent. Those losses, then, were covered by the profits of other branches, so no great headache for one of the world’s largest businesses (and getting bigger). The practice is recognised as perfectly legal by the Spanish tax authorities, after an inspection Google re-billed its costs in 2013, giving itself a larger margin – something that was done in many other countries after widespread complaints that it wasn’t paying its way. So Google Spain is now in profit and paying something pretty modest in taxes.